Rock Products

NOV 2018

Rock Products is the aggregates industry's leading source for market analysis and technology solutions, delivering critical content focusing on aggregates-processing equipment; operational efficiencies; management best practices; comprehensive market

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40 • ROCK products • November 2018 on existing sites. While the reports of demand for classic sand processing equipment, tanks and screws, declining has not proven true, we are seeing an increase in the popularity of sand plants with dewatering screens and cyclones which produce higher yields and drier product which can be sold. 5. Have you noticed changes over the past year in the way aggregates producers evaluate equipment and consider it for purchase? Are buying decisions made more on the corporate side or more on the production side? Is used equipment getting a closer look right now? Are you eval- uating your online presence to enhance sales? LININGER: Buying demographics have changed some over the last year. Privately held companies were more consis- tent in buying during the recession, and they started buying across the board more consistently coming out of the reces- sion. Larger, publically held companies were a little slower to start buying consistently again. We are in a business climate now where both are buying equipment and buying it often. Regardless of the size of the company, most are in a position now where one can take advantage of the advancements in equipment safety, efficiency and production capabilities. Pur- chasing decisions that had, in some cases, been pulled away from the local divisions and back to corporate, now seem to be back at the local level. I think this is good for the industry, as it puts more of an emphasis on buying the right piece of equipment, focusing on local parts and service support, local manufacturing and the relationship with local dealers who, ultimately, can have a large impact on the success of what customers have purchased. With lead times stretching out across the equipment industry as a whole, I don't see as much of a price difference between new and well-kept, used equipment as we did just a few years ago. Twenty years ago, one would advertise used equip- ment in a local publication that may have had a distribution of 35,000 copies throughout the market. Today, when one advertises online to the same market, it is also seen around the country and around the world. I think this is particularly true with manufacturers whose customers believe they make quality equipment. The customer knows the reputation of the brand, the kind of quality they can expect, and they are willing to buy equipment based on that. GARRISON: Many corporate purchasing teams are a part of the process, but producers often have a team of engineering or process related people that help make the equipment rec- ommendations. I'd say that there is certainly more technical and applications review work done to make decisions versus just the best price. Used equipment was popular when the market was down. It was actually hard to find decent used gear. But many producers are looking at new equipment and plants with the stronger market. We evaluate our web presence monthly. With a healthy market and extreme product growth at Superior, visits to our web channels have also boomed! It's fun to watch. We're plan- ning to launch a series of new web-related materials before ConExpo-Con/Agg 2020. CISZCZON: I have found that the final buying decisions are still being made on the corporate side for capital expendi- tures but the production side has a significant say in the final decision. We are always evaluating and updating our online presence as that will continue to be an important buying factor more and more as time goes on. MEHTA: It is a straight case of Return On Investment. If the production goes up and demand of new equipment can be met with cash flow with ROI, there is little hesitation to buy new equipment. If the cash flow is tight, leasing may be another option. Our experience indicate that both play inte- gral part in decision making, with their valued inputs. Yes, of course, used equipment is getting a closer look. If it makes business sense and meets their requirement, they do. Yes, we do have a big online presence to promote the brand and hence indirect sales. ROY: We have observed that the demand for used equipment has been growing in recent years, as a strategy to lower total cost of ownership. To address this demand, we have cre- ated a program – Volvo Certified Used – to ensure that the used machines have been thoroughly inspected to a uniform standard by our dealers, eliminating the "guess work" for potential customers. We've opened the first Volvo Certified Used center facility in Las Vegas and are partnering with other dealers to open more in the future. The latest purchase trends show us that brick-and-mortar business are no longer enough for our aggregates custom- ers. They are increasingly looking for replacement parts on the Internet, aiming for cost and time-savings, and for online information on machines and parts. We've been working with our dealers on strengthening our services on the web to help our customers with purchasing, servicing and maintaining their equipment while providing a superior experience. KRAUSE: We have quietly seen a real change in the buying demographics in many areas of our industry. I call this our Amazon effect. Buyers are waiting longer to make their pur- chase, want to do more of the research themselves, expect quick deliveries, and may settle for a different brand if they can't get it from their first choice. Rather than worrying about how the product might perform 15 to 20 years down the road, a five-year view is really long term. Part of this might also be due to needing to show quicker cost savings to acquire the capital from a corporate office. Buying decisions are definitely Q&A Forum

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