Positive notes on a good year’s end

The industry entered 2014 with limited tailwind. Last year’s cement shipments and concrete output fell a few points from 2012, and prolonged, catastrophic winter weather hampered construction through the end of March. Before the snow melted, a) good market indicators supporting overdue plant and fleet investment were evident; b) one global and two domestic transactions surfaced, altering the top U.S. and Canadian concrete, cement and aggregate producer ranks; c) ready mixed and manufactured-concrete producers embraced new protocols for the LEED v4 era of green building; and, d) mobile device-suited information technology offerings surfaced, inviting the use of big data analytics to lower concrete production and delivery costs.

Revisiting a few of the 2014 highlights and developments whose likely effects will be felt well into the new year:

Mixer truck sales rebound. For the first time in at least five years, manufacturers reported steadily increasing sales, production ramp ups and meaningful backlogs. While independent producers were best positioned to invest in mixers since 2008, this year has seen major operators adding trucks and rebuilding dwindled fleets.

LafargeHolcim. Although securities laws apparently constrain guidance they can offer this side of the Atlantic, the proposed merger of Lafarge Group and Holcim Ltd. outlined in January appears to be on track for closing the first half of 2015. A completed deal would have limited impact in the U.S. Reports in the financial press, however, spell a new suitor for Holcim Canada operations—among assets pegged for disposal as the companies seek to appease regulators.

Argos USA. As noted here in February, Columbia’s Cementos Argos was little known in the U.S. through 2004, the year it gained a foothold by acquiring the Carolinas’ Ready Mixed Concrete Co. Since then, it completed major investments in Texas (Southern Star) and the Southeast (Lafarge NA) concrete and cement markets, leading into this year’s acquisition of ready mixed, block and cement operations Vulcan Materials inherited from Florida Rock Industries. Argos USA closes out 2014 with a major Sunshine State position and as the third largest U.S. ready mixed producer, behind Cemex and Oldcastle Materials.

Texas and Martin Marietta. Lone Star State construction and concrete demand remain the envy of many. Martin Marietta Materials confirmed the market strength in an earnings report for the third quarter—the first financial period reflecting Texas Industries Inc. figures. “This transformational acquisition, when combined with our solid heritage business, creates a strong and broad foundation for dynamic revenue and profit growth in 2015 and beyond,” said Martin Marietta CEO Ward Nye. In addition to returns from TXI’s major ready mixed market stake, he confirmed that the Texas cement business—in which Martin Marietta is now a key player—is “sold-out” with a demand/supply imbalance appearing likely for the next several years.

PCR and EPD. Cement, ready mixed, masonry and precast stakeholders have gained significant Product Category Rule and Environmental Product Declaration ground. New documents equip downstream customers for more rigorous green building goals or certification methods. Portland Cement Association, National Ready Mixed Concrete Association and EPD specialists closed out 2014 with bold measures (note pages 14, 19 this month).

Mobile applications. Information technology leader Command Alkon has firmly committed to extending COMMANDseries capabilities and options to tablets and smartphones—leveraging especially the added bandwidth from FiveCubits (August 2014) and 323 Technology Solutions (May 2013) acquisitions. On the heels of test deployments and limited releases in 2014 (note pages 18-19 this month), Command Alkon and other IT providers will roll out applications next year changing how producers manage plant assets, production, sales, customer relationships and human capital. Competitive pressures, coupled with improving market conditions supporting technology investment, will make mobile device applications a sure bet for the new year.