The ready mixed concrete industry is grappling with an abrupt downturn in market demand, and that slump will affect how members of the National Ready
TOM KUENNEN
The ready mixed concrete industry is grappling with an abrupt downturn in market demand, and that slump will affect how members of the National Ready Mixed Concrete Association conduct business, says its incoming chairman. We’re in a severe downward trend in demand for products in most of our members’ markets, particularly as a result of the housing situation, and we’ve probably not yet bottomed out in most areas, contends 2008 NRMCA Chairman Frank Craddock, who is executive vice president-Commercial of Cemex USA.
We still haven’t seen the worst of the foreclosures, the subprime failures, and mortgage companies writing off failed mortgages. When you couple that with other drags on the economy, i.e., rising oil prices producing an inflationary ripple throughout the economy, there is a lot of bad news.
On the good side, however, the Federal Reserve Bank has begun aggressively cutting rates, and capital is being infused into the system, Craddock notes. Foreign investment has added liquidity to our banking system, and oil has begun to drop. It’s thought that will continue, he tells Concrete Products. So, we might avoid a recession, but I’m still not optimistic regarding the 2008-2009 season for producers in many parts of the country. Our members are going through a tough time.
The impact of the mortgage crisis varies widely across the country, and that will mitigate some of the downturn, Craddock observes. Areas of the country where housing is not suffering too badly did not have the dramatic run-up in prices that some areas experienced, he asserts. In markets like Florida and California, where we truly experienced a bubble, we are undergoing a cyclical adjustment, as well as an adjustment to overexuberance in the overheated housing market there. We’re now seeing the pendulum go the other way, and we’ll just have to work our way through it.
Also, during the last recession, housing did not go down; rather, it grew. That was one of the strengths of the economy during the last recession, Craddock reports. Certainly, if you correlate it to gross domestic product and the overall economy, housing skipped a cycle. A lot of factors have added to the severity of the mortgage crisis.
Yet, such conditions don’t necessarily portend lean times for NRMCA. The good news is that a lot of us rallied around past visionary leadership in NRMCA, and we created a reserve to help balance out the cyclical nature of our industry, Craddock emphasizes. Between that and other income we’ve created, NRMCA should be able to continue our investment in growing and protecting our businesses, while providing expanded education for the industry, without raising our dues.
Dues are being spent well, and we are being as frugal as possible in a time when it’s tough on our members and their businesses. The good news is that we are able to keep investing in programs that are giving us a return. Even during a challenging time, the association should be able to thrive and improve as we move forward. While things are tough, NRMCA’s in good shape.
Among visionary leaders, Craddock singles out his predecessor, Elizabeth Boo Twohy, president of Norfolk, Va.-based Capital Concrete, Inc. She listened well. She represented the entire organization and really set a great example for how the job should be done, he affirms. It’s important that leadership listen to everybody throughout NRMCA, and I intend to do staff-selected member visits throughout 2008 with the goals of ensuring that membership needs are met and that producers are aware of and utilizing the great membership benefits available for their business.
NRMCA ADVOCACY
Major challenges in national policy face NRMCA in 2008, and the association is doing its best to navigate such issues in the interests of its members and the nation at large, says Craddock. We’re not completely home on the Power Take-Off [PTO] tax rebate, he concedes. We’ve made great progress, but it hasn’t taken all the steps it needs to. Still, we’re hoping for a resolution this year. The collective impact of the PTO rebate Û intended to reimburse plant operators for taxes paid on diesel fuel used to power equipment (as opposed to driving on roadways) Û is some $21 million annually, nearly $300 per truck.
Protecting workers’ rights is another priority for Craddock and NRMCA. There has been a major effort in Congress to attach legislation permitting labor unions to allow voting that is not confidential, he tells Concrete Products. Workers ought to be able to make their own decisions without coercion by the company or the union. Their right to voting secrecy should be protected.
Additionally, an enormous policy issue for the nation and the construction industry is sustainable development, and NRMCA is in the thick of it. Although cement production is not a chief source of carbon dioxide emissions, we are put in the same category as major emitters, such as power generation, says Craddock. This has the potential to give concrete a black eye. However, I am encouraged by statements, such as that recently articulated by Portland Cement Association President and CEO Brian McCarthy, who noted that while we may not be perfect, we are still the best choice when it comes to sustainable building materials. Whenever you speak of sustainable building materials, concrete is there.
ENHANCING ENVIRONMENT
NRMCA is determined to support the ongoing positioning of concrete as an environmentally sustainable building material. In this endeavor, the association is joined by many other organizations and stakeholders in the cement and concrete industry. Sustainability is a new way of looking at things, Craddock affirms. While it has created challenges in the financial and strategic sides of our businesses, it also provides huge opportunities within the concrete industry.
