Anyone ever invested in a concrete batch plant?

I have an opportunity to invest in a batch plant in a growing suburb of Houston.

All jokes aside (and some were well done), I'd assume if the right person is running the operation it could be a very good investment.

Do you have any specific questions? You might get some more useful feedback that way.

62strat said:

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If hypothetically you lost all your money, would you be in a slump?

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There's a slush fund.

Marauder Blue 6 said:

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62strat said:

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If hypothetically you lost all your money, would you be in a slump?

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There's a slush fund.

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You'd better hope so. You'd hate to pour so much into it only to have to turn around and float it.

I would want to know their ten largest customers in terms of sales and look into the likelihood those customers will continue with the company.

Don't invest in what you don't know.

This is investing 101.

redaszag99 said:

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Anyone ever invested in a concrete batch plant?

I have an opportunity to invest in a batch plant in a growing suburb of Houston.

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Do it.

If it's in a "growing suburb", peak value might be right now. You may be buying at the peak. As home construction in the area is completed, demand will fall. After buildout of your area, another company will probably build a new plant closer to the next expansion area. You can still compete, but your profits will go down.

For me to invest, I'd want the plant to be "mobile" like the ones TxDOT uses for the roadway projects. You can lease property for 10-20 years, and then move the plant to the next hot spot when the lease is up. To me, that's the best way to invest in a concrete plant.

agnerd said:

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If it's in a "growing suburb", peak value might be right now. You may be buying at the peak. As home construction in the area is completed, demand will fall. After buildout of your area, another company will probably build a new plant closer to the next expansion area. You can still compete, but your profits will go down.

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My company buys 50-100kcy of concrete a year (none of it for houses or DOT work), and none of it comes from a plant in a 'growing suburb'.

The plants are centrally/strategically located around the denver metro, with good highway access.

Basically 3 companies run this town - Burnco, Holcim and Martin Marietta, all of which have a large presence in TX.

However, I don't think the OP is talking about a plant of a company of these magnitudes. I'm assuming it's more like Joe Blow's Concrete... but honestly I don't know what kind of customer buys from those types of suppliers.

Who will own the land?
I have designed and permitted a couple of these. Like many thing, it's a no brainer in an expanding economy.
There is also a significant real-estate deal on the back end. Is the site on a major roadway? Is there public water at the site? Enough for fire protection? Is the tract reasonably shaped? I recommend a min of 330' depth and 3 acres. 5 acres is better. Will it be a legal lot?
Take care of all of these things up front and you will have a $1.5-$2m asset growth (today's money) in 20 years.

Last time we ordered some for a shop building, it was brought by some of those new trucks that mix as it pumps out. All components kept separate until it is coming out the chute and mixed in the last few feet. No time limit from the time of mixing at the plant with this method, all the wash up is limited to the last few feet of the chute. Pretty neat tech and seemed more effecient but perhaps they require a lot more maintenance. Mix ratios adjusted on the fly by the driver with a console.

Volumetric mixers are nice for small quantities, but they are sloooow. Trying to do anything more than ~50 yards becomes painful.

Too many grey areas for me to invest in a venture like that.