This category covers establishments primarily engaged in manufacturing portland cement concrete manufactured and delivered to a purchaser in a plastic and unhardened state. This industry includes production and sale of central-mixed concrete, shrink-mixed concrete, and truck-mixed concrete.
327320 (Ready-Mix Concrete Manufacturing)
According to a study by the American Concrete Institute, concrete is the most widely used man-made product in the world, second only to water as the most used substance. Total value of shipments has steadily increased, from $17.2 billion in 1997 to $21.5 billion in 2001.
A material similar to stone, concrete is made by mixing selected proportions and qualities of cement, sand, gravel, and sometimes other aggregates. Water is added and the soft mixture is formed into desired shapes. Water and cement interact chemically to form a solid mass, binding the ingredient particles together, but the mixture remains soft so that it can be shaped before the concrete hardens.
Concrete was a leading material resource for building construction and for various products because of its strength, its ability to be molded into any shape, its resistance to fire and weather, and the availability of materials from which it is made. Concrete's limited strength under tensile stress was substantially overcome by reinforcement with steel and other materials in various ways.
The key to achieving a long-lasting concrete product lies in the proportioning and mixing of the ingredients. A mixture that lacks sufficient paste, made up of cement and water, to fill all the voids between the aggregates will be difficult to handle and will produce rough surfaces and porous concrete. However, a mixture with too much paste, though easy to place, will be more susceptible to cracking and in the long run will be uneconomical. NRMCA suggests that the ideal mixture will have the necessary workability for the fresh concrete and the desired strength once the mixture has hardened. A typical mixture contains by volume about 10 to 15 percent cement, 60 to 75 percent aggregates (usually sand, gravel, and rock), and 15 to 20 percent water.
Concrete businesses throughout the 1990s furnished much of the basic raw material for the construction industries, as well as for utilitarian and artistic products like railroad ties and birdbaths. A few of the larger construction contractors made their own concrete materials and products, while others relied on concrete producers for their products.
The ready-mixed concrete industry included businesses that made concrete and delivered it to contractors or other customers for constructing buildings, bridges, roads, sidewalks, or other facilities. The concrete production process involved the use of large-scale equipment and machinery located reasonably close to where the concrete was to be used so that the concrete could be delivered while it was still soft enough to be shaped.
The industry was heavily dependent on its primary customers, which were constructors of homes, industrial and office buildings, highways, and bridges. Consequently, the industry's market generally shadows the cyclical markets served by construction industries. For example, in the early 1990s the market for public works construction was strong while the other building markets were weak. At the midpoint of the decade, as residential and industrial construction began to strengthen, the level of public works construction continued strong. These public works projects included the construction of government buildings, highways, and public utility facilities. Concrete industries developed technologies in the 1980s and 1990s to make concrete building parts stronger and more attractive, which helped the industry to reinforce its market in the construction industries.
Many ready-mixed concrete companies were relatively small, having customers in one community or a limited region, primarily because soft concrete cannot be delivered beyond about 20 miles from where it is made. Yet to produce the concrete economically requires considerable expenditures for plant and trucking facilities. Most concrete plants were fixed, but some were portable and could be moved close to major construction sites. Many larger companies have grown by expanding their territories and buying smaller local firms. In 1992 there were more than 5,250 establishments producing ready-mixed concrete. Of those, less than 1,400 employed 20 or more employees. With increasing consolidation within the industry, the total number of establishments was projected to fall to about 5,000 by the year 2000, of which about 1,400 would employ 20 or more people. The number of establishments is greater than the number of companies in this sector, as several of the larger players in the concrete business maintain multiple production establishments.
Most of the ready-mixed concrete producers also were involved in related concrete businesses, such as the mining of sand and gravel, the production of crushed stone, cement manufacturing, or the manufacturing of concrete blocks, pipe, building structural elements, and other concrete products.
Most industry establishments competed against several concrete businesses in a small market area. In addition, several non-concrete products substituted for concrete provided another arena of competition. These alternative resources included lumber, asphalt, brick, and steel.
The NRMCA was the primary trade group supporting the industry. Headquartered near Washington, D.C., the NRMCA helped its more than 1,000 members by fostering research, training and product promotion programs, and by representing the industry before federal and professional groups. The NRMCA worked with many other trade associations in the ready-mixed concrete industry including the Portland Cement Association (PCA), the American Concrete Pavement Association (ACPA), the Concrete Reinforcing Steel Institute (CRSI), the Post-Tensioning Institute (PTI), and the American Concrete Institute (ACI).
