The concrete industry is a great business to be in—but it’s not without its challenges.
Rising material and labor costs are cutting into profit margins; increased competition from other building materials are eroding market share, and social and political pressure is forcing concrete producers to invest in more sustainable production practices.
Despite these significant challenges, concrete producers remain resilient by taking action to ensure their businesses stay profitable and productive. This blog post outlines three places to start:
- Reduce concrete production costs by reducing cement quantities;
- Create process efficiencies by investing in technology and retaining talent;
- Adopt sustainable production methods to compete for market share.
For a deeper dive, download our eBook, Secrets to Boosting Your Concrete’s Profitability.
1. Reduce concrete production costs by reducing cement quantities
Reducing production costs is one of the fastest ways to boost profitability. For concrete producers, this means reducing the use of their most expensive ingredient — cement. By replacing or reducing the quantity of cement required to produce quality concrete, producers can boost profitability significantly.
A concrete producer’s reputation relies on the quality and durability of its product so there is some risk involved in altering production methods. Fortunately, there are ways to mitigate that risk by using tried-and-tested material technologies and mix designs.
One way is to optimize mix designs with Supplementary Cementitious Materials (SCMs) like fly ash, a by-product of the coal industry that costs significantly less than cement but maintains the same quality. Studies have proven that SCMs actually increase the strength of concrete over time to levels greater than that of traditional concrete mixes.
Another way to reduce production costs is to adopt innovative carbon utilization technologies like CarbonCure, which injects recycled CO₂ into fresh concrete during mixing. Once injected, the CO₂ undergoes a chemical reaction where it transforms into a mineral, improving the compressive strength of the concrete. This leads to mix design adjustments to accommodate for the added CO₂ and increase in strength; cement content can be reduced while maintaining the concrete’s strength and performance.
2. Create process efficiencies by investing in technology and retaining talent
Concrete producers can boost the profitability of their businesses by using technology to improve delivery and quality control processes and by adopting strategies to attract and retain talent.
Many producers are already using dispatch and quality control software like Command Alkon or Jonel to unite data from the quotation phase to job scheduling, order entry, resource planning, material planning, mixing software, dispatch, and delivery. The intelligence garnered from these tools enable delivery and quality control process improvements that can significantly impact a producer’s bottom line and help reduce waste.
Some producers are noting that the adoption of innovative technology and processes is having a positive impact on hiring. These innovations are helping to reinvigorate the way people see the construction industry as a whole and can attract younger workers to a market that’s facing a severe labor shortage. Further, by adopting sustainable innovations, concrete producers can attract environmentally-conscious millennial and generation Z candidates.
3. Adopt sustainable production methods to compete for market share
Facing the challenges of rising costs, the public pressure for sustainable building materials, and changes to regulation favoring green building practices, the concrete industry is undergoing a transformation.
Smart concrete producers are strategically planning for the future, looking to new innovations so they can effectively reclaim market share and position sustainability as a competitive advantage.
And it’s not a moment too soon. The mass timber construction (MTC) industry has already gained traction in many key building markets over the past few years — taking market share from concrete producers. There’s a perception in the market that wood’s inherent ability to store carbon makes it a more sustainable building choice. However, recent research proves only a small amount (around 15 percent) of the carbon originally stored in a living, standing tree is sequestered in the final wood product. And while wood in buildings retains a small amount of carbon, wood in landfills actually emits methane which has a Global Warming Potential 28-36 times greater than CO₂.
By training salespeople to handle sustainability objections, producers can reclaim market share lost to wood in recent times and promote how concrete is superior — it’s more resilient to natural disasters, it lasts longer, it’s local (most concrete is used within a small radius of where it is produced), and it can continuously sequester carbon throughout the lifetime of the structure.
Producers can also gain new market share by adopting technologies like the CarbonCure Technology to offer sustainable concrete products to a market that’s hungry for solutions. When concrete producers inject CO₂ into concrete using CarbonCure, CO₂ emissions that were once in the atmosphere are used to produce concrete that is more sustainable. The strength gain from the added CO₂ enables producers to reduce a percentage of cementitious content in select mix designs, while still maintaining strength requirements.
Further, due to the chemical reaction that occurs between the CO₂ and the concrete mix, the CO₂ becomes a mineral and therefore is permanently embedded within the concrete, never to be re-released into the atmosphere. This CO₂ utilization in concrete is not only sustainable — it makes good business sense. Analysts say it has the potential to become a $400 billion global industry by the year 2030.
Producers that are not thinking about developing sustainable concrete mixes will miss out on this business opportunity and lose significant market share to competitors, as more industry associations and government bodies set standards for carbon-reducing building practices.
The concrete industry is one of the oldest industries in the world because it has continued to adapt and innovate to meet the demands of society throughout the centuries.
The challenges it faces today are no greater than any it has faced in the past, yet the innovations are transformative and will help producers to remain profitable for generations to come.