In support of NRMCA’s environmental initiative, David Ayers was hired in late-2007 as managing director of compliance. Ayers’ placement reinforces the association’s emphasis on improving the ready mixed industry’s performance and compliance with local, state and federal environmental and safety regulations.
In early 2008, NRMCA introduced its Green-Star environmental management system recognition program. Providing ready mixed producers with an industry-specific program, Green-Star targets elements unique to ready mixed suppliers, while filling the gap between industry efforts and other Environmental Management Systems-based certification programs, such as U.S. EPA Performance Track and ISO 14001.
While not established to take the place of such programs, Green-Star can serve as an effective alternative due to its enhanced accessibility to the concrete industry. The certification program is open to NRMCA members as well as nonmembers. Potential Green-Star benefits include customer-favored status; increased profits through pollution prevention and waste reduction; improved efficiency through sound, consistent environmental management methods; enhanced community goodwill; and, liability and risk reduction.
NRMCA is promoting Green-Star in 2008 via an expanded program of web-based live seminars, increasing its ÎwebinarsÌ both in number and topics offered. In the same format, throughout 2007, the association offered parking lot promotion, the environmental benefits of ready mixed concrete, an introduction to NRMCA’s education and training certification courses, and understanding antitrust laws. Expanded offerings in 2008 will include operations, environmental and safety issues.
Typical of NRMCA’s web-based seminars, one program targeted emergency planning and the Community Right-to-Know Act. Presented by Ayers, the webinar informed participants of annual reporting requirements for facilities that produce, consume, or store more than 10,000 pounds of a substance at any time during the year.
Another offering slated for 2008 is titled Wal-Mart Sustainable Development. The webinar will feature an examination by NRMCA Senior National Resource Director Vance Pool of the retailer’s leadership position in deploying sustainable technologies in many of its stores.
We are providing both online and personal educational opportunities for our members to help them understand the value and opportunity that surrounds these issues, Craddock notes. We also are extending our sustainability outreach via promotions, where our national accounts program representatives are going to the major builders Û such as Wal-Mart Û and stimulating interest in the sustainable attributes of concrete.
In addition, by way of advocacy, we address building codes, safety and liability issues. Education, advocacy and promotion all tie together. We have to do all three, and each is a leg of the same stool. And, it’s not just educating our members; we have to educate our other stakeholders as well.
NRMCA’s environmental agenda also includes the third annual Concrete Technology Forum: Focus on Sustainable Development, scheduled for May 20-22 in Denver. The symposium and associated product expo will bring together researchers and practitioners to discuss latest advances, technical knowledge, continuing research, tools and solutions promoting sustainability in concrete construction. Among hot button issues highlighted at the event will be pervious concrete systems, the urban heat island effect, concrete’s carbon footprint, sustainable development initiatives, and optimizing content of reclaimed or recycled materials.
PERVIOUS PARKING PAVEMENTS
Pervious concrete’s significant contribution to a sustainability thrust has prompted NRMCA and the Portland Cement Association to team again with Sustainable Land Development International to offer the Pervious Concrete: A Stormwater Solution seminar in eight cities during 2008. Presented in 19 cities over the last 18 months, the program provides detailed instruction on installing pervious concrete pavements as a solution to reduce stormwater runoff from building sites and other paved areas. Types of systems, engineering properties and construction techniques are discussed. Thus, pervious concrete is showcased as a performance-engineered concrete whose 15 to 30 percent void system allows surface water to percolate through it, thereby minimizing runoff to surrounding streams and lakes and allowing for natural filtration to recharge local groundwater supplies.
Promotion of pervious pavement leverages concrete’s green attributes to further increase parking lot market share Û a longtime NRMCA goal. In May 2007, following years of marketing, the association instigated a Concrete Industry Parking Lot Promotion Plan that garnered strong support from regional, state and local promotion groups, as well as ready mixed producers and suppliers across North America. According to NRMCA officials, 13 state associations developed or planned to implement strategic plans tailored to their specific markets by the end of 2007, with dozens of additional state and local promotion groups lending support. The national goal calls for parking lot market share to increase to 15.1 percent in 2010 from 2005’s 9.1 percent.
New services and support tools available from NRMCA to assist local promotion groups include a parking lot design-assistance program for specifiers and a presentational flip-chart booklet describing concrete parking lot benefits. Additionally, a lead-referral program for local construction projects, known as Buildings Under Design (BUD), comprises a web-based service that enables promoters to obtain information on local projects. NRMCA has supported 50 promotion groups in gaining access to this service, thereby permitting early identification of project decision makers to more effectively encourage pro-concrete choices. Besides concrete parking lot opportunities, BUD targets such applications as site cast, both ICF and conventional, pervious concrete and flowable fill.
