Rock Products Presents the 2019 Quarry and Aggregates (Q&A) Forum: Industry Thought Leaders Open Up On Where We Are Going and How We Will Get There.
By Mark S. Kuhar and Josephine Patterson
David Boardman, founder and CEO, Stockpile Reports
John Garrison, vice president of sales, Superior Industries
Eoin Heron, USA business development director, CDE
Jason Hurdis, global market professional, Caterpillar
Mark Krause, managing director – North America, McLanahan Corp.
Matthew Lepp, heavy industry drive specialist, VDG
Jeff Lininger, North America sales director – West, KPI-JCI
George Mathew, chairman and CEO, Kespry
David Quail, business line director, Americas and Australia, Terex Minerals Processing Systems
Jeff Riddell, territory manager – Western USA; Matthew Fasoli, Commercial Division, Luff Industries
Trey Rollins, director of marketing; Dave Ciszczon, director of aggregate; Thomas Daniel, aggregate territory manager, Polydeck
So how’s business? What is your take on the national economy and also on the construction economy? Is business better today than last year? Are steel tariffs impacting you?
JOHN GARRISON: For Superior Industries, business in 2019 is strong – and much of it is a follow-through from an extremely strong 2018 – a year where a pent-up demand for plant upgrades was driven, in part, by new corporate tax rates and capital expenditure depreciation benefits. Large capital investments have been vigorous over the last 18 months, especially for complete plants and turnkey construction management projects.
During the first half of this year, our teams have focused on finishing and fine-tuning the large turnkey projects initiated in 2018. As we head toward a new year, levels are normalizing as to backlogs and lead times. Certainly in 2018, most manufacturers experienced particularly long lead times, which is a good problem to have but one that presents certain challenges.
Regarding steel tariffs, they have not impacted our business currently. Superior sources U.S.-made steel and due to its high demand, prices are higher, but we do expect steel prices to eventually level off based on demand going forward.
TREY ROLLINS: Overall, business is doing well. We continue to see year-over-year growth in our business and are forecasting a strong finish to 2019. There continues to be a muted optimism for the future of the economy. A prolonged trade war will only dampen future international growth opportunities in certain industries we serve, and the upcoming 2020 elections add a level of uncertainty around possible regulatory control changes and the ability of the government to push an infrastructure spending bill through Congress.
Tariffs are impacting the cost of some raw materials, which lead to a small price increase at the beginning of the year. To date, we do not believe that tariffs have played a role in decreasing demand for our products domestically, but we are keeping an eye on international demand and how geopolitics play a role in our business.
MARK KRAUSE: As we were preparing our budgets for the 2019 season I cautioned, “How can we take a normal year and not have it feel like a disappointment after the once-in-a-lifetime bubble we had during 2017 and 2018?” Frac sand has run its course for the time being and so we would be back to a normal aggregate cycle. The year has turned out exactly like that. We returned to some seasonality. Many parts of the country did have a wet spring and so some sites got started later than normal, but other than that nothing out of the ordinary. Now with those same areas having a wet fall, some jobs may not get completed, which will then carry into next year.
Tariffs have had some effect on our margins, but not as devastating as some had predicted. It is forcing us to look at our supply chain again and, in some cases, find some new sources. We did see lead time from foundries, especially North American foundries lengthen as more work came back to the United States from China.
Washington is a mess, and so focusing on states and local items looks to be a better usage of our time right now. It is frustrating that we cannot get traction on something as simple and critical as our national infrastructure, but that is the political environment we are in.
DAVID BOARDMAN: Business is strong and significantly better today than last year. We have experienced solid growth across several industries including aggregates, construction and DOTs.
JASON HURDIS: Speaking from the mobile construction equipment view, producers are actively investing in new machines and technologies and are starting additional plans for 2020 and beyond. 2019, to date, has seen a strong market for aggregate industry machines such as large wheel loaders, rigid frame trucks, large hydraulic excavators and large dozers.
EOIN HERON: Business is good, we’ve had a very strong 2019 so far. It’s been a year since we expanded our footprint in North America with the opening of our headquarters in Cleburne, Texas, in September 2018 – which represents our second significant investment in the states, the first being Cary, N.C. – and we have plans to expand further next year.
We’re looking to the future, by 2050 the global population is set to hit nearly 10 billion, and 70% of those people will be living in urban areas, so the demand for sand and aggregates will grow with increasing urbanization, and investment in urban infrastructure.
With increased demand will come a need for increased efficiency, with the limited natural resources we have available, and a need to optimize processes and maximize alternative resources; we are seeing this becoming an influencing factor for producers and their future investments. Companies are aggressively updating plants and looking to create new lines of business by adding equipment.
MATTHEW LEPP: Business in 2019 has been good so far with steady growth throughout, however, we did not see the same level of growth present in the industry in 2018. We would attribute this to a balancing of the significant capital spending done last year. The tariffs do influence business; however, we have minimized the impact through our recent manufacturing expansion in our facility located in Shelby Township, Mich.
GEORGE MATHEW: Business is great. Kespry continues to grow its customer base in our core industrial applications for mapping, inspection and insurance. We couldn’t be more pleased. Across mapping applications, Kespry customers have flown 45,491 missions covering 3.39 million acres and 517,198 stockpiles. The national economy is experiencing instability in several realms, including construction. That sector is facing skilled labor shortages that adversely affect its growth potential, but we continue to see demand for our products within it. Steel tariffs are not directly affecting the need to perform regular surveys on site operations or stockpiled inventories.
