Builders Hope New Cement Plant Will Ease Delays Rising Costs
Written by Samantha Joseph on May 13, 2004
By Samantha Joseph
Titan America hopes a new $225 million cement plant scheduled to open next month in Medley will ease delays and rising costs dogging the construction industry.
Operational problems at its 50-year-old plant in Medley cost the company millions of dollars last month and contributed to a cement shortage that is slowing Florida builders.
"I don’t know that we will ever make up what we’ve lost," said Hardy Johnson, president of Florida business for Titan.
Titan, owner of the Tarmac and other brands, lost millions when it had to slow down operations last month to repair recurring equipment breakdowns at its Pennsuco Cement Mill. Repeated repairs to its kiln, which produces the 3,000-degree heat needed to process limestone into cement, set the company back three days each time.
At full capacity, the plant supplied 950,000 tons of cement annually – about 10% of the state’s total. Last month, its production scheduled dropped from six days a week to four, cutting output 30%.
"The big problem is that they are the major supplier in the area," said Supermix president and CEO Pepe Cancio. "The old plant broke down two or three times in the last three weeks. At the same time, importers have been very low on their inventory."
Titan’s operational troubles contributed to a cement shortage that has delayed building projects and hiked real estate prices and construction expenses.
Its cutbacks combined with heavy construction in China to exacerbate the issue. The Asian country is expected to consume nearly half of the global supply of cement this year. Responding to China’s demand, freight carriers have raised shipping prices and limited service to other countries.
"All of a sudden, people realize that nothing is built in the state of Florida that doesn’t involve concrete," said Mr. Johnson.
Titan’s new plant has been under construction for 18 months. It is expected to produce 1.8 million tons of cement annually – twice the capacity of its predecessor.
Local builders say they expect the new plant to help alleviate the concrete shortage in about two months.
Even with a larger, more efficient plant that could reduce production costs for Titan, it would be limited to how quickly it could catch up to demand.
The nature of construction work requires that most of it be done during daylight hours, making it difficult for a company to make up for lost time by adding late shifts.
Also, Florida law mandates that truck drivers work no more than 70 hours in a week. "We can’t work them around the clock for safety reasons and because they need to be with their families," said Mr. Johnson. "There are limiting factors, but we’re going to do our very best to take care of our customers and to supply their needs."
Lennar Corp. is two weeks behind schedule on 400 homes under construction in the county. "Obviously, this impacts our ability to start these homes and complete them on time," said President Anthony Seijas.
KM Construction Co. president Brad Meltzer said his company is without 80% of the cement it needs. KM is set to continue work next week on Bay Lofts and pour a roof concrete slab for the residential project.
"It’s a matter of us being able to get the raw material to the site on time," Mr. Meltzer said. "We’re in queue to get our ration of concrete."