Milling For Profit

"There was basically one person in Raleigh who had a milling machine,"recalls Rick Royals. "That person was very busy and became more busy, to the point that whenever we needed him, it was very difficult to even get scheduled. The problem grew to the point that I made a decision that we had to get a machine of our own, which we did in November of 2003."

The initial purchase price was a little intimidating. "It is basically in the $300,000 range for a 4-foot machine,"says Royals. "A local Marini rep flew me to Downingtown, PA, and I looked at one of their machines. I was impressed with the total organization."A Marini MP 1300, with a cut width of 4 feet 3 inches, was the first purchase.

This addition had a major impact on the company. The mix of projects has changed. "We went away from the concrete portion of the business. Everything went from 50/50 to about 80-percent asphalt and 20-percent concrete,"says Royals. The milling machine has also helped grow the business. Revenues jumped from $1.6 million in 2003 to $3.6 million in 2004.

Today, Royals Contracting has three milling machines in operation -another Marini MP 1300 was added to the fleet in November and an MP 2100, with a 6-foot 3-inch cut width, is on rental purchase. Despite this investment, the company has no plans to shift its focus. "We are not interested in becoming a full-service milling contractor,"says Royals.

The milling machines offer productivity that would be impossible to meet with the traditional method of repairing pavement. "If you had a shopping center with 500 tons of patchwork to be done, for me to go out there with the best crew I have, it used to take five days to do,"says Royals. "It was very labor intensive and very expensive. You saw cut and then you excavate."The addition of the milling machines made a drastic change. "Now I can go out and do 500 tons of milling and patching in two days."

The cost per hour has also been reduced. "I can mill and patch somewhere in the vicinity of $25 to $30 per ton cheaper than I could [perform the task] the old way, plus we have a much better recyclable product,"says Royals.

The milling machines also increase safety when working on secondary roads. Royals explains that when the Department of Transportation paves older 20-foot-wide secondary roads, it often wants to widen them to 24 feet. "It used to be you would go down with a motor grader and a backhoe, excavate the shoulder 2 feet and put in full-depth asphalt anywhere from 6 to 10 inches deep,"says Royals. "That was very slow and time consuming. It is very dangerous to put people out there with cars whizzing by at 55 mph."

The State of North Carolina has even spec'd milling on some projects vs. the backhoe and grader approach due to the increased efficiency. "You get so much more done in a day's time and you are eliminating a lot of equipment on the job, which are a risk to the travelling public,"says Royals.

Own the process

Lojac Enterprises, Lebanon, TN, is a paving company that has its own asphalt plants and performs grading work on select highway projects. "We do mostly government work -interstates, highways and streets,"says Tim Murphy, who runs the company's paving and milling operations.

Lojac Enterprises uses three Roadtec milling machines in its operation -an RX-60, RX-900 and RX-500. Murphy explains that owning these milling machines allows Lojac to better manage its paving operations. "Where you have to start milling big roadways and paving right behind, you need to be in charge of both ends,"says Murphy. "To me, it works a lot better if you have control of your milling."

This allows you complete control that you do not have if you subcontract the work. "If the other guy breaks down, you only partially know where he stands,"explains Murphy. By having ownership of the entire process you can take corrective actions quickly. "I can move ahead and do something to get it back moving."

Utilization on these mills is usually pretty solid from early Spring until Thanksgiving. The outlook for this year is looking promising, as well. "They have a good work load right now -it is definitely solid until July 4th,"says Murphy. While the milling machines are mainly for in-house use, the company does perform selective milling for three or four other local contractors. "We don't go all over the Southeast,"says Murphy.