The incoming chairman of the National Concrete Masonry Association (NCMA) brings boundless optimism and market knowledge sure to spur growth for NCMA member firms. Sylvester Schmidt, director of technical services at RMC USA, Inc., is boldly outspoken about the opportunities for concrete masonry and other products as U.S. markets and sales environments change. “Continuing the efforts of past chairmen,” Schmidt affirms, “my main focus will be to find ways to support our industry members in expanding our markets in 2005.”

This is the right time to carry out an aggressive campaign to boost concrete masonry unit sales, Schmidt contends. “I see positive trends in our most important market segments in 2005 and beyond.”

An NCMA member since 1985, Schmidt is RMC USA's representative to the association and has served as a board representative from NCMA Region II, which includes eight southern states and Puerto Rico. In the capacity of NCMA Executive Committee member, Schmidt also spearheaded structural changes resulting in a reduced number of committees and streamlined committee activities. He will take office this month during the NCMA annual meeting immediately preceding the 2005 Manufactured Concrete Products Exposition (MCPX) in Indianapolis.

MARKETS TRENDING UPWARD

Growth opportunities exist because construction markets are trending upward. “Value of office construction began rising in 2004, public construction in 2003, commercial since 2003,” Schmidt reports, adding that only single- and multi-family residential construction has cooled recently — and that from a blistering record pace. He attributes cooling residential construction to higher interest rates.

Meanwhile, nonresidential construction begins its revival as the economy gains traction, and small declines in the residential sector are offset by incremental gains in nonresidential and public building activity. “Unlike past years, nonresidential will become a growth leader, and residential will become a small drag on overall construction,” Schmidt predicts. Yet, he sees a major growth opportunity in residential, if masonry and block boost their market share among existing materials.

The current use of materials appears to be largely a matter of habit, Schmidt observes, and since habits can be changed, expanding the masonry and block market is feasible. He notes, for example, that of material used for residential crawl spaces, concrete block has a 75 percent share in Georgia and a 79 percent share in the Carolinas. By contrast, concrete block's share of the basement wall market in Georgia is 13 percent, compared to 39 percent in the Carolinas, where the Carolina Concrete Masonry Association has worked aggressively to boost product awareness. The question arises: If block is favored for crawlspaces, why can't it be used for basement walls, which are adjacent and likely constructed at the same time?

BREAKING THE WOOD HABIT

Similarly, over-reliance on wood for aboveground residential construction in the U.S. reflects mere convention and habit, Schmidt says. “I am an American citizen, but I come from a country where masonry is far more prevalent in home construction,” he tells Concrete Products. “When the first settlers came to America, wood was abundant, and brick was used predominantly as the nonload-bearing material. Culturally, we have been accustomed to the use of wood.”

That wood represents an unacceptable fire hazard can be exploited by concrete masonry producers, Schmidt asserts. “In middle school, my son heard a talk by ‘Fireman Phil,’ who warned students that they had only two minutes to get out of a burning house, because once a fire is detected, the oxygen is rapidly depleted,” he continues. “This is unacceptable. The February 2002 FEMA report said about 4,000 lives are lost to fire each year, and this loss is largely due to use of combustible building materials. Think about it: We lost far more lives to combustible building materials in 2001 than we did in the attacks of Sept. 11.”

Schmidt points out that 140 apartment fires occurred in 2002 in the Atlanta metro area alone. “We don't want to use the ‘fear factor’ to promote our product,” he says, “but the block industry is providing a public service if it can influence building codes to benefit public safety.”

Plenty of room to grow is evident in this sector. According to Schmidt, masonry accounts for only 1 percent of abovegrade residential wall material in Georgia and only 4 percent in the Carolinas.

Landscaping remains a mainstay for concrete masonry, but the market share was built by promotion and development of suitable product, he emphasizes. “Landscape is the most dynamic segment of the industry and can be a catalyst for change in our industry” Schmidt says. “In my opinion, landscaping product shows what we can do when we create excitement and interest in our product. If we can do for concrete block what we did with landscape products, we will be very successful.”

JOINING WITH HOME BUILDERS

NCMA took a big step in this direction in 2004 as it joined the Concrete Home Building Council of the National Association of Home Builders. “This will be an excellent tool for reaching 220,000 NAHB member companies and builders,” Schmidt tells Concrete Products. “We'll produce feature articles and case studies that will appear in NAHB publications. Residential will be an important segment for the use of concrete masonry, if we use a long-term approach. Our ultimate target is the home owner, who needs to recognize the value of living in a concrete masonry home.”