The American Society for Testing and Materials (ASTM) began providing guidelines for the manufacture and testing of concrete products in 1933. Throughout its existence, the organization continued to revise its specifications as the ready-mixed concrete industry, and the technology it utilized, evolved. Additional organizations, including ACI and NRMCA, published other specifications.
Though the first use of concrete dates back many centuries, widespread usage did not occur until the nineteenth century, when improvements in the materials combined to form the cement ingredient were made. In the twentieth century, reinforcement techniques were developed that made cement structural components for skyscrapers and large bridges over highways and rivers practical. The development of trucks equipped to mix concrete in transit in the 1920s made it possible for the ready-mixed approach to become the dominant process for concrete use by the 1990s.
Portland cement was invented in 1824 by Joseph Aspdin, a British engineer, and had strength and water resistance qualities superior to those of previous cements. Limestone and clay were portland cement's principal ingredients. These raw materials were ground finely, combined, and heated in a kiln to form clinker, which was then pulverized. The name "portland" came from the Isle of Portland, where limestone was quarried. Portland cement was the primary type of cement used from its origination.
In 1909 concrete was first mixed in transit in a horse drawn wagon with gears from the wheels activating paddles in the mixing process. In 1913 concrete was taken to the work site in a dump truck. The first company to market a revolving horizontal drum mixer was the Paris Mixer Company in 1926. Between 1925 and 1930, the number of ready-mixed concrete plants in the United States increased from 25 to 100. The NRMCA was formed in 1930 and helped foster industry growth.
Concrete, like stone, has very good compressive strength; it withstands considerable pressure from above without crumbling. However, concrete does not have great tensile strength. A concrete beam between two posts will crack if too much pressure is placed in the middle of the beam. To overcome tensile limitations, steel rods were placed in the concrete before it hardened, reinforcing its tensile strength. Reinforcing concrete techniques were begun in the first decade of the twentieth century. Prestressed concrete can withstand even greater tensile stresses. Rods or wires are stretched before the concrete hardens around them. The released wires or rods then compress the concrete, providing additional tensile strength. Prestressed technology enabled cement to be used in much greater spans as required in the construction of large-scale buildings and bridges.
Between 1982 and 1996, the number of employees in the industry increased from 81,600 to 94,500, while the number of establishments producing concrete decreased from 5,379 to less than 5,100, reflecting a number of acquisitions and mergers.
The latter half of the 1990s saw a boom in construction throughout the United States, fueled by a healthy economy and low interest rates. However, as the millennium neared its end, there were signs that the boom was beginning to slow. Dun & Bradstreet's November 1999 survey of 200 U.S. construction executives indicated that the industry was entering a period of slower growth, giving it time to work off some of its back orders. The outlook through early 2000 pointed toward fewer orders, lower employment levels, and softer prices. "Our November survey suggests that the sector is entering a slow-down period, a trend which industry experts, and our survey respondents, have been predicting for some time," said David T. Kresge, Dun & Bradstreet's chief economist.
Many of the larger ready-mixed concrete companies benefited from centralized purchasing, marketing, and engineering operations. Many were involved in manufacturing fields related to concrete production, such as making concrete pipe, railroad ties, and construction structural elements. Because of the benefits of size, it was expected that the trend toward larger companies in the industry would continue.
There was steady improvement in the durability, appearance, and other qualities of ready-mixed concrete. Lower production costs and greater quality control also were achieved. These advancements were spurred by competition and aided by the many trade groups conducting research and providing training.
According to the National Ready Mixed Concrete Association (NRMCA), the U.S. industry's leading trade association, in 2002 there were 2,700 ready-mix concrete companies, between 5,000 and 6,000 ready-mix concrete plants, and between 70,000 and 80,000 ready-mix concrete trucks nationwide. Cubic yards put in place in 2002 totaled over 390 million.
During the early 2000s, a sluggish economy caused commercial and industrial construction to grind to a halt. Although new housing starts remained robust, overall construction was down, with marginal downward movement in the industry expected for 2003. As a result, the ready-mix concrete industry was losing some of its wind after 10 years of consistent growth. Total cement consumption declined over 3 percent in 2002, and was expected to lose another 1 percent in 2003. Overall forecasts are cautious, with renewed economic growth coming slowly into 2004 and beyond.
Major players in the U.S. ready mixed concrete industry in the early 2000s included Holnam Inc., Lafarge Corp., Lone Star Industries Inc., U.S. Concrete Inc., Florida Rock Industries Inc., Centex Construction Products, Vulcan Materials Co., Texas Industries Inc., Giant Cement Holding Inc., and CSR America. One indication of the strong hold foreign cement producers have on the industry is the fact that at least 50 percent of the industry's leaders are owned wholly or in part by foreign companies.
