Construction may be coming down from record homebuilding highs, but commercial activity is still pushing suppliers to keep up. Globally, China is trying to establish itself in North American markets. Also, rising energy concerns have more people looking for ways to conserve fuel, build smart and lessen their environmental footprint.
These shifting tides—along with a record crowd of over 90,000 people—descended full force onto this year’s World of Concrete, a show that will be remembered for its unprecedented rollouts, including hybrid excavators, Chinese booth displays and green building materials.
Contractors swarmed into the Las Vegas Convention Center on Jan. 23-26, taking in the sights and sounds of the latest wares. The show opened with a bang, reflecting a surge in commercial and public construction that economists say may help offset a soft housing market and stoke a modest cement consumption increase in 2007-08. Higher U.S. cement usage is predicted despite a 12.9% drop in new-home starts nationwide last year, according to Skokie, Ill.-based Portland Cement Association. Homebuilding accounts for only about 25% of all Portland cement sales, says the group.
Cement use is increasing due to relative price advantage over other building materials.
“Concrete’s relative pricing compared to competing building materials will result in a 2% cement intensity growth in 2007,” said Edward J. Sullivan, PCA’s economist. “We expect overall construction activity to decline 1.8% in 2007, but concrete intensity growth will more than offset that.” Consumption is expected to grow a modest 0.3% this year, followed by a 2.7% increase in 2008.
Preparing for another ramp-up of demand, suppliers are eyeing potential acquisitions. CEMEX’s bid to take over Australia-based Rinker Group Ltd. is still alive, according to sources on the show floor. The giant Monterrey, Mexico-based cement producer reportedly raised its $12.8-billion buyout offer by $1 billion. A decision is expected in March, about the same time Rinker’s fourth-quarter financials announced. CEMEX officials declined comment.
Energy moved to the front burner, too, as diesel fuel, the second-largest construction expense after labor, fell to a 53-week low of $2.43 per gallon, stirring fears that it will soon spike again. Prices dipped 19¢ in six weeks as a result of an inventory glut caused by a mild winter, with refiners producing more diesel fuel from already-high heating oil supplies.
Hybrid excavator uses a small diesel engine and battery-powered electric motor.
Tavio Headley, an economist with the American Trucking Association, said the ATA is seeking to create a single diesel standard to help eliminate shortages and stabilize pricing. Boutique fuels used in certain parts of the U.S. may exacerbate local shortages, ATA says.
Taking a leadership role in fuel conservation and global warming was New Holland, a division of Lake Forest, Ill.-based CNH Global N.V. It unveiled the first “hybrid” excavator, a 7-ton unit powered by 2.2L diesel engine, 37-kW electric motor, regenerative swing drive and lithium-ion batteries. It made its first North American appearance after showing up at Intermat last year in Paris.
So far, the company has produced four of the “HE” prototypes but does not know when units will go into production, if at all. “We are not ready tomorrow, but we are the only one with working prototypes,” said Franco Fenoglio, president of New Holland Construction.
The vendor’s development partner, Kobelco Construction Machinery Co. Ltd., is running two prototypes on construction sites in Japan. The machines have racked up more than 1,000 hours and may end field trials later this spring, according to Kobelco officials.
Engineers plan to look at the results and determine whether mass production is feasible, said Masayuki Komiyama, manager of Kobelco’s hybrid design group. If they work, the diesel-electric hybrids could boost fuel economy by 40% and cut carbon pol-lution by the same amount. Such technology would be a boon to fleet owners and contractors working in urban and highly regulated areas, such as California.
Fenoglio: We are the only one with working prototypes.
Unlike automotive hybrids, the engine does not shut off so that batteries can take over. The diesel runs at a constant speed of 2,200 rpm, regardless of external loads, while the batteries provide supplementary power. That saves fuel and cuts the engine size by 50%. Overall weight remains unchanged. Larger vehicles also are a target for hybridization.
Scientists are critical of diesel engines for emitting large amounts of carbon dioxide, smog and cancer-causing pollutants. Hybrid vehicles, combined with biofuels, would lessen the environmental impact, they say.
Fenoglio believes it is too early to tell how much money companies will be willing to spend on hybrids but he thinks that equipment producers should start addressing global warming today. Otherwise, “there is no tomorrow,” he said.
Also tilting its iron toward the future was SANY International, China’s biggest privately owned machinery producer. It bought the show’s largest outdoor display space and greeted attendees with a giant red carpet near the main entrance.