Fire is not the only issue for NCMA members to raise when pursuing residential and commercial building markets. Additional themes include:

• Termite/pest resistance — More than 2 million homes annually require termite treatment, Schmidt notes, exacting more than $2 billion in home damage and repair costs. “Most insurance companies do not cover termite damage,” he adds.

• Storm resistance — Hurricanes Hugo (South Carolina, 1989) and Andrew (Florida, 1992) have led to changes in building codes in the Southeast that incorporate concrete block. In 1993, a new standard for Hurricane-resistant Residential Construction was adopted for Florida and Southeast coastal areas.

  In the Midwest, tornadoes are problematic. If a structure is not entirely built of block, a safe room can be installed; for example, the master bedroom and bath can be constructed of block within the home. “Specifications for safe rooms published by NCMA call for resistance to 170 mph winds using reinforced masonry with grouted cells,” Schmidt relates. “The whole house can fly away and the safe room will remain.” But, an $8,000 safe room is a hard sell for certain buyers who instead are looking to spend that money on better kitchen cabinets and countertops, he observes.

• Indoor air quality — NCMA has been very active in the movement against mold as indoor air quality issues have gained momentum, and now the profusion of advertising for indoor air quality conditioners is giving the issue added “legs.” Schmidt reiterates a standing NCMA theme, especially in recent years: “Concrete masonry does not provide a ready source of food for mold growth.” He adds that fighting indoor mold and mildew depends on adequate HVAC design as well as the use of inert materials like masonry.

• Sound insulation and thermal energy efficiency — Concrete masonry's thermal value cuts down on energy costs, he contends, and its mass provides sound insulation, keeping homes and schools quiet.

• Long term durability, low maintenance cost, and higher resale value — with the potential of lower insurance costs. “Longer durability means the resale value will be higher, another benefit,” Schmidt says.

LOCAL INITIATIVES

Schmidt emphasizes that NCMA can't do it all for the local producers of concrete masonry. Executing local promotional programs, using the concepts NCMA offers, will be the responsibility of association members.

“We can deliver the technical information,” he affirms. “But NCMA can only initiate the promotion. Local activities have to be implemented by the producer members and state masonry associations. That's so important to realizing our goal of wider markets.”

In 2005, Schmidt urges producers to pursue several activities key to increasing local market share:

• Sell concrete masonry on the basis of its excellent long-term value, not merely on the price per gray unit
• Focus on the right market segments
• Work with engineers, designers and architects on specifications before projects are out for bid
• Work with masonry contractors on design-build opportunities
• Support promotional activities by the state or local CM association
• Support NCMA and use its services.

PARTNERING WITH ASSOCIATIONS

Every year NCMA joins the National Precast Concrete Association (NPCA), the Interlocking Concrete Pavement Institute (ICPI), and the American Concrete Pipe Association (ACPA) to produce the Manufactured Concrete Products Exposition. MCPX 2005 takes place Feb. 9-13, in Indianapolis.

NCMA will continue that participation in future years, a three-year trial period having worked successfully. “The joint effort is working really, really well,” Schmidt reports. “Each organization retains its identity. Each one has a good story to tell about its products, though all the different products may be used in the same project.”

Other associations with which NCMA will work closely in 2005, Schmidt notes, include the National Ready Mixed Concrete Association (NRMCA), the Portland Cement Association (PCA), and the Brick Institute of America (BIA). “We are in the same boat and have an excellent story to tell,” Schmidt asserts. “Allied associations will help us carry our story to the marketplace. My predecessors sought out alliances, and this is a goal for us to continue and reinforce this year.”

NATIONAL CONCRETE MASONRY ASSOCIATION
At-A-Glance

Since 1918, the National Concrete Masonry Association (NCMA) has represented the U.S. concrete masonry industry. From its central location near Dulles Airport outside the District of Columbia, NCMA supports producers of concrete masonry products and allied suppliers of products and services, with promotion, technical, research, lobbying and communications.

NCMA service efforts include residential, landscape, and commercial product groups. It also provides educational programming. NCMA staff and volunteers are particularly active in ASTM standards committees and code writing bodies. Its world-famous research and development laboratory is a leader in product testing and validation. NCMA's extensive technical services include research and design aids, distributed through publications, computer programs, slide presentations and technical training.

