Story and photos by Ron Hyink
Boom! Crash! Rumble!
That’s not a neighborhood garage band you hear in the background; they are the sounds of the past decade’s housing industry. First came the housing boom, followed suddenly and decisively by its crash. After several years of meager existence, or nonexistence if you will, it is slowly rumbling back to life.
John Ruga and Robert Shanaman, owners of Northeast Precast LLC in Millville, N.J., had barely enough time to enjoy the profitability of the housing boom as a precast foundation wall manufacturer before the bottom dropped out, forcing them to leap onto other precast products sooner than they had anticipated to keep from sinking.
Fortunately John had been taught the value of a strong work ethic at an early age. When the economy knocked him down, rather than floundering about and crying uncle, he rolled over and got back on his feet. “My father instilled in us that the worst thing we could ever tell him was that it can’t be done,” he said. “He taught us every step of the way: Don’t ever give up. You’ll never see what’s at the top of the mountain if you stop a hundred feet short.”
A Mountain to Climb
As in a tale of two economies, it was the best of times and it was the worst of times. Before the storm clouds of the economy blew in, it was a bright and sunny day for home builders. John had just started in the precast concrete industry as he realigned himself from the custom homebuilding industry to precast foundation walls. His was a small company in a big market. “We really did have good timing starting with the housing boom, where you almost couldn’t do any wrong,” said John. “Everybody was just as busy as they could be in the housing industry.”
John started in the precast business with a Superior Walls franchise, first as an installer and then as a manufacturer. His initial investment was in trailers and cranes so that he could haul the foundations from factories in Pennsylvania and New York and install them in South Jersey.
As business picked up, one of John’s bigger investments was a 100-ton, all-terrain Liebherr crane. “Most people who knew me thought I’d lost my mind,” said John, “and she probably wasn’t far behind,” referring to his wife, Lorie, the consummate multitasking office manager whom he frequently praises for her support in his business endeavors. “I wanted a crane that could do everything,” he said, explaining that he was involved in other businesses that required the large crane, such as setting modular homes and cell phone towers. “So for the Superior Walls, the crane was way oversized but allowed me to go out and do other work.”
Having built up the business over a few short years, he was able to invest in his own manufacturing plant. “We purchased the land in May 2003,” said John. It was raw land – 20 acres of trees and low-lying swamp – so he started to clear it in July that year. “We built the building ourselves, we poured all the footings and we were open Dec. 10, 2003 – our very first day of production.”
At the time, the new plant housed 10 employees – who incidentally had no prior precast experience – in 25,000 sq ft of production space, which soon doubled in size. “We didn’t have anybody here with any experience – just a lot of good employees who were dedicated and worked hard,” said John. But the lack of experience had no lasting effect. “Our business took off so much in 2004, and in 2005 we added on the second half of the building.” That put the plant at 50,000 sq ft for about 95 employees.
John and Robert invested heavily in equipment, land, a building, and a foundation wall franchise for which they were pouring nearly 100% of their concrete. And then the bottom emptied out from under the housing industry suddenly and completely. Orders slowed to a trickle, and they had to lay off almost half of their employees. Cranes, trailers, forms and casting beds were no longer at maximum production and sat idle most of the time. There was no longer any money available from financial institutions – only bills to be paid to them. They had to do something quickly in order to survive.
Foundation Walls to Commercial Walls to MSE Walls
John had been working in commercial construction in a family business when he ventured out on his own in 1998 to work in home building, additions and renovations under the name of J Ruga Custom Builders. “That’s when I got into foundation work, but it was all poured-in-place foundations,” he said. “Back then it would take me two weeks to do a foundation,” which included footings, inspections and other time killers. Then one day in 2000 when he was working at one of his job sites, everything changed: Precast concrete revealed a better way for him.
“I saw some walls go by on a trailer, and then a crane,” said John. “This was about 10 in the morning. I said, ‘I’m going to go look at that at the end of the day,’” but when he arrived on site at dark nothing was there but the basement. “It’s done! The trailer’s gone, the crane’s gone, and I was still tying rebar. I didn’t even have an inspection for my footing.”
The walls were manufactured by Superior Walls of America, so John contacted them right away and discovered that anybody could sell them into New Jersey, but nobody had bought the franchise. “It was open territory at the time,” said Lorie, “so we decided to purchase the rights to South Jersey to protect our investment in time and equipment if we were successful.”
And so John began to set foundation walls after driving at least 4½ hours one-way on weekends to pick up a single load. “The first year, I think we sold only five foundations – I was still doing house building,” he said. “The second year we sold 18 foundations while still building some houses. And then the third year, we sold 86 foundations. That’s when we started to think about building a plant here.”
In 2003, they built the new plant and changed the company’s name to Superior Walls of South Jersey. “We poured our first walls here in December 2003,” said Lorie.
“North Jersey was still an open territory, and because of our growth, Superior Walls sold us that portion,” John continued, explaining that he once again changed the company name in 2005, this time to Superior Walls of New Jersey.
By that time, plant production consisted of nearly 100% foundation walls – just as the economy was about to take a dive and bring an end to the housing market. “When things started to go south, we attempted to scale back but just couldn’t scale back fast enough,” said John. He had to let some of the equipment go, followed reluctantly by letting nearly half the employees go. “There’s no question that we would have gone out of business in a matter of time. So we just worked extremely hard and put everything we had personally on the line.”
