P&Q: It seems like the industry is having a pretty solid year, with producers making aggregate pricing gains and volumes being in a healthy position. How would you assess where producers across the industry are today?
ZELNAK: We have the kind of pricing that people are reporting because of long-term consolidation that’s been underway. We also have it because people demand a higher quality, which is not something they demanded at an earlier point in time.
The window really has shut now. If you go back 20 years and looked at the demographics of a particular county in North Carolina, it’s grown dramatically and developed. Because of that, you can’t open any more quarries in that area. That’s why pricing is where it is. It’s supply and demand. It’s that simple.
PFOHL: We hear so much about the infrastructure [bill] but, quite frankly, I was really disappointed with it. It was just another five-year program, although everybody seems to think we’re going to get something out of it.
A lot of the country still hasn’t recovered from the last recession. We’re doing great along [Interstate] 85 and [Interstate] 40, but if we go two counties out little has changed. Are we getting the road maintenance money that we need for the secondary system? I don’t see it anywhere. We have one pile of big jobs after another that soak up a big part of the budget for North Carolina and other states, and the rest of the system is not really getting taken care of.
ZELNAK: The size of the projects has gotten a lot bigger in North Carolina.
P&Q: Let’s talk about the new business dynamic between you two. Whereas you were at one time business rivals as producers, the dynamic has shifted with Steve being on the equipment and parts supply side of the industry – serving Sunrock as a partner at Sykes Supply. What’s it like operating with each other’s companies in this different fashion?
PFOHL: When he called me up and told me he was doing this, I thought it was a great idea. Steve knows I’m operationally focused. I’m not an engineer, but I do a lot of our engineering.
When it comes to maintenance, we like to plan for events. And it’s all about the relationship with those you do business with. If they haven’t got it – and sometimes they don’t – it becomes ‘when can you get it?’
One thing Caterpillar always did was provide the parts in 24 or 48 hours. That’s what helped Caterpillar’s business over their competitors because you could get the parts.
So, I call what [Steve] sells the consumables – and the consumables are going to continue to be consumed. It doesn’t matter if it’s a robot running it, or you and I run it. Someone is going to need parts, service and backup.
ZELNAK: He said the keyword: ‘service.’ We’re a small company competing with the big boys out there. We have to do something special. Well, we do it through service primarily. We’ll bust our rear ends to get you what you need when you need it, just as quickly as we can.
People appreciate that, because you can go to the big boys and they’ve got so much business that you’re not that important to them, Well, these guys (Sunrock) are really important to us.
We’re always trying to find things to take to our customers to offer them the right product – a really good product – and do it at a bit better price than they could get somewhere else. So, we’re trying to give them good pricing, timely service to go with that, and the right products.
PFOHL: If you have a 1,000-tph plant, it’s probably $25 million to $30 million today. If a head pulley or a speed reducer on the conveyor that feeds the surge pile goes off, these cost an operation thousands of dollars a minute. It’s OK if we have stone in the stockpile, but it does run out. So, the fact of the matter ends up being do you have the things that you need and somebody who wants to partner with you to be sure that you do.