JEFF LININGER: Our business is returning to a more normal level after two incredible years in 2017 and 2018. We are seeing it return to normal faster in the West than in the East, which trends with the ramp up we saw in 2017 and 2018 where the West was the beneficiary of earlier growth compared to the East. If you look at manufacturer stock prices versus producer stocks prices, stock prices for manufacturers are trending down pretty much across the board while producer stock prices are trending up. This indicates to me that while producers are still busy, they have slowed their buying down.
JEFF RIDDELL and MATTHEW FASOLI: Business is excellent at this time and has been on a steady rise for many years now. As far as the future goes, I feel the overall economy for the nation will go somewhat flat compared to years past and I am sure some industries will suffer more than others. In the construction industry, we see enough large-scale projects and urban developments in progress that will carry the economy through this next election year. We probably won’t see the increases as in the past but still predict a small increase as our product line will still be in high demand.
DAVID QUAIL: We have experienced relatively robust growth in our core business over the past 12 months, driven by a combination of new product development and improving awareness of the advantages electric wheeled products have over traditional tracked solutions. This has been offset to some extent by a relatively depressed market for larger static plants. Steel tariffs have driven cost increases throughout our supply chain, but we have worked diligently to minimize the impact on our customer base.
How is your business doing specifically in the aggregates industry? Are producers actively investing in new equipment this year, or planning for future capital improvements?
KRAUSE: The answer varies some by geography and some by company. Some companies are indeed spending capital updating plants, improving efficiency and even, in some cases, building complete new plants. Other companies are using their dollars to buy other properties and secure longer-term reserves.
BOARDMAN: Aggregate producers continue to prioritize investments that maximize production and productivity. Where in 2008-2015 we saw companies working to focus on inventory management as a way to reduce costs (i.e. can we reduce a shift, can we stop producing earlier in the season, etc.), in 2019 we see companies focusing on inventory management as a way to ensure they are keeping up with demand. Today more inventory questions are driven by sales than ever before. Sales wants to know if operations is going to be able to deliver on a deal. This shift has continued to drive growth for our business.
HERON: Sand and aggregates are our bread and butter, it’s where we started and will always be a huge focus for our business, globally. Our business has grown significantly since we first entered the U.S. market in 2014. We’ve got longstanding customers in the Carolinas, the East Coast and ongoing projects in the Midwest through to the West Coast. We’ve invested in Cleburne, Texas, to grow and better serve customers with our wet processing solutions. We are continually growing as the industry is continually driving and becoming more focused on using all available resources, and we’re seeing that companies want to update old technology with cyclone washing technology and are very conscious of achieving increased water-management efficiencies.
There are always investments made to progress production efficiencies and yields, there is always room to improve. We see a lot of producers looking at how we can integrate within current systems in order to increase production, efficiency and reduce running costs but at the same time making little changes to an overall process, only focusing on the important and crucial parts.
MATHEW: The aggregates and mining industry customer base is stronger than ever with large nationwide and global producers expanding their drone program to standardize data companywide. Overall we are seeing greater than 80% retention rate for our aggregates and mining customer base. Yes, we are seeing investment more focused on application software capabilities since the technology for drone hardware has reached a lowest-common denominator point of entry. Kespry is providing an easy-to-use solution that is integrated companywide for aggregates producers to replace less accurate, more costly and less frequent methods of evaluating current and forecast material inventories and mine planning surveys.
ROLLINS: Our Mining and Coal segments continue to outpace expectations, which has helped offset a slowdown in our aggregate segment. We attribute much of the slowdown to extreme weather conditions that have affected large portions of the country this year as well as a general sense of uncertainty with the upcoming elections in 2020. We are beginning to see a pick-up in demand and expect demand to continue to be strong throughout the fourth quarter of 2019.
THOMAS DANIEL: In certain regions, producers are running full blast in an attempt to keep up with pent up demand. Generally, we believe the aggregates industry is in a good place. Our outlook for 2020 is positive.
DAVE CISZCZON: All the major producers are having record profits, but they have pulled back on their spending. It looks likes production will increase around 2% for the year. It feels like a lot of companies are buying time on committing to major purchases.
DANIEL: We have had several projects that were planned for 2019 pushed into 2020, and future planned capital investments for new equipment is elevated for 2020 compared to last year. This is good news going into an election year, as that can tend to cause uncertainty for producers.
CISZCZON: Our customers are making things last longer. I believe it goes back to the uncertainty that surrounds the upcoming elections and the inability of Washington to work together on policy.
LININGER: We are fortunate in that we manufacture so many different aggregate products across our three U.S. production facilities that we are more able to adapt to slowdowns in one sector than if we were not as multi-dimensional. We have seen a slowdown in our material handling and conveying side of our business, but the wash equipment and fines recovery side is still very busy. Portable and stationary plant sales were very strong in 2017, while in 2018 there seemed to be more activity in track plants. This year has been a more stable mix with activity in our portable equipment, stationary equipment, track plants, material handling, and recycle and demolition sectors of our business all seeing equal activity.
RIDDELL/FASOLI: Aggregates is close to 25% of our business and, as mentioned above with the number of projects in progress, we should see steady business through 2020. There has been an increase in new equipment purchases this year and I say this because we are seeing an increase in OEM opportunities in the U.S.
GARRISON: Aggregate is our primary business and, although the crazy pace of the last 18-months has slowed a bit, there are still a lot of companies quoting new plants and expansions for 2020.
One of our biggest growth areas continues to be the washing side of the aggregate market and demand is across the board – not only for the new wash plants and solutions we offer but also for all wash-related products. Producers are looking for wash plants that require less water and less real estate. They want solutions that reduce waste and maintenance, while recovering fines and gaining more saleable product.
