Rock Products

DEC 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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Page 22 of 99 ROCKproducts • December 2018 • 21 In a continuation of last month's Quarry and Aggregates (Q&A) Forum, Terex Mineral Processing System's President Kieran Hegarty talked about various issues impacting the aggregates industry. Rock Products: So how's business? What is your take on the national economy and also on the construc- tion economy? Is business better today than last year? Are steel tariffs impacting you? Which international markets are hot for you? What do you think of New U.S.-Canada-Mexico trade deal? Hegarty: Terex Materials Processing is a high-performing segment within Terex Corp. with growth that is driven by global demand for our crushing and screening products, material han- dlers and broad line of environmental equipment. Our businesses continue to focus on introducing new products, and improvements to existing products, designed to address specific customer needs in these industries. We see the benefits in our increased sales, book- ings and backlog – illustrated in our Q3 results, where we delivered excellent performance across our portfolio of businesses, with sales of $295 million – 14 percent higher than last year. With 72 percent higher backlog, we expect to hit the ground running in 2019. As we buy steel in many forms, includ- ing raw steel and fabrications and indirectly in components, steel tariffs are of course impacting on us. The U.S. announcement of steel tariffs drove steel prices to levels not seen in many years – currently steel prices for the balance of 2018 are roughly 40 per- cent more than they were in the fourth quarter of 2017, when we set our 2018 prices. These added costs create unnecessary headwinds at a time when markets are trending well. While Terex is committed to continuously improving efficiency, managing costs, and when possible, protecting our customers from rising costs to help maximize the value and return on investment derived from our products – the impact of the rising cost of steel is too large and too sudden for us to absorb. We added a steel cost surcharge on our equipment to cover a portion of our cost increases – to remain separate and transparent from our base prices. If the price of steel normalizes, we will adjust or remove the surcharge. Trade is important to our industry and a contributor to how we deliver value to our customers. Since the creation of the North American Free Trade Agree- ment (NAFTA), Terex has benefited greatly from duty-free access to Canada and Mexico. As for the new U.S.-Cana- da-Mexico trade deal, while it is better than having no trade agreement at all, it will take time for the full impact of the new deal to be made clear. As a global manufacturer, we depend on trade to create markets for the products of our factories beyond the borders of the countries where those factories are located. Our industry is capital intensive – it takes major investment in plants and equipment to make the kinds of machinery that we produce. To get a good return in our capital-in- tensive business, you need access to bigger markets so that you can achieve the kind of scale that creates value for our customers. Restrictive trade poli- cies like tariffs impede on our ability to do that. We believe in free and fair trade for the health of our industry and the benefit of our customers and team members. RP: How is your business doing spe- cifically in the aggregates industry? Are producers actively investing in new equipment this year, or planning for future capital improvements? What problems are you solving for aggregates producers? Hegarty: The aggregates industry is thriving and creating an all-time high demand for our products. While our current range of crushers and screeners are performing well across all markets globally, we're very aware that markets change and we need to offer solutions to changing market needs. For example, we're seeing that plants are getting bigger, as well as more capable. Many quarry operators and contractors are looking to produce greater volumes of final aggregate product, with fewer machines, therefore lowering produc- tion cost per ton. An obvious gap in our brands' mobile plant range is in ultra- large crushers and screeners. We are working to fill this space and a couple of larger plant models, capable of pro- cessing 800 to 900 tonnes an hour of material depending on the feed, will hopefully be coming onto the market within the next 12 months. To help quarry owners better cope with bigger production levels, the move to bigger crushers and screeners ties in with our move to bigger and longer Terex MPS's Hegarty Talks Industry Issues Kieran Hegarty

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