By Sara Geer and Sue McCraven
The path from concept to completion for expanding or building a precast plant is filled with countless decisions both big and small. Each choice – from the overall budget allotted for the project to the design of the building – can affect the future of a business.
Ranking the importance of those decisions to fit every situation would be futile as the priorities are different at every plant. But shared here are lessons learned and surprises discovered from owners and operators who have already expanded their business – a process precasters may face now or in the future.
Decision to expand
Stephanie Loud, owner and operator of Mountain West Precast in Brigham, Utah, recently built a new plant. Shawn Thomas and Kirk Rouse, brothers and partners of Leesburg Concrete Co. in Leesburg, Florida, also recently expanded their business. Both precasters said the need for an on-site batch plant led them to grow their operations.
“People in our business do a lot of batching,” Loud said. “Rather than using ready mix truck delivery as we had in the past, we wanted to be able to batch our own concrete in-house. But I was new to the whole process.”
Loud said she felt this move was an important step in Mountain West Precast’s business progression since the company was already adding its own admixtures into trucks and working with SCC. She wanted to take more control of quality.
“We have 11 acres and with the new 75 ft by 150 ft plant – plus other buildings – we’ll be able to put together the whole package,” Loud said.
For Leesburg, adding a batch plant allowed the company to expand into other product lines since it had outgrown plant capacity. Shawn’s father, Lannie Thomas, started the plant 30 years ago and it was his decision to expand and keep the business alive.
“The leading decision to expand was based on our 25-year history at the time – the step, ramps and rails that we were producing,” Thomas said. “We outgrew that capacity and for about five years searched extensively on what type of batch plant we would use.”
Both Loud and Thomas gave similar advice when looking back at their decisions to expand or build new production facilities: closely monitor expenses and pay with cash.
Loud said that despite not having prior experience assessing construction bids, she discovered some holes in the overlap between the electrical and batch plant contractor. The bid for the complete plant installation did not include the electrical. She said it was just inexperience on their part for not understanding the scope of work for each contractor.
“Because we found items that were not covered in the bid, we went back to the bank,” Loud said. “This was a significant increase in cost.”
Thomas and Rouse found out that the best way to expand is paying with cash. When the agreement to build an expansion was signed in December 2006, they certainly did not see the crash of the economy that was headed their way. The decision to carry minimum debt in the business was the main reason Leesburg was able to expand.
“Going out and borrowing the money is the hardest hurdle to overcome without a guaranteed return on money,” said Thomas. “It’s a very large risk.”
Rouse said the irony of the situation was that the expansion actually allowed the business to grow and diversify at the perfect time. “Had we not built the plant and been sitting in the old plant when the market dived, we would not have had the option to grow our business,” Rouse said.
One more piece of advice Loud gave for building a new plant is precasters should not be alarmed when the completion date of a project is changed or extended.
“It’s going to take longer than you think,” she said. “We started construction in 2013 and thought the construction would be completed by now but it’s running nine months longer than expected. It should be up and running by late July or early August.”
Along with lessons learned, each owner and operator also discovered some surprises during building – both good and bad.Loud said even though the engineering and soil test holes were completed before construction, she still discovered an unexpected vein of peat moss underneath the selected location for the new building. Her advice is to “watch out for geotechnical engineering issues.” Fixing the problem required taking out all the peat moss to a depth of 20 ft and replacing it with clean fill in some areas and concrete in other areas in order to support the footings.
However, a pleasant surprise Loud came across was working with the city officials of Brigham, Utah, to acquire the permits for the construction site. The Brigham City’s Economic Development Department was cooperative and professional.
“I had worked with a different city previously and found we just couldn’t make them happy.” Loud said. “So, I am very grateful we had such a pleasant and helpful relationship – in fact, two of the people there worked with precasters before and were familiar with our issues.”
Thomas said the staff’s can-do attitude was the pleasant surprise he saw once Leesburg’s expansion was completed. Without the batch plant, the company would not have had the opportunity to seek other sources of income with new products such as floor-to-floor stairs, precast modular buildings, architectural panels and precast boardwalks.
“Without this batch plant I would not have made those other three product lines that are now making up better than a good portion of our business,” Thomas said.
Yet despite the good and bad experiences shared with building or expanding a plant, Loud, Thomas and Rouse all expressed their happiness having gone through the process. Thomas said the expansion helped his company to develop into an NPCA certified plant and expand its professional network.
“Since we did take a risk, we are able to produce new products and reach out to people that we met and worked with through NPCA,” Thomas said. “Networking is vital for anybody in this industry.”
Loud said she does not want to discourage anyone from considering expanding or building a new plant. Now that her plant is complete, she is happy with the results.
“If I had all the pieces to the puzzle up front, I would have called the project nearly perfect,” Loud said. “But even with the stumbling blocks, I am glad I made the move to take more control of my operations.”
Sara Geer is NPCA’s internal communication and web manager, and is managing editor of Precast Inc.
Sue McCraven, NPCA technical consultant and Precast Inc. technical editor, is a civil and environmental engineer.