Automation is another key focus. Our in-house automation team is continually improving systems to better meet the needs of both large and small operations. Producers want automation systems that are simple to install and operate. They want packages that monitor operating parameters and alert operators to maintenance needs. To lower operating costs, more and more producers are practicing predictive versus reactive maintenance strategies, and the latest automation programs keep them on track.
QUAIL: Our products are predominantly used in the aggregates industry; so as noted above, our business has seen robust growth. We are seeing producers investing in both the replacement of existing equipment and planning for new capital improvements projects. We are however seeing delays in the approval of some larger projects for 2020/2021.
LEPP: The aggregate business continues its strong growth. A surge in acceptance of drum motor technology over the past few years has caused several producers and OEMs in the industry to consider the use of them in their applications. Producers are focusing more on the cost/benefit relationship in purchasing and are diligently working to purchase equipment of the best long-term value to minimize costs over the life of the equipment. Therefore, the producers are getting a return on investment.
What problems are you solving for aggregates producers?
BOARDMAN: As aggregates companies gain more confidence in the accuracy of perpetual inventory they are beginning to trust the data for operational decision making. There has been a major shift of viewing inventory management as a competitive advantage versus a “must do” to keep corporate finance happy and off of your back. For example, we have been working with performance improvement groups and forward-thinking quarry managers to utilize continuous real-time inventory management to tune production models. While plants are defined to produce a given set of products at a given rate, we are finding that for specific products the production rate can be off by as much as 40%. Getting the plant tuned to operate to plan can make a significant impact on ASP and cost per cu. yd.
DANIEL: We continue to help solve wear life, blinding and throughput issues for our customers. I have not noticed any new issues that our producers are facing to date.
ROLLINS: Our customers continue to value the screening and crushing knowledge we are able to offer to help them run more efficiently. We are noticing a trend from certain customers who are focused more on throughput gains instead of wear life being the driving factor in product choice.
HURDIS: The problems voiced to Caterpillar range from the traditional aggregate operation needs, such as needing more production with less cost, to how to deal with the shortage of skilled labor, to learning what is the right technology and when is the right time to integrate it into their operations.
Traditional problems include optimizing fleets, from number of units, to right size of units, to effective system match; increasing production with current manpower; reducing operating costs; and improving site operational efficiencies.
The skilled labor shortage, while not new, is getting more and more concerning to producers. Assistance with how to and where to recruit new employees, engaging millennials, training new employees and retaining current employees, are at top of mind for many producers.
Technology integration is also moving up the list of answers to “What keeps you up at night?” Producers are aware of and are adopting onboard and other traditional technologies, such as grade control and payload monitoring systems, to enhance operations, improve operator efficiencies, close operator skill level gaps and increase – or at least manage – production requirements. Off-board technologies, such as telematics, are advancing rapidly and producers are interested. Many producers are still cautious about this technology as they work to understand how to change all the data available into meaningful and actionable information and to identify best practices for mixed fleet operations.
LININGER: One area of our business that we get more interest in each year is our dual power/hybrid technology on our track plants. We are introducing new models over the coming months and are finding that more and more customers are interested in this concept. The hybrid track plants can run either on the diesel engine on the plant or be powered by line power once in the pit. This gives producers the flexibility to track their equipment around the pit and on and off lowboys, but then plug into line power once in place and run using electricity.
QUAIL: We have seen great success with packaging multi-plant crushing and screening systems and automating them with our standard CCM controls to provide a complete solution, rather than a standalone product. Additionally we have invested heavily in the development of a comprehensive range of pre-engineered modular solutions. This has allowed our customers to execute on projects in a fraction of the time and cost of traditional custom engineered solutions.
HERON: Much of the washing equipment utilized on the market today has not evolved to meet growing demands for more efficient operations. Traditional wet processing equipment, whilst robust in nature, lacks the ability to efficiently process sand in a way that captures all saleable product, enabling the customer to maximize revenue over the weighbridge. It’s common to see operations where the waste discharge to the settling ponds contains anything from 10% to 50% sand. In the worst cases, the overloading of the settling ponds leads to the washing plant being shut down for periods of time until the ponds are excavated.
Tackling the loss of valuable fines to settling ponds offers the most potential for immediate boosts to profitability and production efficiency. Settling ponds are often inadequately sized, often due to a lack of available space or to prevent reserves being covered, which in turn leads to challenges in keeping the water clean for the washing process. Our ability to recover all valuable material and sufficiently wash desired products with less water and power requirement is enabling producers to reduce downtime and maintenance.
RIDDELL/FASOLI: Luff Industries just celebrated 40 years of business and we feel you don’t make this milestone if you are not providing top-of-the-line products and solving customer issues on a regular basis. Luff industries is an innovator in the industry and solves many problems in many ways. Luff Industries has completed an 18-month study on idler bearings and bearing failures and now has standardized SKF/Peer bearings on its entire product line. Luff’s design of the Anti-Lock Shield/High Moisture Seal prevents idler stoppage from conveyed material getting trapped between the frame and the roll, and also provides a grease barrier for extremely wet applications. Luff has redesigned the rubber disc return roll with an option for a full 1-in. tall urethane doughnut that provides eight-10 times the abrasion resistance over rubber doughnuts. The anti-stick properties of urethane allow belt contaminants to fall off and eliminate belt-tracking issues.
