Day-to-Day Paving

Indiana's Triangle Asphalt Paving thrives in move from HMA producer/paver to paving contractor.

Triangle Asphalt Paving's edge in the market is that brothers Steve (left) and John Day are owners who work in the field.
Triangle Asphalt Paving's edge in the market is that brothers Steve (left) and John Day are owners who work in the field.

Sometimes the lineage of the company is so direct you can draw a straight line from its start right to where is stands today. Triangle Asphalt Paving, Lebanon, IN, is a great example.

Leaton Day, grandfather to current president Steve Day, was a highway superintendent for Indiana's Boone County, and he had a solid background in engineering and road construction. His son, Jack Day, attended Purdue University but decided he'd rather work in the field, so he began working for a Richmond, IN, contractor. That contractor used to drive 90 miles to do paving work in Lebanon, and Jack Day got to thinking. In 1961 he quit his job in Richmond and started his own paving company in Lebanon with two dump trucks and an asphalt distributor.

"In 1961 my dad did anything, but he was doing basically small work throughout the area, primarily patching and chip seal," Steve Day says. "But he did anything he could including trucking and driveways. Then in 1964 he bought a paver and started paving streets in Lebanon and it just took off from there."

He brought along two partners (hence "Triangle" Asphalt), bought out one partner in 1968 and the other in 1978. Steve started working for the company in 1975 and Steve's brother, John, came on board in 1980.

For quite a while Triangle Asphalt operated its own asphalt plants, but they don't anymore. They began producing their own hot mix in 1965 with a used plant they refurbished. In 1970, Triangle upgraded that plant, added a second plant in 1978, and until 1980 ran three paving crews, two plants, and 20 dump trucks. And they needed all that because they did a lot of state work.

"In 1980 when interest rates hit 21% we scaled everything back," Steve says. "The business goes in cycles, just like we're in now, and one thing I learned is don't get ahead of yourself when it's good so you can handle things when it goes down."

So they scaled back the paving and ran both plants successfully until 1990 when they sold one of the two plants, and in 1999 they sold the other HMA plant. "We weren't set up for recycling and we knew we were going to have to be soon, so that would have meant a big investment," Steve says. HMA became a purchased material from Milestone Contractors LP of Indianapolis. Milestone set up a modern batch tower /mini drum combo plant south of Lebanon, one of several they have in the central Indiana area. Triangle then refocused its business, leaving highway work behind in favor of private work and paving on low-volume roads.

Triangle Asphalt: 2009
So today's Triangle Asphalt Paving is a family-owned-and-operated business, with Steve as president; John as vice president; and sister, Elizabeth "Libby" Lewis runs the office.

Out of the Lebanon office (a former trucking company building with a 4,700-sq.-ft. shop heated with waste oil from the equipment) the family actually runs two companies: Triangle Asphalt and also S & J Construction, a trucking firm, which operates seven dump trucks. Triangle Asphalt has 16 employees; S & J has seven.

Virtually all of the contractor's work is generated by paving (55%) and aggregate work (35%), with the remaining 10% a mix of excavation and concrete work. Triangle also offers sealcoating, striping, sign installation and milling, all of which it subs out. Work is 60% commercial and 40% city and county, a huge shift from when work for Boone County used to be the contractor's bread and butter. "For years, if you drove down an interstate in Boone County we laid it," John says.

Working within a 50-mile radius of Lebanon "so there's always someplace else to go if we're rained out," Triangle Asphalt does roughly 75 paving jobs each year over the 170 or so revenue-generating days available to it in this part of the country. Steve says distance has become a factor, or at least a consideration, as the price of fuel has increased, but the goal is still to be able to work as far away as 50 miles. He says that in 2008 Triangle on occasion turned down a bid depending on where the plant was in relation to the job and depending on which other contractors might be bidding it. "The hauling costs often dictate how far away we can pave," Steve says. "With margins so tight we can't pave profitably if we have to haul too far."

He says the contractor spends a lot of time bidding and estimating commercial work with a success rate of 20%, adding that Triangle Asphalt has a lot of repeat customers on the commercial end. "Do we get every job we bid with them? No, but we often get last look from repeat customers," he says. "It works the same way with some of our competitors but that's okay."

Experience = quality
Steve Day says it's the company's experience and devotion to job quality that has enabled the firm to be successful, and he sees the two as very closely related.