The Changsha-based manufacturer showcased an updated line of concrete pumps, graders and excavators costing 30% less and ready to ship in half the time of established brands. With equipment assembled from standard parts like Volvo truck chassis and Cummins engines, SANY salespeople were ready to cut deals with American firms.
Chinese equipment maker made a big impression.
Attendees reacted to the new global player with magnetic curiosity, not with the cool demeanor of previous tradeshows. Walking through the booth, Scott Schumacher, director of asset management for Superior, Colo.-based Key Equipment Finance, predicted that Chinese vendors—many of which are now catching up with current technology—will help keep global equipment prices low. “Chinese equipment is coming to the States, and it is something we are going to have to accept,” said Schumacher. “If the Chinese pay attention to product support, they’ll be a force,” added Woody Weld, president of Acme Lift Co., Phoenix.
Low prices now are trumping country of origin, which no longer is a turn-off to buyers. “When one of our customers needs a boom pump, they never ask us what kind of machine we have,” said Mark Schipper, president of San Benito Supply Co., a specialty contractor in Hollister, Calif. “I don’t see any negative.”
As Chinese vendors continue to dig into North America, the bargain-basement prices may inch up. Schipper said he recently asked SANY for a 50% discount on a concrete pump. His price turned out to be “a little extreme,” though, and was not accepted. Some Chinese producers still offer as much as 60% off regular equipment prices, buyers say.
Inside other exhibit spaces, some vendors were noticeably put off by the Asian invasion. High-level officials with pump manufacturers Schwing and Putzmeister declined comment on the impending price threat. But several salespeople griped that SANY delegates kept wandering in to take photographs.
In another corner of the show, power tool makers honed in on the ergonomics of anti-vibration hammers, while Oshkosh Truck Corp., the Wisconsin-based specialty vehicle manufacturer, announced it is adding side airbags on its front-discharge transit mixers.
Made by Lifeguard Technologies, Westfield, Ind., the airbag is similar to a seat-mounted unit on passenger cars. It deploys when a sensor detects an “unrecoverable” roll, said James Gould, Lifeguard account manager. The seat also drops several inches as a pretensioned belt tightens around the driver’s torso. This keeps the driver immobilized and prevents head injuries. All this happens in a quarter of a second. Oshkosh booth visitors got a heart-stopping live demonstration.
Rollovers easily cost operators $200,000 per event, according to the National Ready Mixed Concrete Association. In tests, the Rolltek airbag reduced head and neck injuries by 90%, said Gould. Lifeguard says it currently is in development talks with other truck makers.
Fiber-reinforced concrete is finding new uses.
Of course, concrete materials appeared in full flair. Some new types of synthetic fibers on display claimed to eliminate the need for reinforcing steel and reduce the amount of labor needed on a jobsite.
Performax, for one, is a replacement for welded-wire fabric, light-gauge steel and steel fiber in concrete slabs. Developed by Polymer Group Inc. (PGI), Kingman, Kan., it is a proprietary blend of synthetic resins that provide reinforcement for crack control, flexural toughness and shatter resistance.
The product is ideal in industrial floors, concrete pavement and commercial slab construction, said PGI’s Paul Schmidt. The company also offers fibers for precast concrete as a welded-wire-fabric replacement. The firm said it is pursuing accreditation from the U.S. Green Building Council.
Another patented fiber made its first major public appearance: “Bendable concrete” is an engineered cement composite that is 500 times more resistant to cracking and 40% lighter than traditional concrete. Tiny polyvinyl-alcohol fibers chemically bond to the fresh mix as it cures. The fiber can be blended into any type of concrete to replace glass fibers, rebar and wire mesh, but it also works along with steel to reduce concrete cover, said Michael D. Lepech, who helped develop the product at the University of Michigan. Pilot projects have bendable concrete to reduce expansion joints and seismic equipment in various bridge decks and high-rise buildings. Engineers think it also could be used to line tunnels and support railroad tracks.
The PVA fibers are produced by Japan-based Kuraray Co. Ltd. and sold in North America through Westerly, R.I.-based Nycon Inc. The installed cost is about double that of typical concrete, but Lepech said its long life and low maintenance makes it cheaper in the long run.
Building green was in most vendors’ sales pitches this year. Lepech sees sustainable benefits in PVA fibers, which are a by-product of petroleum processing. “We can replace about 75% of the virgin materials with these industrial wastes,” he said.