KRAUSE: Water, water management, water recycling are areas where we see a real need especially going forward. Sites that previously did not have to wash product, are likely headed in that direction. As we use up some deposits, producers now have to turn to other sites with some potential quality issues. Products that met spec before without being washed may not pass today. So adding wash cycles and then handling the water and waste are issues the site did not deal with before. There are many ways to wash products and finding someone who will work to develop a solution to each site’s need is what we do. Ideally the site will be able to recycle the process water, in a closed loop.
President Trump and Congress have not been able to work together to make infrastructure investment a priority. How confident are you that we will see a solid plan in the coming year? What do you base your answer on?
ROLLINS: I am mildly optimistic that an infrastructure spending bill will be passed in 2019. It’s the one item of business that both sides can claim as a win for their respective party. There was a lot of buzz earlier in the year about Washington working together to get something done, but there are a lot of details to be worked out about who is going to pay for the bill.
CISZSZON: I have zero confidence. Washington doesn’t seem to be able to work together. The talk is about $2 trillion in spending, but only $200 billion of that is committed from the federal government. It’s hard to imagine $1.8 trillion coming from the private sector.
KRAUSE: I have no confidence we will see a bill in 2020. Even if it wasn’t an election year, I don’t see the two parties in Washington working together on anything. They are much more interested in pointing fingers and making the other party look bad than they are about solving problems and serving the people that elected them. I know from our viewpoint it is not a difficult problem to fix and would provide so much economic benefit, but that would take compromise and allowing both sides to claim victory.
LEPP: Infrastructure spending will continue to be a hot topic with no clear solution in sight. Investment in America’s infrastructure has never been more needed or important to the economic future of the country. Members on both sides of the aisle will need to realize that this spending will benefit everyone – whether through the improvements themselves or the investment into the economy, which will produce job growth.
HERON: The growing population and increased demand for infrastructure investment is going to become more acute in 2020. We believe it’s something that should be prioritized, but fear that current political instability will prove too distracting in the 2020 election year. We believe this decision will affect a large portfolio of people and industries. Infrastructure solely relies on this particular industry to perform and deliver to enable growth.
MATHEW: We feel confident that a plan will likely be put together in the coming year. We have not seen much progress since the midterm elections, but with the coming election year there will be increased optics on outstanding proposals not completed during the first term.
LININGER: Though there is a lot of disagreement between the two major political parties, I hope politicians will be able to set aside their differences and develop a solid plan for this important issue. A long-term investment in infrastructure will not only ensure safe and efficient transportation for millions of Americans, but it will also help support and grow our economy and allow equipment manufacturers to compete globally.
RIDDELL/FASOLI: With all that is going on in politics at this time I don’t see how this can be predicted. Trump’s time seems to be wasted fighting with Democrats who spend all their time trying to remove him from office.
GARRISON: There have been glimmers of potential bipartisan cooperation on major infrastructure investments; however, making that happen in an election year has a very low probability – especially since infrastructure funding typically comes with higher costs to taxpayers. The various infrastructure bills under consideration in 2020 are arguably a Band-Aid approach and lack the funding to address all the work that we need to do.
As an industry, we need to keep the pressure on our elected officials. Call them, write them, or visit them. In addition to ongoing efforts, each year a team from Superior attends the NSSGA legislative forum in Washington, D.C., where we visit with members of Congress to advocate for a much-needed, comprehensive infrastructure bill.
QUAIL: Given the current political environment as we look toward 2020 elections, we feel that a comprehensive infrastructure investment is unlikely at best.
Have you noticed changes over the past year in the way aggregates producers evaluate equipment and consider it for purchase? Are buying decisions made more on the corporate side or more on the production side? Is used equipment getting a closer look right now? Are you evaluating your online presence to enhance sales?
LININGER: There is a couple of notable changes I have noticed over the last year, or that have become more prevalent over the last year. First, more attention is being paid to the return on investment of a piece of equipment. During the recession, a lot of customers were simply buying based on price. They were only buying because they had to and because money and profit was tight, they would prioritize the price of the equipment over other factors like quality, longevity, brand, etc. As we transitioned through 2017 and 2018, there were so many customers buying equipment that lead times and equipment availability became an issue. End users needed to buy something to finish jobs or to upgrade their plants to increase production. We saw a trend where end users could not/would not wait for their preferred vendor/dealer to have a unit available so they would be forced to buy whatever was available. As we have transitioned into 2019 and business levels have moved to a normal level, I see more of a hybrid decision-making process in purchasing trends. End users today seem more focused on the mid- to long-term costs of a piece of equipment. They are asking about the cost, both in dollars and in time, of liner changes, asking more for spare parts lists and suggested stock items, and more are taking advantage of the extended warranty packages we have available. All of these things can have a big impact on the total cost of a piece of equipment, far beyond just the original acquisition cost.
Another trend is an increased interest in renting and leasing units. The same level of long-term confidence to purchase equipment that we saw in 2017 and 2018 has not been as prevalent in 2019, so it seems that some of those customers who would have purchased over the last couple years are now starting out the equipment they are looking at as a rental. This gives them the ability to take advantage of new technology, increased production and improved quality without the full commitment of purchasing. If at the end of the rental period their long-term business level does not warrant converting the rental unit to a sale, they can return it without penalty.
We have seen producers doing both; investing in new equipment for use right now as well as planning for 2020 and beyond capital improvements. We have seen more projects get pushed back to 2020 this year than we had anticipated, based on business activity over the last two years. I think producers are being cautious, given the uncertainty of the 2020 election and the potential impacts, both good and bad, that those elections and the election processes in general will have on our economy. I think the trend of increased interest in rental equipment that we have seen this year will continue in 2020. With that increased rental interest, it will be important for dealers to have sufficient rental inventory available for producers or they may risk losing out on opportunities.
