As the largest paving company operating in the Tampa, FL market without an asphalt plant, Pete Hernandez, president of Tampa Pavement Constructors Inc., decided the time was right to make the investment to own his own plant.
"We had become Tampa's largest FOB (Freight Onboard) paving company without a plant and we wanted to sustain our volume, and hopefully position ourselves for future growth," says Hernandez, who started the business eight years ago. "Our decision was based primarily on the fact that we couldn't always get the volume we needed when we needed it. It was a cost issue of having trucks (both company-owned and independent drivers) waiting for a load. If the wait was too long, we often had to send them to another plant (asphalt producer) and both situations caused delays for our paving crews."
Hernandez says Tampa Pavement Constructors focuses on a niche in the paving market, by serving private residential and commercial customers, and industrial customers, along with small city and county projects, and small DOT right-away projects. Along with sustaining the current volume for those customers, Hernandez also hopes the new plant investment will allow his company to take on larger city and county projects.
"We carefully thought out the decision to own our own plant based on our current volume of approximately 200,000 tons a year and the fact that owning a plant would also allow us to increase the volume of work by going after projects we couldn't deliver in the past," Hernandez says.
Selecting a plant
Hernandez evaluated several different plants and decided the ADM (Asphalt Drum Mixers Inc.) Milemaker MM225 Asphalt Plant best served the current and future needs of Tampa Pavement Constructors.
"I like ADM's counterflow/post mixer technology and the plant footprint fit the land we purchased for our production operation," he says. "The site permit allows us to produce a maximum of 500,000 tons annually, and selecting a plant that fit the space and allows us to increase our production requirements in the future was important. This plant will allow us to produce between 400,000 and 500,000 tons annually, and that will meet our growth objectives for some time, while still staying within the permit restrictions."
While the initial upfront cost of purchasing land and a new plant will take time to recoup, it has increased the contractor's flexibility to respond to mix requirements without relying on other producers.
"Now we're in control of the mix designs we need to satisfy our customers, and we have control of the costs to deliver that mix to the projects we're constructing," Hernandez says. "We no longer have to wait for our truckers to receive a load at another producer's plant. So there's an immediate value in being able to control the trucking and pricing of delivering mix to a project. In the past it wasn't uncommon for us to send a truck to XYZ plant and that driver wouldn't leave that plant for 2 to 2 1/2 hours because he had to wait in line to receive a load. Now, when a truck shows up at our plant, it's loaded and sent out to the project. So, there is a definite advantage of owning a plant to supply the jobs you're working on."
But Hernandez is quick to point out that spending $2.5 million on a plant and another couple million to purchase and develop land to accommodate an asphalt production facility is a substantial commitment for any contractor to make.
"We realized we had the volume to justify that kind of investment, and we also knew it would diversify our operation and give us the ability to increase our market potential," he notes. "With the new plant and our location, we now have a much larger market share potential to pursue. We're close to our aggregate source (9 miles from the Port of Tampa) and we're within 5 miles of all three major interstates that serve the area. So, we're now in a position to serve a seven county market."