Holcim (US) Inc., headquartered in Dundee, Michigan, is a subsidiary of Switzerland's Holderbank Fianciere Glaris. The largest cement producer in the United States, Holnam employs 2,400 in its U.S. offices, including 15 cement plants and 70 distribution centers. The company reported revenues of $1.1 billion in 2002.
Based in Reston, Virginia, Lafarge North America is 54-percent owned by Lafarge SA, a French building products giant. Although the U.S. company is also involved in the production of gypsum wallboard and asphalt, its cement business accounts for nearly 45 percent of its annual revenue, which hit $3.3 billion in 2002.
A subsidiary of Germany's Dyckerhoff, Lone Star Industries is headquartered in Stamford, Connecticut. Producing Portland cement and ready-mixed concrete, Lone Star operates five cement plants in the Southwest and Midwest and also holds a quarter interest in Kosmos Cement, the owner of two additional cement plants. Parent-company Dyckerhoff posted sales of $1.6 billion in 2002.
Two other major players in the U.S. ready-mixed concrete market with foreign ties were Giant Cement Holding Inc., which was acquired late in 1999 by Cementos Portland of Spain, and CSR America, the North American subsidiary of Australia's CSR.
In addition to its operations in cement and concrete, Texas Industries is involved in the production of steel, manufacturing a variety of steel products from recycled material. Headquartered in Dallas, Texas, the company posted revenue of $1.3 billion for fiscal 2002, the 12 months ended May 31, 2002. Its principal customers are involved in construction in Colorado, Louisiana, Oklahoma, and Texas.
Based in Birmingham, Alabama, Vulcan Materials Co. produces concrete along with a wide variety of other construction materials, particularly aggregates. Vulcan also manufactures a number of industrial and specialty chemicals. The company posted 2002 revenue of $2.8 billion, down 7.4 percent from the previous year.
Florida Rock Industries Inc., based in Jacksonville, Florida, sells its products throughout much of the eastern United States. In addition to ready-mixed concrete, the company produces concrete block and a wide variety of construction aggregates. For fiscal 2002, the 12 months ended September 30, 2002, the company posted revenue of $723.7 million, an increase of 1.1 percent over the previous year.
Centex Construction Products Inc., headquartered in Dallas, is 60 percent owned by homebuilder Center Corp., of which it once was a division. Although the company produces a variety of building materials, its cement business accounts for nearly 50 percent of its total revenue, which was $503 million in fiscal 2003, the 12 months ended March 31, 2003.
U.S. Concrete Inc., based in Houston, employed nearly 2,000 people as of 2002. That year, the company posted sales of $503.3 million.
Most of the employees in the ready-mixed concrete industry were production workers. Larger companies and many smaller companies used computers not only for accounting but also for controlling the processes of concrete mixing and other production operations. The larger companies in particular employed engineers to help refine mixing and production processes.
Employment in the ready-mixed concrete industry in the year 2001 totaled 103,790, up significantly from 1991 employment of 86,100. Some 95 percent of the industry's workforce is employed by firms of 100 people or fewer. Industry shipments, valued at about $11.7 billion in 1991, hit $21.4 billion in 2001.
The principal international relationships of the ready-mixed concrete industry have been that some of the raw materials have been received from overseas, growing operations in the United States have been foreign owned, and some American companies have had facilities that produced concrete in other countries.
Concrete transactions between countries were somewhat limited by the fact that ready-mixed concrete production and sales were local operations. Also, hardened concrete products, like pipe and concrete block, were prohibitively expensive to ship overseas because of their weight. However, there have been significant cases of international ownership of ready-mixed and other concrete operations.
In the 1980s, cement from foreign sources filled 15 percent of U.S. needs, but not without conflict. A battle between cement producers in the United States and Mexico started in the late 1980s and escalated through the next decade. Mexico's Cemex—the largest producer in that country as well as the globe's fourth largest firm in the industry—was accused of dumping product in the United States. The Department of Commerce started tacking on anti-dumping duties in 1990, which were raised again in May 1995 from 43 to 62 percent. The Economist reported that 19 U.S. manufacturers grumbled because the duty was considered too low.
Reports were that U.S. cement companies prepared several proposals in order for the U.S. trade officials to address the issue, including the chairman of Lone Star Industries, Inc. Failing in his efforts to reduce import levels, Lone Star then became the largest importer of cement. By 1992, imported cement had dropped to 8 percent of consumption in the United States, but it quickly increased because manufacturers were reaching plant capacity and sales had increased. The United States imported 11.3 million tons of concrete in 1994, 60 percent more than was imported in 1993 and the most since 1990, according to The Economist. However, the latter half of the 1990s saw relatively modest growth in U.S. imports of cement.