ROLLINS: Buying decisions for our products are typically made at the production level. We have great relationships with our customers at both the production and corporate levels and are able to work with both sides to provide the best solutions for our customers. When dealing with wearable items, it’s important for us to have our products available when customers need them. We work hard to keep our most popular panels stocked and lead times short for custom products.
We are constantly looking at how we can improve our online presence to enhance sales. We are seeing more and more requests for information and quotes come through our digital channels. Our website and social media channels are an extension of our brand and give us more opportunities to create conversations with current and potential customers. As more and more millennials move into decision-making roles, we know they will turn to the internet as their first source of information and we believe purchasing habits will continue to move online as businesses find ways to increase convenience for their customers in the B2B world. We want anyone looking for our screening solutions to be able to easily find us and make the purchase they need painless.
HURDIS: Equipment evaluation and consideration is changing for many aggregate producers. Producers are doing significantly more online research before engaging their sales representatives or walking into equipment dealers. Dealer sales personnel now need to provide both equipment specifications and machine economic factors, such as value analysis, production advantages, fuel advantages, operating cost advantages and equipment payback analytics.
For standalone technology purchases, most producers want to try before they buy. They want to try or test out the technology with their personnel on their sites before committing to a purchase. Equipment with integrated technologies such as telematics, grade control, or payload monitoring are increasingly available. These technologies spur requests for on-site, hands-on trials that are part of the evaluation and purchase discussions.
Buying decisions, whether corporate purchasing side or site production side, varies by customer type and size of the operation. Request for Quote (RFQ) and Request for Proposals (RFP) are common practices used by many producers. Other producers have formed equipment acquisition teams that include personnel from management, purchasing, accounting and operations to review equipment needs, develop equipment replacement and equipment allocation plans, and make acquisition decisions including buy new, buy used, lease or rent.
An online presence is necessary in today’s market. The ability to configure, spec and buy mobile equipment online is being embraced by producers.
KRAUSE: The biggest change in equipment purchases that I have seen over the past few years is what I call the Amazon Affect: “We investigate what we need, could be any time of day. Study any information we can find so we can make a more informed decision. Then when I know what I want, I want it now. Tomorrow is too long because I waited to buy. I feel that if I can’t get it as fast as I want it, by spending a little more I can get it when I need it.” While it was very common to wait 14 to 16 weeks for a custom-engineered solution, today if you say anything over eight weeks, they will go find the next person who has it in less time. Also for many companies obtaining capital is getting harder and so the ROI is shorter (two years or less) and the savings have to start immediately.
So for us as a manufacturer this means ourselves and our local dealer network need to have inventory, parts and machines, provide as much information in written, video, and animation variety and make all of it easy to access.
HERON: There seems to be a lot of future planning, with producers investing more time and energy in the discovery and research phase to help inform decision-making. We believe this is a result of previous errors in terms of process design, or off the shelf solutions that has led to years of inefficiency and poor return on investment/reduced profits.
A more structured and customized approach has led the way in making the correct decision in terms of process design, which will in turn result in a more fluid, efficient and consistent production for the foreseeable future. We’re seeing huge uptake for demonstrations or open house days where prospective buyers can see plants at work and engage with customers to inform their decision-making.
We have a very strong online presence and continually hear positive feedback from customers and prospective buyers about our project case studies.
BOARDMAN: With respect to drones we are seeing aggregate producers begin to make buying decisions based on business objectives versus technology enthusiasm. Where initial purchases were often emotionally driven by quality control analysis or GIS engineers’ decisions, purchases are now facing greater scrutiny by senior management as to how they solve business problems at scale. As investments in drones and the resources required to fly and maintain them increase, producers are beginning to outsource operations more frequently.
LEPP: Over the past few years we have noticed that producers are continuing to work diligently to make informed decisions in new equipment purchases, as well as seek out new technologies that could increase system quality and profits. We have seen this both from the corporate side and the plant side. VDG has been reviewing our online presence and has increased value to the online market to enhance sales, through e-commerce and online motor configuration.
MATHEW: Yes, we have seen an increased interest in solutions that allow each site to deploy their own drone opposed to sharing a drone among multiple sites. With company-wide saving initiatives, we are seeing more Master Service Agreements from companies take advantage of single-platform pricing that serves multiple sites with unlimited drone data. We have always maintained an informative and accessible company website, so interested parties can learn more about our solutions and easily contact sales teams if interested.
RIDDELL/FASOLI: We do see more year-end purchases but overall our products are purchased on an as-need basis by the production side. If corporate contacts come into play those are made by upper management and we have seen a few major aggregate producers go this way last year. I am not seeing any interest in used equipment at this time, but that can change if the economy were to slow for an extended period. As the world turns more digital every year, Luff has taken a closer look at its online presence. There has been an increase in online spending for advertising and optimization, with a goal of increasing visibility and traffic to the website. The growth in traffic has translated into an increase in the amount of leads generated.
GARRISON: The way that companies research and buy equipment really hasn’t changed a whole lot over the last year or so; however, in 2018, there was such a great demand to get equipment quickly that some buyers focused on what was immediately available versus waiting for models that would meet exact specifications.
For the most part, today’s buyers continue to carefully evaluate their potential equipment purchases. They want the most efficient processing setups possible, so they search for customized solutions that deliver the highest capacities at the lowest costs per ton.
