June 1, 2009
by Therese Dunphy, Editor-in-Chief
We’re currently at the outset of the busiest time of the year for most aggregates producers. However, this year, indications are that many production facilities will operate at around 60 to 70 percent capacity. That means that this year’s busy season may be on par with a normal spring warm-up or fall cool down.
Regardless of the size of the operation – or company – many aggregates businesses are feeling the impact of reduced production and taking steps to offset it. The nation’s largest aggregates producer, Vulcan Materials Co., reported a $32.8-million first-quarter 2009 loss, despite an overall 2-percent price increase. At the heart of the downturn? Lower demand. “The sharp decline in demand for construction materials is unprecedented,” Vulcan Chairman and CEO Don James told the Birmingham Business Journal, noting, “We remain highly focused on cash generation and improving our liquidity during this period of weak demand for our products.”
But it’s not just the nation’s top producers who feel the economic impact. Regional companies, such as Rochester, N.Y.-based Dolomite Group Inc., are also looking for ways to lower their cost structures. “Every company has to look as quickly as possible at ways to regulate production costs,” Pat DiLucia, vice president of the Dolomite Group, told the Rochester Business Journal. “Our biggest impact is the day-to-day operating cost.”
As producers around the nation deal with similar challenges, there are a number of steps that can be taken.
As aggregate producers react nimbly to changing market conditions, they can not only mitigate some of the impacts of current market conditions, but also position themselves to thrive as the economy improves.