As the President of CRH Americas Materials Takes Over as Chairman of the National Stone, Sand and Gravel Association, He Talks About Association Initiatives, Infrastructure Funding and Young Leaders.
By Mark S. Kuhar
As you begin your term as chairman of the National Stone, Sand and Gravel Association (NSSGA), what is the number one thing you would like to accomplish?
I believe focusing on the legislative and regulatory environment and ensuring an all-inclusive approach to membership are fundamentally important for NSSGA to be effective – but advocacy remains job number one.
Further establishing NSSGA as the advocacy leader in the construction materials sector is critically important. We all have a role to play in making this happen, from local producers, to regional and the big players. By continuously engaging with elected officials and effectively advocating for the issues important to our members, we can ensure that the issues facing our industry remain at the top of their agenda.
What are your plans to build on the work of your predecessor and continue to execute the Rocks Build America 2020 strategic plan?
It’s been four years since the launch of the Rocks Build America 2020 strategic plan and great progress has been made to date. We started by growing the scope and influence of the association to better serve the entire aggregates industry, strengthening our voice at a legislative level and aligning our board structure with the goal to have representation in every state.
Last year, this year and to 2020 we will continue to focus on becoming the advocacy leader in the construction materials sector. The job ahead is to deliver a return for those members who invested their time and talent in our association, because we firmly believe our collective voice is stronger than any one of ours alone.
The current administration has gotten off to a slow start in launching its infrastructure initiative. How can the industry push the process along?
There have been some very positive steps taken by the administration so far, especially around streamlining regulations. Early on President Trump signed an Executive Order that required agencies to delete two regulations for every new one. The most significant impact the administration has taken in this regard has been around regulatory reform, and the process to repeal and replace the onerous 2015 Waters of the U.S. rule.
Another area where the administration is having a notable impact is with our primary regulator, the Mine Safety & Health Administration (MSHA). The arduous paperwork process required for hazards and inspections under and the workplace exams rule diverts important attention and resources away from actively managing safety, while yielding modest improvements to working conditions. The rule is highly costly to our operations and NSSGA estimates it comes with an annual price tag of $25 million to small operators. The new proposal would reduce the number of items that need to be noted and make this only necessary when a hazard is not promptly abated.
Making an infrastructure package a reality is absolutely critical, and the sooner Congress acts the faster we can get to work as an industry. After much anticipation in 2017, earlier this year the President called for both parties to come together and for Congress to produce a bill that generates at least $1.5 trillion in infrastructure investment. To be effective it would need to include long-term, robust revenue for the federal Highway Trust Fund and streamline the permitting and approval process to no more than two years. This would have a significant, positive impact on the permitting process for expanding and establishing aggregate operations. Engaging in the infrastructure debate will require NSSGA’s continued focus to ensure the future strength of our industry. Needless to say this will continue to be one to watch and be a carefully considered focus of our advocacy efforts.
What should aggregates producers do to prepare for an expanding future market and increased production?
The industry outlook for the year ahead is positive and continued growth is expected. Looking back over the last couple of years, 2016 was a tough year to beat and our industry experienced growth we had not seen in over a decade (since 2005). Last year saw slight decreases to demand and production, largely due to weather and a tough hurricane season with production volumes returning to 2015 levels.
In terms of preparing for the future, we must maintain a focus on safety across our operations. While it has never been a safer time to work in the aggregates industry and we have improved our safety record for 17 years straight, we need to strive for zero incidents every single day and redouble our efforts in the years and decades to come to be successful in a growing market with increased production.
How can our industry tackle its labor shortage?
Great careers can be built for people working in this industry and we offer a safe, inclusive work environment with opportunities for advancement that make an impact on our country’s infrastructure. The aggregates industry is an economic multiplier and each quarry job creates about five additional jobs throughout the economy. Demand for our products has gone up, however the talent pipeline has not proportionately increased, while our current workforce continues to mature – so there’s lots of opportunity. The average annual salary for a quarry job is $75,129, yet labor shortages and the ability to hire and retain key employees is a real challenge across our industry. It’s no secret we are in a low unemployment market, so we all have a shared responsibility to spread the word. To view dozens of aggregates industry jobs from across the country, please visit jobs.NSSGA.org. New opportunities are posted daily, so be sure to submit job openings from your organization at jobs.nssga.org/post/edit.
Why is national association membership important to business success?
NSSGA speaks for the entire industry, from the local small producer segment, to regional and national producers. The “why” behind NSSGA membership comes down to being able to leverage our advocacy leadership position to maximize impact for all members. We can amplify our message and bring our issues to the forefront more quickly and effectively with a unified voice as a strong collective, than as individual companies. Advocacy remains job number one and we need to continue to recruit targeted producers to strengthen NSSGA’s grassroots advocacy efforts.