As an equipment manufacturer, we work with both the large corporate producers, and the small- to medium-size independent operations, so evaluation and buying strategies vary, but input from all levels is key to making well–informed choices. Even some of the large corporate producers favor a good blend of corporate purchasing functions tied in with feedback from the field. Most capital expenditure meetings include buying committees that comprise corporate purchasing, area managers, equipment specifiers and buyers, and onsite operations and maintenance personnel. Input from the site level is usually very important and the availability of local equipment service and support in each region is often a big factor in the buying decision.
Take a minute to plug your products and services. What products manufactured by your company are you focusing on these days? What is hot?
LEPP: VDG’s Heavy Duty Series of drum motors, along with our GrizzlyDrive brand are growing strong. In the past year, we have introduced new planetary gearbox options in motors up to 500 hp, providing a broader range of available speeds. Also introduced in the past year, IronGrip lagging, which is a metal bar reinforced lagging. IronGrip lagging is available with both ceramic embedded rubber and hot bonded rubber. It continues to provide long lagging life in the harsh environments of the aggregate and mining industries.
RIDDELL/FASOLI: Luff is proud to have been in business for more than 40 years. The true advantage to using Luff products is our industry leading two-year warranty combined with our SKF Equipped program.
ROLLINS: We pride ourselves on being product and application innovators who are able to design custom products that solve specific problems for our customers. One of our newest products, Kwikdeck, has been a huge success for producers who want to use modular media, but have been concerned with the upfront costs needed to convert to a modular system. Kwikdeck is installed using a side tension set up and is perfect for rental screens, temporary screens that move around, and portable top decks that experience high wear; among other dry applications.
We’re focused on being a complete screening solution for our customers and are constantly looking to expand our product offerings to meet customer needs. We’re very excited about what 2020 will bring and the products we have coming through our R&D pipeline.
KRAUSE: Our relatively new line of modular and configurable sand plants takes existing components, like our dewatering screens that we have been building for 39 years, and puts them in a predesigned, easy-to-set-up, easy-to-move-to another-site (better use of capital dollars), and readily available position. Using the same concepts as our custom plants provides users mobility and flexibility in a package that also allows for easy maintenance. It also allows the plant to change from a single to a double wash, if necessary, and produce three sizes of aggregate, and either one or two sizes of sand.
HERON: We are driven by two key goals: 1) answering the challenges of producers and 2) better serving our customers. We’re doing the first through the introduction of our new revolutionary all-in-one wet processing and water recycling system. The patented Combo encompasses five processes – feeding, sizing, sand washing, stockpiling and complete integrated water management, which is a first for the industry and an important innovation to address a challenge faced by all customers of wet processing systems.
The Combo is a technological response to the common challenges faced by materials producers across the country. Traditional processes have been employed over the past 20 to 30 years but are now becoming outdated due to upkeep costs and inefficiencies like sand loss to ponds, high water consumption, pond excavation costs and out of spec productions. The Combo has been designed with a focus on transferring greater reliability and efficiency benefits to customers. Offering a turnkey solution that delivers unrivaled control of in-spec washed products from a wide range of feed materials across the construction, C&D waste recycling, industrial sands, mining and environmental sectors.
We are doing the second thorough investment in our U.S. footprint. Our North America Center of Excellence is home to a bigger, dedicated support team that is committed to putting our customers’ needs first. Our fully stocked warehouse with an excess of $3 million in spare parts on the shelf for the North American market ensures the right equipment is available across the region. Our new headquarters will see business development, technical support, engineering, CustomCare and marketing personnel serving and supporting the local customer base.
QUAIL: The CRH1111R Portable Closed Circuit Impactor/Screen Plant features the TI4143 impact crusher and a 5×16 two-deck inclined screen. The crusher is hydraulic clutch driven direct from a 350-hp Scania diesel. All other components are electric driven from the 150-kw generator. With its large capacity screen, wide conveyors and low maintenance electric driven components, this is a highly productive, highly portable plant designed for crushing concrete, asphalt or shot rock.
The new Cedarapids TG Series spider bearing cones consist of four models focused on the aggregate and construction industries. Each model is available in two versions, the TG (Fine) and TGS (Secondary). The TG style can be run in a secondary, tertiary and a quaternary position; the TGS models, which can take an approximately 75% larger feed, are perfect for large feed secondary positions. There will also be two larger models available for large capacity mining and quarrying applications. This new series of cones will complement our current market leading Cedarapids MVPX Series and the Cedarapids TC Series.
The Canica CRV Series portable plants feature the world-renowned Canica Vertical Shaft Impactor, available in a number of chamber configurations. These highly mobile all electric plants come with our latest CCM automation system and are available in either single or dual drive. These crushers can handle the widest range of applications and materials while producing at high production and are ideally suited for sand manufacture.
The Simplicity SI Series screens are intelligently engineered with common footprints and wide spacing between decks, allowing for increased ease of maintenance and quick media changes. Built with a robust drive mechanism and oversized bearings, these units can handle large tonnages and a wide variety of applications. Utilized as wet or dry screens, these units have adjustable stroke and speed combinations to fit your specific application. With the recent addition of the new 8- x 20-ft. option, Simplicity SI Series screens are now available as 6- x 20-ft. or 8- x 20-ft. and offer two- or-three deck configurations.
Portable plants are a growing portion of our business as they offer customers the flexibility to move plants from site to site easily or within an existing site as it grows. Our CRJ3255 portable jaw plant has proven to be a popular solution, and our engineering team has been able to design optional configurations including a diesel drive option and various axle configurations to meet customer’s regional transportation and site specific needs.