"Triangle Asphalt specializes in two things: stone placement and grading for the base, and asphalt paving," he says. Steve does the subgrade work and pushes the stone himself, and brother John handles all the paving. "We can place stone pretty quickly, mainly because I've put in 30 years doing it and I know how to do it." And the impact is that Triangle Asphalt's aggregate placement cost is below that of the competition - because Steve Day is doing it. "I often get asked, 'Why don't you get someone to put the stone in for you?' Well, that's our edge. And besides, I love it," he says. "The only way I'll warranty work is if we do the stone and the subgrade on the job."

And the reason for that?

"We're perfectionists, both John and I," Steve says. "That is passed down through the crews and the entire organization."

It also helps that they are the owners, and the owners are out there on the job.

"People like us because I sign the contract and I'm out there putting down the stone," Steve says. "We run a tight ship with the owner on the site. If we run into a problem the food chain is short. The foreman doesn't have to go find one of us to find out how to get it solved. I'm right there, or John's right there and we just solve it.

"Plus, I have a good knowledge of what's in the bid because I've signed it. So if there's a decision to be made out there and it's going to cost us something I know if there's room in the bid to absorb that cost.

"We're very hands-on, and in this competitive market you almost have to be," Steve says. "Producers have the edge because the cost of material is lower for them than for us and because they are able to spread their profit out not only over bigger jobs with higher volumes but also over the mix they sell to other contractors, like us. I think the edge that has kept us going and kept us successful is my brother and I are out in the field."

Finding, training, retaining employees
And the Days think the way to keep the quality up is by having an experienced crew and operation.

"We have a good group of guys who have been with us who know what they're doing. It's not rocket science, but when you run a good drug testing program and you train them right you'll have good results. But it all starts with finding the right people."

John gives an example of how important it is to have a knowledgeable employee, in this case a screed operator, on the job. "It's easy to overrun on a job and that's the killer," he says. "That's where the experience comes in on the back of the paver. If you've got a 600-ton project out there and you're trying to get in and out in one day, the difference in making money and losing money is 1/8-in. too much mix. I don't care who they are in this business, the people who turn those screws out there are worth their weight in gold because they can make it or break it."

So Triangle Asphalt works hard to find and retain employees, offering wages and benefits as good as or better than the union, including health insurance and a retirement plan. The result is a core group of people who have been with the firm from 6 to 20 years, and some of the laborers have been with the company for as many as 16 years.

Employees include two outside salespeople, one inside salesperson, two paving crews with three laborers and three operators in each crew. Equipment on a crew includes two rollers and one paver. Though Triangle only has two paving crews, it does have four pavers and it juggles the two crews around to match the equipment to the job.

"We try to do anything and everything with each crew," he says. "Crews aren't specialized in certain things."

Because Triangle Asphalt has more equipment than crews, it has the luxury of not only planning ahead but moving equipment ahead of where it's needed. So one employee has the job of moving equipment all day. "That's his job. We're always moving equipment from one job to another to stay ahead," Day says. "Most jobs are two to four days long. I'd like to get more of the two- or three-month jobs but we don't have too many of those.

"Having trainable employees is the secret, but it's hard to get someone who wants to work," he says. "For unskilled labor we hire young people; for skilled labor we hire older people because they like to work and they know how to work. Good people in this type of business like it; they like the hands-on work."

Equipment and maintenance
Day makes it a point to emphasize the role equipment and equipment maintenance play in Triangle Asphalt's success.

"We gear our equipment to commercial work but we still run Class 1 pavers because we think they do a better job," John says. "They're not as maneuverable as the smaller class pavers, but we use them because we think the result is a better job."

Using a bigger paver on small jobs also enables Triangle to cover more area in less time, making crews more efficient and enabling them to keep costs down and get on to the next job. So among its pavers are three Blaw-Knox units including a PF-3200 paver they refurbished, all teamed with seven rollers from Volvo and Hyster. Other equipment includes: two small cart path pavers, a backhoe, grader, skid-steer loader, road widener, and seven haul trucks.

"We perform most equipment maintenance in-house and that helps keep us competitive," John says. "Good preventive maintenance means more production and longer life, and that's part of our edge over our competitors. The big boys with six or seven crews and new equipment all the time have better cash flow, but we can get an awful lot of work and make a decent profit the way we run this business.

"We probably don't have the latest, greatest technology but we have the experience, and there's no substitute for experience," Steve says.

Read about Triangle Asphalt Paving's biggest issues in the online exclusive article "3 Biggest Concerns for Triangle Asphalt Paving".