NRMCA’s Parking Lot Design Assistance Program (DAP) aims to help specifiers overcome the inertia of familiarity with asphalt parking lot design. In early 2008, for DAP’s pilot phase, state associations are invited to submit projects on behalf of specifiers for detailed design recommendations. All costs incurred are covered by NRMCA, including the creation of CAD drawings provided to the specifiers. The DAP program, conducted in collaboration with NRMCA state-affiliate Ohio Ready Mixed Concrete Association, has completed five projects, and others are underway. Of that number, both projects that have been awarded to date have gone concrete.
SELF CONSOLIDATING CONCRETE TECHNOLOGY
Another hot button issue for NRMCA is self-consolidating concrete (SCC). We think SCC is very exciting, Frank Craddock tells Concrete Products. As with any of the themes we support, we don’t tell our members what to do in every single instance, he emphasizes. But in many instances, SCC creates the most value and meets unmet needs of our members and their customers. In a mature economy like the United States, productivity is a huge factor. Anything that can enhance productivity will bring great value to any construction job and the owner. SCC can be placed in a much more productive manner Û and that alone, we think, brings great value in areas where it can be used.
CEMEX, INC.
AT-A-GLANCE
Cemex, Inc., the U.S. operating arm of global Cemex S.A.B. de C.V., is the largest supplier of cement and ready mixed nationwide, as well as an important producer of aggregates, concrete block, and other building materials. In the U.S., Cemex has a balanced and vertically integrated business portfolio, strategically positioned in high-growth regions of the country.
Cemex owns and operates 14 U.S. cement facilities wielding a total production capacity of 14.7 million metric tons per year. Additionally, it holds a minority stake in four other cement plants and owns 350 ready mixed operations, and 140-plus aggregate plants.
To meet strong regional cement demand, Cemex is constructing a second kiln at its Balcones plant in New Braunfels, Texas. Expected to go online in 2008, the new kiln is designed to increase the facility’s total production capacity to approximately 2.4 million short tons per year. Though cement production will double, however, the operation’s emissions will not increase, as existing equipment will be replaced with state-of-the-art technology to protect the environment and maintain current emissions levels.
In an effort to better care for the air, water and land, company officials note, Cemex is committed to exploring the use of alternative raw materials and fuels, as well as recycling and reusing waste materials. Accordingly, petroleum coke or tire-derived fuel has been substituted for coal. By retrofitting cement plants to handle alternative fuels, the producer has improved its operating flexibility and reduced vulnerability to potential energy price spikes.
NATIONAL READY MIXED CONCRETE ASSOCIATION
At-A-Glance
CHAIRMAN
2008
FRANK CRADDOCK
Executive Vice President, Commercial
Cemex USA
Houston, Texas
IMMEDIATE PAST CHAIRMAN (2007)
ELIZABETH ÎBOOÌ TWOHY
President
Capital Concrete, Inc.
Norfolk, Virginia
CHAIRMAN-ELECT (2009)
HENRY BATTEN
Executive Vice President and Chief Financial Officer Concrete Supply Co. Charlotte North Carolina Founded in 1930, the National Ready Mixed Concrete Association marks its 78th anniversary in 2008. Silver Spring, Md.-based NRMCA represents ready mixed producers and companies that supply materials, equipment and support services to the industry. It conducts education, training, promotion, research, engineering, safety, environmental, technological, lobbying and regulatory programs, while serving as the leading industry advocate.
To ensure ready mixed is the building material of choice, NRMCA supports continued industry expansion and advancement through leadership, advocacy, and professional development initiatives. Additionally, the association enters partnerships with state groups to pursue efforts related to promotion and regulatory concerns, thereby extending the reach of state groups to a national level.
NRMCA’s committees include Government Affairs, Operations, Environment and Safety, Education, Membership, Promotion, Business Administration, Research, Engineering and Standards, Information Technology, Vision Strategic Planning, Audit and Finance, and Construction Industry Alliances. These bodies organize and implement a host of conferences and education courses throughout the year.
Moreover, NRMCA is a principal sponsor of the ConExpo-Con/Agg exposition, staged every three years at the Las Vegas Convention Center.
Robert Garbini, P.E., is NRMCA president. Inquiries or requests can be directed to the association through its web site, www.nrmca.org; via mail addressed to NRMCA, 900 Spring St., Silver Spring, MD 20910; or, by phone: 301/587-1400, (toll free) 888/84NRMCA; fax: 301/585-4219; or, e-mail: [email protected].