Talk about the importance of the Young Leaders group to NSSGA. Why is this group critical to future growth?
I recently had the opportunity to speak with this group at the 2018 Young Leaders Annual Meeting about their shared sense of purpose and optimism for our industry. The building materials industry, specifically the aggregate industry, offers young leaders the potential to build an experience-based career, enhanced by deep relationships and the ability to impact the communities in which they live. It’s an incredibly vibrant group and the future of our industry rests in the hands of these young men and women who want to make an impact, early on in their careers.
This year’s AGG1 show was very successful. How can you build on it for next year in Indianapolis?
We are going to host the largest AGG1 Academy & Expo ever in Indianapolis next year, which is incredible to say given that the largest AGG1 was just held in Houston. The show is growing in popularity each year because it’s all aggregates, all in one place. At the close of the AGG1 and World of Asphalt shows there were more than 8,300 people in attendance, with representative coming from all 50 states, 10 Canadian provinces and 50 countries worldwide. It promises to be another great event next year. We will also continue to focus on educational opportunities, as the AGG1 Academy courses continue to grow in popularity.
What role can NSSGA play to help aggregates producers take a quantum leap in using new equipment, the latest technology and actionable data?
Technology is transforming our industry. From GPS enabled drilling, to 3D imaging and drone mapping, operations and process are becoming more efficient and highly automated. Our association provides a number of tools and resources that connect manufacturers and service providers with producers. While the next AGG1 Academy & Expo is not until February 2019, the AGG1 online webinar series is a great resource. It brings the best of the AGG1 Academy as well as brand-new sessions directly to you on demand. These one-hour webinars focus on a different aspect of the aggregates industry, from mine planning and processing to business management and regulatory compliance.
If you could tell the nation’s aggregate producers one thing, what would it be?
We value your membership and we need you to be involved. NSSGA represents the aggregates industry and the more the association grows, the more effective it becomes for the entire industry. The potential of our collective efforts and our shared vision is far greater than the sum of our parts.
What is the best piece of business advice you ever received?
Write down where you want to go, both individually and as a business. The action of writing something down and committing your vision to paper forces you to slow down and be very thoughtful about laying out your career development and direction as a business. Similar to the continued efforts behind the Rocks Build America 2020 strategic plan, at CRH Americas Materials we ask our folks to scope out their five year plan and also present it to their teams. With that comes conviction. It comes down to the idea of continuous improvement, identifying how to get better tomorrow versus what was done today.
Trade Commission Cements CRH, Ash Grove $3.5B Merger
The U.S. Federal Trade Commission (FTC) cleared the path for CRH plc to acquire Overland Park, Kan.-based Ash Grove Cement for $3.5 billion after the company agreed to divest facilities in three states.
To win antitrust approval for the deal, Dublin-based CRH will sell a Three Forks, Mont., cement plant and quarry to GCC Americas; three Omaha, Neb., area sand and gravel sites to Martin Marietta Materials; plus, three quarries and two asphalt plants near Kansas City to Summit Materials. The settlement also contains two three-year provisions: It grants GCC an option to use two Three Forks-fed CRH terminals in Alberta; and, holds that CRH, at GCC’s option, will purchase cement from the mill for distribution in Canada.
FTC proposed the settlement after a complaint, filed in U.S. District Court, alleged that the CRH-Ash Grove deal would have a harmful effect on competition for portland cement and aggregates in four states. The proposed acquisition would reduce the number of significant competitors in metro areas, regulators contended, increasing the likelihood that the merged company would unilaterally exercise market power – leading to agencies and consumers paying higher prices for materials. CRH and Ash Grove own Montana’s two sole portland cement plants, for example, and their subsidiaries are leading producers for sand and gravel in the Omaha, Neb./Council Bluffs, Iowa, market, and crushed stone in the Johnson County, Kan., market.
As suitors of the FTC-pinpointed cement, aggregate and asphalt operations, GCC, Martin Marietta and Summit Materials possess what the agency calls “the experience and capability to replace one of the merging parties as a significant competitor in the relevant markets.”
CRH and Ash Grove announced the merger in September 2017. The deal elevates CRH to a major North American cement producer, with upwards of 10 million tons’ capacity between 10 plants in the United States and Canada. The producer established a significant foothold in portland cement production three years ago, acquiring the Holcim (Canada) business amid the Lafarge Group and Holcim Ltd. merger.