MATHEW: The Kespry aerial intelligence platform can automatically process data collected with DJI Mavic and Phantom 4 drones, in addition to our Kespry-manufactured drone installed base. The platform is purpose built for inventory management, mine planning, site operations management and other use cases, and serves as the single, standardized database across the entire organization. operations managers, financial departments, mine planning teams, and sales teams can all frequently access and review 2D and 3D models, reports and dashboards to better monitor, track and reconcile onsite materials for increased revenue.
LININGER: As I mentioned previously, dual power/hybrid technology is being asked for on more and more of our track plant offerings. We are expanding the Astec Mobile Screens multi-frequency portable and track plant line. These multi-frequency screens allow for the ability to run as a conventional, two-bearing screen on the top deck and high-frequency vibrators on the bottom deck. This creates a screen that operates at a higher G-force and is a great fit for applications in industrial sands or where higher moisture contents are present.
We have also added a two-deck 4- x 7-ft. pre-screen option to our FT4250 mobile impact crusher plant. This new option will allow producers to scalp the feed, crush the material and post screen it all on one unit. By pre-screening the feed, users can maximize their scalping ability and minimize the amount of undersized material passing through the chamber, which will reduce wear costs and increase the amount of final product by up to 30%.
GARRISON: Superior is a single-source supplier, from rock face to load out, as we say – and that allows us to maintain the highest level of quality control. We’re also able to custom-configure turnkey plants, wheeled portable plants and modular skid-mounted plants far more effectively. Plus, we can package full, turnkey site solutions through our construction management division.
To meet the growing demand for targeted sand washing systems, we manufacture our own Helix Cyclones in a range of models so that we can package our Spirit Sand Plants with the right cyclone for a given application. These modular washing and classifying plants merge the Helix Cyclone, a dewatering screen, sump tank and slurry pump into a single plant for cost-efficient sand production, dewatering and fines recovery.
Another targeted solution is the Alliance Low-Water Washer that accepts a dry feed directly from the crushing circuit. The system processes the material into a higher-value manufactured sand, while cutting water use by more than 75% – and leaving as little as 8% moisture in the discharged manufactured sand.
We’re also launching new crusher models in cones, jaws and vertical shaft impactors, along with new and improved crushing automation packages.
As to our flagship line of TeleStacker Radial Stacking Conveyors, we’ve added a 210-ft. model; and we’re offering new, innovative auto-leveling technology, which maintains level operation during radial-arc travel mode and prevents premature idler wear, and belt tracking issues.
As one of the few manufacturers to develop and build both conveyor systems and conveyor components, our engineers are continually innovating component design for extended wear life, greater belt protection and safe high-capacity performance. Our component technologies, combined with our knowledge of how best to design material transfer points, allows us to build the most clean, efficient plants, especially in portable or modular formats.
BOARDMAN: We are focused on digitizing the entire aggregates supply chain – from the customer site to the quarry – to drive cost out of the business and optimize logistics and operations. It is no longer a question of “if” this will happen buy “when.” While drone fever fades we see machine learning and artificial intelligence driving the next phase of innovation. We will move beyond purely volumetric analysis into the optimal production and movement of material.
HURDIS: Caterpillar is focused on bringing the next generation of products to the market with integrated technologies to increase productivity, reduce maintenance costs and improve fuel efficiency while matching the product offering to customer needs. Examples of these products include Cat Next Generation Hydraulic Excavators and Cat Next Generation Dozers, including the new D6XE electric drive machine. Caterpillar also has expanded product offerings to enable the customer to match production and cost factors with the best possible machine solutions.
Caterpillar is also investing in services capabilities to help customers improve asset utilization, while reducing owning and operating costs. With our suite of digital applications, such as the Cat App, for example, customers can monitor their fleets from anywhere and maximize uptime. Another popular app is Cat Inspect, which helps customers identify the repair needs of an asset and then align the timing of the repairs to lower their overall repair costs. With the integration of our apps with other advanced systems, like MyCat.Com and VisionLink for fleet management, customers have a seamless connected experience.
How do you expect the industry to perform in 2020, given the fact that it is an election year, not to mention a ConExpo-Con/Agg and MINExpo year?
HERON: We are geared up for a very strong 2020 with further investment in our U.S. footprint we expect to see positive correlation as we have over the past few years, getting our products and, most importantly, our industry knowledge across to the potential customers is imperative.
ConExpo-Con/Agg and similar on the ground, face to face opportunities will aid this growth. We believe that the more structured approach currently being employed by most of the medium to large sized companies will work in our favor to ensure the correct process is achieved at various productions across the country.
September saw a growing focus on climate action and we believe that will be an increasing factor for infrastructure legislation and investment, driven by consumer demands, our technology is design to maximizes resources and reduce wastage so we believe we’re perfectly poised to help business navigate this demand.
KRAUSE: I expect 2020 to be much like 2019. There will be opportunities. There will be work. Our role as manufacturers is to provide that knowledge and training the industry desperately needs. As mentioned above if you have it you will sell it. If you don’t the end user will go find it somewhere else. The concerns over a possible slow down will make dealers less likely to load up on inventory as they do not want to get stuck with equipment if the slowdown does occur.
We will continue to listen to the end users as to what their needs are and react to those needs. It will differ by company and geography, which will make our jobs tougher. Ours is a good, fair industry. No one is perfect, but the expectation is that you will take care of the issues with a sense of urgency. It is still a people business. The people that can be relied upon to show that urgency will be the ones who excel in 2020 and beyond. As much as I talk about the Amazon World, when an issue arises and the plant is down or it is not making the product they want, that is when the real service shows up.
