Rising demand not being seen in all quarries
First publishedin Aggregates Business Europe
Claire Symes Editor of Aggregates Business Europe
Through my work I get the opportunity to visit many different countries and companies and I love that variety - each site is essentially engaged in the same business of aggregate production, yet are all different. Nonetheless, the same questions and discussions have been repeated wherever I have been this year - how is the quarrying market in your country and do you see it improving this year? In the UK, the Mineral Products Association has reported rising demand in the second quarter but has said that this does not represent a return to sustained growth. The organisation has said the rise is mainly due to repair work needed by the road network following the harsh winter.
The impact of the cold weather earlier this year is repeated in the first half financial reports that have been flooding into my inbox over the last few months. Many companies have said that gains were made in the second quarter but have not been enough to offset the slowing of the market caused by the prolonged bad weather in the early months of the year.
But it is not all doom and gloom and many are predicting that the market will continue to show the rise seen in the second quarter in the second half of the year. There is some optimism that the market will turn a corner in 2011 but this is very much dependant on continued government investment in infrastructure and demand for residential and commercial construction.
The companies that have seen better growth this year are ones with a diversified business often with an interest in more than one country. You may think this would mean just the major players that are doing well, but there are also smaller family-owned businesses that are achieving this.
I had the chance to meet one such entrepreneur over the summer when I travelled to Athens to meet with Theofilos Tsokanis who started in the construction materials business at the tender age of seven. Since then he has grown and expanded the business, which while not unaffected by the global recession, is proving resilient due to the diverse nature of the operation.
Tsokanis not only operates quarries in several countries across Southern Europe but he also manages sites for other quarrying companies, runs a shipping operation and a construction arm. Unlike many quarry operators, Tsokanis has continued to invest in new equipment fleets as he is confident that demand will return and believes now is the time to invest so that he is in the best position when the upturn comes. In the meantime he is finding new applications to ensure his machines are kept busy.
In researching stories for the next issue of ABE I have visited several other family-owned operations and they are also changing their approach in order to cope with the changed business environment. Two I visited recognise that their staff have essential skills and rather than just cut jobs they have reduced production hours and focused on training to try and retain employees.
The key message which I am getting from quarry operators large and small is that demand will return - maybe not to 2007 levels - but it will come back, it is just a matter of time. The companies that will do well are those that are working to make sure their operations are fit for the new business environment while they have the time to review it.