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THE WAVE OF THE FUTURE

Nov, 23 2004

THE WAVE OF THE FUTURE The Aggregate industry needs to take a hard look at itself. What are the big issues, and the ways we can focus and improve the future for the North American Aggregate Industry? Remember the companies that were so shortsighted, they missed entire market trend changes? It took most of them over 10 years to catch up, and by the time they did, a major market share had been lost to their competitors. IBM took the wrong road and watched Microsoft and Dell run past them during the personal computer revolution. Kodak blinked, and almost too late captured only a snapshot of the digital camera market. American car manufacturers were left in the dust, as the Japanese car industry ran over them. This included the 8 to 18 m.p.g. shift started by the oil/gasoline crunch, the ignoring of the safety and design requests from consumers which ultimately moved consumer buying power to the foreign manufacturers, and a mobility, comfort, and leisure trend change, as the station wagon was replaced by the SUV. The aggregate industry is missing their wave of the future. By focusing only on obtaining more mineral aggregates, they are ignoring the real solution to growing shortages. An entire new multi-billion dollar industry will be developed by those with the vision to meet the growing demand for lightweight aggregates, as well as fill in for shortages, with synthetics and their recycled material mixes. What company or industry can afford to miss that wave? The North American Aggregate producers cannot continue to produce the quantity of aggregate needed for the future. What's the macro picture? What happens if local governments put an additional tax on mineral aggregates? What does the general public, business, and government contractors perceive the aggregate industry will be in the future? Aggregates, needed to produce any concrete and asphalt product, are expected to be in increasingly short supply. The lack of these materials would cause the construction industry additional slow downs, and the building of fewer roads, bridges, homes, and office units. Industry, business, and the economy would suffer. There would be additional complex and long term problems, including environmental, transportation, and labor issues. Obviously, aggregate producers must obtain new quarry, sand, and gravel permits for future growth. Under the current aggregate availability, the industry cannot produce the increasing quantities at the 10% anticipated growth rate, nor the aggregate quantities expected to be needed by 2009. (USGS projections). The public perception of the aggregate industry today is that it is a “dirty industry”, it ruins the environment, and pollutes the air and water. The public outcry is: ‘do not put it in my back yard', and ‘everything you do causes environmental damage'. In fact, the past 10 years of the industry's history is one of striving to be a good friend to the environment. This industry is using the highest technology available for air and water pollution controls, and consistently looks for ways to improve in mitigating environmental damage at quarry operations. Aggregate, which the public takes for granted, is the backbone and building block of all economies, here and abroad. We simply cannot build anything without aggregate. No building, no economy. After that scary thought, let's address the first issue. The aggregate industry for many years has been recycling both concrete and asphalt by grinding and screening the product to re-introduce it as a secondary aggregate. This represents approximately 20% of all aggregate products. The aggregate industry is the only industry that has not marketed the increasing scope of their recycling efforts. Maybe they shouldn't keep the secret to themselves. The education of the public will be necessary for future growth and a legislative friendly environment. This industry is also one of the few industries that is improving yearly in the recycling of most of its waste, as well as recycling the waste of other industries. In the United States, since the mid 1990s, there have been fewer permits issued for sand and gravel pits and quarries. (USGS Mineral Industry Surveys- 2003). Obviously, this means there will be less quantity of traditional mineral aggregates (sand and gravel) available. As long as we have the ‘not in my back yard' and ‘too much damage' mentality, the industry will come under increasing resistance. What is the aggregate industry going to do to change those views, plus address the shortfall that may occur in the next decade? One of the answers is the introduction of additional synthetic aggregates into the marketplace. Synthetic aggregates are aggregates that combine various recycled waste materials. The Synthetics fall into three categories. The first group includes the ashes. This includes fly ash, non-cementitious, mine tailings, and slag. The process makes a light aggregate by pressing the material into pellets. The second group is Bio-waste. This process uses waste sewage and other waste materials, also pressing it into a pellet form. The third group mixes cement with fly ash (cementitious and/or non-cementitious), bottom ash, mine tailings, recycled plastics, and recycled glass. The combined materials are then pressed into a solid block. There are Wave of the Future lightweight synthetic aggregates and patents that meet ASTM 330-331 standards. Versatility includes high strength, multiple industry use, a full spectrum of weight combinations, incorporates recycled materials, and it can be cut, nailed, and screwed with ordinary tools. All of these processes have unique advantages over standard aggregates. Synthetics use waste materials currently dumped into landfills, and decreases the negative impact on the environment. They use less energy to produce the product. Some mineral based lightweight aggregates use heat in their process to make the lightweight aggregate, whereas the synthetic aggregates, for the most part, do not. The mineral based lightweight aggregates produce less air and water pollutants. The pellet varieties replace the same-size mineral based aggregate, but are limited in to one or two sizes. As a comparison, one synthetic can be crushed from a solid block to all the various sizes. Since both methods use a rock crusher, certain synthetics can be an adjunct or total replacement for the mineral base aggregates. The future is the high strength, lightweight, synthetic aggregate that can enhance or replace other lightweight aggregates currently used in multiple applications by the construction and agriculture industries. At the present time, the aggregate industry is using less than 1% of synthetic aggregates for replacement aggregate. The aggregate industry could be using up to 5 to 15% of these products as a replacement for the traditional mineral base aggregate. This would increase company profitability, decrease environmental impact, allow flexibility and a wider scope of projects, as well as increase public good will. The first and most important goal is to provide a greater quantity and variety of aggregates in the coming years. Synthetics will be either a partial or adjunct replacement of current mineral based aggregates. The second goal is to produce larger quantities of synthetic aggregate, which will lessen the both real and unfairly perceived environmental damage perceived by the public. Third, if mineral production is taxed, and higher prices levied on energy for the expanded shale's, clays, and Perlite, synthetics would become even more economically attractive. Additional benefits would become attractive. The increased cost of mineral based production would be offset or reduced by synthetics, including the lowering of the cost of production comparable to the current cost of mineral aggregate. England and Europe already experience expensive tax issues. In many states, such as California, New York, Nebraska, and Wyoming, there are tax credits for using recycled products. Either the ‘stick': taxation of quarries, or the ‘carrot': tax credits, will change the industry forever. Rising energy prices are expected to increase the cost of production. Transportation costs, based on weight, will favor the synthetics. The type of synthetic that can be produced or crushed at a currently operating plant, or built at any major project location, will be the most profitable. Tax credits and lower costs are expected to improve the corporate bottom line, as the further and increased use of recycled materials is mandated by local and national governments. The companies that embrace the new technologies, own the patents, and expand their synthetic aggregate business would be the ultimate winners. Synthetic aggregate development is the ideal way to open more doors of profitability, supply availability, and competitiveness, within an environmentally friendly framework. Future articles will discuss these key topics in more depth. By David Shulman, CEO ELITE Aggregates