Investment Returns

This month’s cover story examines what U.S. Concrete Inc. is doing to become the industry’s premier operating company. In our first visit with CEO Gene


This month’s cover story examines what U.S. Concrete Inc. is doing to become the industry’s premier operating company. In our first visit with CEO Gene Martineau since 1999, we see dividends of a business plan he is executing with a solid management team and 2,000-plus staff across the country. The plan netted a strong finish for 2005 and cause to inform investors of an even better year ahead. Wall Street has noted the financial performance and prospects, with the company’s stock price trending sharply upward since October and closing near record highs into early March.

Much as investors would expect, U.S. Concrete has captured administrative and operating efficiencies from an eight-region network of ready mixed and manufactured-concrete plants. It also has refined an integration process for bolt-on properties or new market platform companies that are likely to arise from an acquisition war chest now totaling $150 million in cash and credit.

U.S. Concrete seeks to raise sales and profits by raising the bar of its staff. The company has staked part of its future on the success of training and team-building programs themed Pricing Management and Optimization, Sales Activity Process, and Winning the Game. The first two programs challenge sales staff to make sure customers are fully informed of value-added product and service offerings, then target those contractors who are more interested in lowering their installed-product costs than their price per yard of concrete. Winning is aimed at keeping U.S. Concrete’s employees apprised of operating and financial performance across the company and within their divisions.

The goal is to have everyone think like an owner. That philosophy carries from Ready Mixed Concrete 2000, the early-1990s grassroots effort that challenged industry producers to secure a more profitable future through improved financial management, staff development, and customer service. One of the first products linked to RMC 2000 was the four-year Concrete Industry Management (CIM) degree program at Middle Tennessee State University, Murfreesboro. CIM began in September 1996 with a small enrollment, graduating its first student in 2000. Enrollment has climbed to 300, and MTSU anticipates conferring 80 CIM degrees this year.

Along with handful of suppliers and fellow producers, Gene Martineau has remained synonymous with RMC 2000 in its evolution from a grassroots idea to a template for perpetuating CIM and similar projects pivotal to the industry’s future. It is not surprising that during Martineau’s tenure as CIM National Steering Committee chairman, three offshoot programs have been announced. A second CIM-sponsored and funded program has begun at Arizona State University’s Del E. Webb School of Construction. California State University at Chico and New Jersey Institute of Technology have approved CIM offerings and are recruiting students and faculty to begin their programs this fall.

During a late-2005 meeting in Arizona, the Steering Committee determined that each new CIM startup program takes approximately $1 million over five years. MTSU began preparing for CIM expansion two years ago, landing a $600,000 National Science Foundation grant. Of the remaining funds needed for Arizona State, CalState-Chico and NJIT, half will be raised through the efforts of producers, suppliers and other prospective local patrons in each school’s state or area, and the other half through a Steering Committee campaign. Summing up the meeting, Martineau noted, We want to build upon our accomplishments to date by working together with every segment of the industry to expand our programs further. After all, we are investing in our future.

MTSU has graduated more than 150 students in the CIM’s 10-year history. Graduates have seen their investments in a concrete industry-specific education pay off with good employment prospects. In the same way public companies like U.S. Concrete gain investor confidence through revenue and earnings growth, recruiters at four universities across the country are set to boost enrollment by offering another degree program with proven return on investment.

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