Supply chain issues, inflation, and labor shortages have converged to drive the cost of construction materials up across the board. These factors are putting pressure on precast concrete producers, increasing production costs, and squeezing profit margins.
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According to the National Association of Home Builders in the U.S., materials prices increased 20.4% year over year and 33% since the start of March In addition, the World Bank predicts energy prices will rise over 50% in .
Despite the external forces driving costs higher, precast concrete producers have several opportunities to create efficiencies in their production and capitalize on new opportunities in the market for sustainable products. This article describes six ways producers can unlock more profits from their precast products:
Reducing production costs is one of the fastest ways to boost profitability. For precast concrete producers, this means reducing the use of their most expensive ingredient&#;cement. By replacing or reducing the quantity of cement required to produce quality precast concrete, producers can boost profitability significantly.
SCMs can act as a reliable replacement for cement in concrete. Studies and industry testing have proven that SCMs increase concrete&#;s strength over time to levels greater than traditional concrete mixes. The most common SCMs&#;fly ash, slag and silica fume&#;also have an added environmental benefit by sequestering post-industrial waste from coal and steel.
Recent developments, including COVID-19 disruptions, raw material shortages, and the Clean Air Act, mean SCMs may not be a long-term sustainable option. In some markets, however, SCMs are still plentiful and cheap.
Portland-limestone cement (PLC)&#;also known as Type 1L cement&#;is a blended cement with a higher limestone content. It has been widely adopted by concrete producers around the world as it works, measures, and performs the same as standard cement, but with a reduction in cement and, therefore, a lower carbon footprint.
PLC replaces up to 85% of the clinker used in regular concrete with limestone, resulting in up to 10% less CO2 emissions. It&#;s suitable for all applications, and when blended with SCMs, PLC performs similarly to regular Portland cement.
The concrete industry is facing a growing demand for sustainability. Up to 50% of commercial building developers are looking for more sustainable solutions, and suppliers across the industry are feeling the pressure to lower their carbon footprint.
This growing demand for greener building materials is partly a response to the threat of climate change as various governmental bodies and industries are working to reduce the CO2 produced in construction:
Producers that take the lead on adopting innovations to create greener precast products will be better prepared for new regulations and can position sustainability as a competitive advantage to compete for greater market share. They also have an opportunity to charge a premium for low carbon products, helping to improve profit margins.
Carbon mineralization technology, such as CarbonCure Precast, works by injecting recycled carbon dioxide into fresh concrete during mixing. The injected CO2 undergoes a chemical reaction and turns into a mineral, becoming permanently sequestered in the concrete. CO2 emissions that were once in the atmosphere are locked away permanently in the concrete.
Because it also maintains strength, carbon mineralization allows for the quantity of cement in mixes to be reduced.
This CO2 utilization in concrete is not only sustainable&#;it makes good business sense. Analysts say that CO2 mineralization has the potential to become a USD $800 billion global industry by the year as demand for greener construction materials increases.
CarbonCure is a retrofit technology that injects CO&#; into the concrete like an admixture, which is then mineralized within the concrete. The CarbonCure Precast system includes a Valve Box that connects a CO&#; storage tank to the manufacturing equipment and a Control Box that monitors the system in real-time. The easiest way to conceptualize it is to think about CO&#; as another admixture. The technology is integrated with the existing batch operation system in the same way.
CarbonCure&#;s technology has been used by a range of precast manufacturers to produce concrete products used in buildings and parking garages, and by prestressed manufacturers that have produced wall panels, decking systems and general commercial load-bearing.
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Concrete made with recycled concrete aggregates is often thought to be weaker than concrete made with natural (virgin) aggregates as the recycled concrete aggregates can be less dense, have a higher water absorption and a lower crushing value than natural aggregates. It can also have a significantly increased drying shrinkage and chloride ion diffusion coefficient, creating durability concerns.
Recent tests have shown, however, that the use of recycled aggregates in concrete blocks could give a compressive strength similar to that of blocks manufactured without any recycled aggregates. Using recycled aggregates in the manufacture of concrete blocks without any natural aggregates is not economical though, since a relatively high quantity of cement is necessary to obtain the required compressive strength.
Treatment of recycled concrete aggregates with CO2 results in the mineralization of the CO2, improving the properties of the aggregates.
Precast concrete producers can boost the profitability of their businesses by adopting strategies to attract and retain talent. Some producers are noting that the adoption of innovative technology and processes is having a positive impact on hiring.
These innovations are helping to reinvigorate the way people see the construction industry as a whole and can attract younger workers to a market that&#;s facing a severe labor shortage. Further, by adopting sustainable innovations, concrete producers can attract environmentally-conscious millennial and generation Z candidates.
The concrete industry is one of the oldest industries in the world because it has consistently risen to meet new challenges head on and evolved to meet the demands of society throughout the centuries.
The challenges it faces today are no greater than any it has faced in the past, yet the innovations and technical advances in the industry are better than ever. By adopting these innovations, producers can remain profitable for generations to come.
To learn more about how you can boost your company&#;s profitability with sustainable technology, download our eBook: 3 Ways Precast Concrete Producers Can Profit From Sustainability.
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