The role of the local servicing dealer will continue to evolve as well. As mentioned about industry issues, the lack of trained technicians will mean that the local dealer will be called upon more and more to provide the trained technicians.
LEPP: The year 2020 should prove to be a very interesting year. Typically, ConExpo-Con/Agg and MINExpo years are very exciting years for the industry as we see new products and innovations. However, with every election cycle there can be a significant hesitation present in spending, especially in capital projects. We expect the latter part of 2020 and 2021 to show growth once the election cycle has ended.
BOARDMAN: In 2020, we are expecting continued rapid growth as the industry continues to invest in digitization and optimization. Should the down turn begin – we would expect slower growth – but continued growth as producers will continue to invest in inventory management to make better decisions on optimizing resource utilization.
DANIEL: The outlook for 2020 is positive. ConExpo-Con/Agg and MINExpo offer an opportunity to get in front of customers in a different atmosphere and to discuss upcoming projects.
ROLLINS: With ConExpo-Con/Agg taking place in the first quarter of 2020, there is the possibility for new business to be created from the exposure the trade show offers. ConExpo-Con/Agg and MINExpo offer great opportunities to get in front of new potential customers. We see these shows as the perfect place to launch new products and expand the reach of our business and brand into new industries.
CISZSZON: Election years always present a certain level of uncertainty in business, but I believe the shows will help create buzz and excitement in the industry. The need for improvements to America’s aging roads and bridges aren’t going away – no matter what’s going on in Washington.
MATHEW: We are optimistic that 2020 will bring more business opportunities to the industry with anticipation of re-addressing infrastructure investment as a topic of interest for the coming elections. The basic premise of industrial efficiency, bridging the worlds of AI and ML with sensor-based input, and ensuring worker safety aren’t partisan discussions. Kespry looks forward to working with the current or future administrations on transforming industrial work for the better.
RIDDELL/FASOLI: 2020 will show a continued increase in business for Luff industries with our unique idler design, performance enhancing accessories, and our two-year warranty we are proving to be a cost savings addition to all bulk material handlers and continue to be sought out by new industries on a regular basis.
QUAIL: As we look to 2020, we are preparing for overall demand to be flat. With that being said, given our ongoing investment in new products and solutions we expect to see ongoing growth opportunities.
LININGER: I feel that end users will continue to be busy in 2020. It is yet to be seen how much of that activity will translate to local dealers, and then how much of that will reach manufacturers. If there is good confidence at the producer level, the dealers and manufacturers will see it on the equipment sales side. If there is not a high level of confidence, dealers and manufacturers will see stronger parts sales as producers repair rather than replace.
Please comment on anything that is impacting your business right now that you would like to bring up.
KRAUSE: The two things we are discussing, when we are not discussing equipment, are 1) Trained help. This is an issue that will not be going away any time soon. We have talked about this on many levels. Truck drivers, mechanics, plant operators are just some of the many jobs that need to be done every day at all operations, but they are not the kind of jobs younger people are looking to get in to. We have been working with community colleges and even into high schools to promote all of the benefits of working in this industry. 2) Dust. There have been more rumblings that a decision on silica dust is forth coming. Many associations are trying to show the science that negates some of the negatives articles written which started with black lung from coal dust. We need to keep up the fight.
HERON: We believe it’s a case of hard lessons learned… importantly, the construction industry isn’t taking its eye off the ball and won’t lose focus due to current political instability. The economy is now more varied and not as dependent on the housing market as in the mid-2000s, which thankfully reduces uncertainty for our industry. An infrastructure bill would see growth pushed through 2025.
MATHEW: Our customers continue to tell us they want to further scale up their use of the Kespry platform across more sites. To that end, we’ve partnered with DroneBase to offer a pilot network to ensure our large, enterprise customers can expand their use of Kespry easily and cost-efficiently. They’re also telling us they want to use even more drones than the industry-standard DJI and Kespry-manufactured drones we currently offer. So, we’re actively looking at expanding our drone integration further. We’re extremely happy our customers are looking to extend their systems with larger use cases. Our business is rapidly evolving in consultation with our customers. Kespry’s goal is to always be in lockstep with their needs.
QUAIL: We are seeing growing interest in complete system solutions versus individual plants, especially for larger producers. We are also seeing larger producers looking to upgrade from hydraulically driven tracked units to larger production all electric systems that offer improved efficiency and decreased downtime. We have also been seeing a growth in demand for our modular products, which provide a quicker set-up time and lower overall cost per ton versus traditional static plants, by reducing the construction time of a new site by six months or more.
RIDDELL/FASOLI: 2019 presents a few challenges with the upcoming Canadian federal election. Positive things to come if we elect a PC government. A Liberal government would present more of the same economic challenges. [Editor’s note: at press time, Liberal Party Candidate Justin Trudeau won re-election as Canadian prime minister, albeit with a minority government.]
GARRISON: Looking forward, 2020 should be an interesting year, perhaps a mixed bag of both caution and excitement. It’s an election year where buying typically slows down, yet it’s the year of both ConExpo-Con/Agg and MINExpo – and those gigantic shows generate a lot of buying decisions and enthusiasm over the latest and greatest processing solutions.
When producers visit us at the shows, they’ll experience a whole team of people – product managers and engineers who design solutions that deliver greater productivity at lower costs per ton – and that applies to all products, both the new models and those within our flagship lines. Importantly, we create the best solutions through continual tweaking, fine-tuning and a keen focus on customer feedback.