The diversification into other precast products began with commercial walls for churches, schools and small warehouses. But those were small jobs and not enough to sustain the plant. In a move to offer larger walls for larger jobs, John installed a 15-ton overhead crane in the plant. “That definitely helped us get through,” he said.
Other precast offerings were soon to follow, including custom stormwater structures, custom bridge pieces, caps for piers along the Atlantic coast, and bird-prevention blocks that are installed in the piers to keep birds from building nests. We also sold precast blocks that serve as ballasts where the ground cannot be augered for anchors, such as for solar arrays and custom generator pads for power stations.
With a growing number of custom products unrelated to walls, John finally changed the name of the company to Northeast Precast. “People thought we were drywallers, or they thought we hung wallpaper,” he said. “So we wanted to let everybody know that if it was made out of precast concrete, we could do it. And we didn’t want to limit ourselves to just New Jersey.”
Ever marching forward, John’s most recent investment was in forms for MSE walls. With a reputation for quality products, a competitive bid and a little getting-to-know-you face time with the people at George Harms Construction Co., he got started on solid ground with his new venture.
The Bridges of Burlington County
Interchange 6 on the New Jersey Turnpike is shaping up nicely, thanks in part to precast concrete. The four-year widening program will add additional lanes in each direction that will allow car and truck traffic to have separate lanes. “To accommodate all that, we have to redo all the exit and entrance ramps into Interchange 6,” said Edward Panuska, vice president of Project Management with George Harms Construction Co. “We’ll put in eight new steel structures with new ramps, and the approaches for most of those ramps are borne by MSE walls.”
When the project is complete, there will be 24 MSE walls – or about 182,000 sq ft – cast by Northeast Precast. “It is a major part of the project,” said Edward, but the real significance is that it marks Northeast Precast’s debut into the MSE wall business. “This is our first contract with Northeast, so there was some hesitation,” added Edward, “and we had to get to know each other and get a feel for each other, and off we went.”
It was not something John took lightly. “We knew they were sticking their necks out a little to go with this, and we had to produce,” he said. “It’s been a tremendous learning curve for us, but we couldn’t have picked a better contractor to get started with.”
In addition to the MSE walls, Northeast is supplying all the precast traffic barrier. “And not only the barrier, but he’s also doing precast light standards and light poles,” added Edward. The barrier and light poles are unique in that all the electrical conduits are embedded – another custom product by Northeast. “He’s been able to do all that, which is not the norm for some of these precasters, who will just do the standard piece.”
It helped that Northeast was the low bidder, but that was not George Harms’ only concern. “If he wasn’t able to produce, it would obviously stop the job in no time,” said Edward. “It was very close coordination with John and the engineer. We had to agree on schedules, we had to agree on priority.” Edward was also impressed with the enclosed casting facilities at Northeast Precast that allowed production to continue when weather was a factor for other manufacturers. “He’s well ahead of us with casting, so if there are any schedule impacts, unless something drastic goes wrong, it’s certainly not going to be by Northeast,” he said.
“Since this first contract with George Harms – which we will always be thankful for – we have contracted an additional 500,000 sq ft of MSE walls on the New Jersey Turnpike, Garden State Parkway and our first job in Delaware, which has approximately 167,000 sq ft of MSE walls,” said John. “We have continued to expand into the DOT market while still maintaining a high level of service and commitment to our customers.”
Putting a face to the name has gained some yardage for Northeast Precast, not only with George Harms but also with other firms. A free lunch can usually attract a small group to get your company name in front of the right people – but to get them to listen is a challenge in itself. “When we first go in, they’re a little reserved,” said John. “You’re not sure how it’s going to go. But then they’re intrigued when we start showing them pictures of projects that are ongoing or we have completed.”
These Lunch and Learn sessions for engineering firms can make a bold statement about who you are and what you can do for them. “We encourage these architectural engineers to talk to our clients,” said John. “We have a good reputation, and people know how hard we work – and that is one of the trademarks of our company, how we’ll go the extra mile.”
All the strategies that John and company brought to bear have helped them survive the housing crash – and in fact grow in the face of economic collapse. Being quick to invest in new products while on the verge of bankruptcy paid off for John.
Northeast Precast’s product line originally began with Superior Walls foundations, which it continues to manufacture today.
“We struggled to get by,” said John, adding that it all started to pay off in late 2010 and early 2011. “Halfway through 2011, our commercial business really started to pick up.” For the first time in years, he had a backlog of work, including the Superior Walls contracts.
John is quick to credit his partner Robert Shanaman and employees. “Without the people we have, we’d be dead in the water,” he said. “They accept the challenges we put before them, and a lot of that is self-motivated – I mean, we put up a few challenges and they take it a step further than what we were envisioning.”
Despite not having precast experience, the employees stepped up to learn the business, and then despite the economic situation that nearly put them out of business, they remained dedicated and stuck to the course. Could that positive work ethic have rubbed off from their leader? “It’s a credit to my father,” said John. “He drilled in us that there’s nothing impossible unless you don’t want to attempt it.”
Ron Hyink is NPCA’s managing editor.