The NCMA Education and Research Foundation serves the concrete masonry industry as a research and education affiliate. Its mission is to advance and support the concrete masonry industry and the public interest through research and education programs designed to meet future needs.

Mark B. Hogan, P.E., is NCMA president. Association headquarters are located at 13750 Sunrise Valley Drive, Herndon, Va. 20171, tel.: 703/713-1900; fax: 703/713-1910; e-mail: ncma@ncma.org; web site: www.ncma.org.

CHAIRMAN 2005

SYLVESTER SCHMIDT
Director of Technical Services
RMC USA, Inc.
Atlanta, Georgia

IMMEDIATE PAST CHAIRMAN

SCOTT WEBER
President
Basalite Concrete Products LLC
Dixon, California

INCOMING CHAIRMAN (2006)

JIM WEBER
Bend Industries
West Bend, Wisconsin

RMC USA, INC.
At-A-Glance

RMC USA, Inc. — until just recently, RMC Industries — is a multifaceted operator whose subsidiaries produce and sell concrete products, ready-mixed, asphalt and construction aggregates. In January 2005, RMC USA parent RMC Group faced friendly acquisition by Cemex S.A. de C.V. of Monterrey, Mexico, in a US $5.8 billion transaction, including assumption of debt. Awaiting approval by U.S. regulators, Cemex anticipates consummation of the deal this month.

The combined company would be one of the world's largest building materials sources, with pro forma revenues of more than $15 billion. Says Cemex Chairman and CEO Lorenzo Zambrano, “RMC's strong positions in cement, aggregates and concrete will add to our existing operations in these areas and, combined with our global presence in cement products, enhance our leading position in the global building materials market.”

The long-time parent company of RMC USA, RMC Group Plc, began as Ready Mixed Concrete Ltd. in 1930 with the opening in Bedfont, Middlesex of the United Kingdom's first ready mixed plant. The company expanded rapidly, particularly during the heightened growth period of the 1950s and 1960s. In 1982, the name was changed to RMC Group.

In the U.S., RMC Industries Corp. was incorporated in 1979, acquiring Piedmont Concrete in Winston-Salem, N.C., and Ewell Industries in Lakeland, Fla. Through its 15 subsidiaries, the company is a major domestic supplier of block, ready mixed and other building materials.

In 1981, RMC purchased Pinellas Industries, producers of ready mixed and concrete block and pipe in Florida, as well as Krehling Industries on the Gulf Coast. Later in the 1980s, RMC bought a controlling stake in Metromont Materials in the Carolinas and acquired Allied Readymix in Georgia. Later acquisitions included Carolina Quality Block of Greensboro, N.C., and Sikes Readymix in the Florida Panhandle.

Growth in the 1990s was fueled by the acquisition of Singletary Concrete Products in Bradenton, Fla.; the Florida west coast plants of Tarmac; a cement plant in Santa Cruz, Calif.; Chandler Readymix in the Phoenix area; a majority interest in Triad Masonry Products in Greensboro, N.C.; Nor-Cal Readymix in California; Tucson Rock and Sand through a subsidiary company, Tucson Readymix, Inc.; Jobe Concrete Products, Inc. in El Paso, Texas; four Nevada companies based in and around Reno; aggregate providers Youngquist Aggregates and Florida Rock & Sand, both of Florida; Patterson Sand and Gravel and Sierra Readymix, Inc., near Sacramento; and in 1999, “bolt-on” additions to existing companies in the Carolinas, including Commercial Products Inc. in North Carolina.

RMC is a major producer of aggregates in the southwest, Missouri and Florida. It claims world leadership in ready mixed production. RMC supplies block throughout residential and nonresidential sectors, making it one of the largest concrete masonry producers in the U.S.

In addition to conventional gray block and value-added products including ground-face Designer Stone units, RMC companies manufacture standard concrete pipe and related precast components, available in all sizes and lengths. Other precast products include culverts, bridges, drainage basins, barriers, and parking curbs.

Delbert H. Tanner is president of RMC USA, Inc. Company headquarters are located at 1 Glenlake Parkway, Suite 600, Atlanta, Ga. 30328. The RMC web site is located at www.rmcindustries.com