The ironic aspect of this dispute was that approximately two-thirds of all U.S. cement companies were foreign-owned. Subsidiaries of companies such as Lafarge, Mitsubishi Materials Corporation, and Blue Circle Industries PLC either fully owned or controlled significant financial interests in many cement and cement products plants throughout the United States.
Many U.S. cement companies had been acquired by foreign interests in the early 1990s because reduced profits had made them vulnerable to takeovers. More than 65 percent of U.S. cement production facilities were acquired by foreign interests. The two largest cement producing companies in the United States were foreign owned.
For example, Lafarge, the largest cement producer in North America and a major manufacturer of ready-mixed concrete, was a subsidiary of a French construction company, Lafarge Coppee. Lafarge Coppee was a major building materials company operating in 35 countries.
With keen competition forcing ready-mixed concrete companies to improve service and cut costs, many of the larger companies looked toward research and technology to improve the quality of concrete products and reduce their production costs. Lafarge, for example, used scrap tires as a fuel and industrial by-products, such as spent refractory bricks and iron mill scale, as low-cost raw materials for concrete. This practice was not without controversy, and soon the manufacture of concrete-related products using cement made in hazardous waste burning kilns in the United States was questioned. It is thought that perhaps the toxic chemicals not destroyed in the process leach through the pipe or other products and into the environment; however, there has been little research that would either support or refute these claims. The concern spawned legislation at the local government level in the mid-1990s that would ban the use of or sale of "toxic cement," including the use of concrete pipe manufactured with cement made from hazardous waste-fueled kilns in public water supplies.
Using used tires as a kiln fuel was also challenged by environmental regulations. Proponents, however, as is the case with the use of hazardous waste as a kiln fuel, argued that using spent tires was an effective form of recycling. Both practices have met with numerous legal challenges.
For years concrete producers and industry groups endeavored to improve concrete's strength, durability, uniformity, appearance, drying time, and weight. By the early 1990s, concrete's compression strength had been increased to withstand 20,000 pounds per square inch (psi), while in laboratory experiments strengths of 100,000 psi were reached. In the 1960s, a level of 5,800 psi was considered high-strength concrete.
The American Society of Civil Engineers established the Civil Engineering Research Council (CERC) to spearhead a program of construction product improvements the society considered to be essential to meet infrastructure needs for the twenty-first century. The CERC developed plans to work with government, industry, and trade groups in designing and perfecting higher strength concrete.
Other research was conducted to create new types of concrete that would enable their use in products previously made from ceramics, plastic, or aluminum. Lone Star developed a new product named Pyrament that dried quickly enough to allow traffic on a road four hours after the concrete was laid. Greater strength-to-weight ratios and improved ability to absorb energy were achieved by incorporating reinforcing materials such as wood, glass, carbon, or steel into concrete.
Computer hardware and software were used by ready-mixed concrete manufacturers in the late 1980s to prepare job estimates, control production processes, and schedule deliveries. For example, Raia Industries Inc., of Hackensack, New Jersey, reported a 200 to 300 percent increase in productivity once it computerized its operations.
Ready-mixed concrete companies, as well as trade groups, were continuously seeking more efficient manufacturing and processing approaches. Examples included enabling longer delivery span, reducing truck and equipment maintenance costs, facilitating filling of bags, and automating the setting of concrete curbs.
In the late 1980s, Master Builders Inc. developed a technology that slowed the hardening process in the formation of concrete, thus enabling it to be transported over longer periods of time and distances. This technique was called the DELVO system and was said not to be detrimental to strength or other concrete characteristics.
However, as Lionel W. Vincent of National Cement Company of California Inc. wrote in Concrete Products, "The zeal for putting all that information into the end product is for naught without implementing the basics of concrete production. Over the years, our reliance on obtaining concrete durability has been unrealistically tied to a dependence on the increasing use of chemical admixtures, mineral additives, specialty cements, etc. …Thecost of a cubic yard of basic concrete containing the three basic ingredients—cement, aggregates and water—can now be doubled by adding anywhere from three to five (or more) special additives. What is evident here is that after 40 years of innovative technology and 'allege' improved knowledge, the 'back to basics' theory is still very valid. …Ifyou rely on additives or special cements andyou disregard the basics of good concrete, you will most likely not attain durable concrete."
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