Pit & Quarry, December 2013

ROUNDTABLE CONFERENCE Session two YANIK One to 2 percent growth per year if that seems to be the new industry normal Have you adapted to this new normal and what are your expectations for 2014 OERTON Were in three areas One is in Louisiana where were a little more tied to residential Another is in Tennessee where theres probably a little more related to large army bases next to Oerton us We kind of see whats going on with government spending there Then in Pennsylvania we do a fair bit of work in the Utica shale play Were able to see three different areas but why dont I just focus on the first two Were certainly seeing a lot of our customers which are the ready mix customers in that area becoming more positive Were seeing an increase in the economy Its not like it was two years ago where everybody was wondering where the bottom is I think there are some positive signs in these areas Were seeing investment by some of our customers which means theyre not as concerned about the market continuing to go south People are probably cautiously optimistic COKER I would say cautiously optimistic is a good phrase to use I talk to producers all over the country and thats what Im hearing from different sections I think a lot of producers feel like theyve hit the bottom but theyre starting to see some small incremental improvements If youre in Texas youve seen a lot of energy and a lot of infrastructure In California theyre starting to see some improvements YANIK How is the frac sand market currently COKER There was a little bit of a gold rush mentality when prices were extremely high Everybody jumped in and you had a lot of people who got in late and are now commissioning plants or recently commissioned plants A number were put on the backburner and werent brought into full development So youve seen a pretty significant price decline for the different grades of sand Your established producers are doing better than the recent entrants ALEXANDER We have some properties with pretty extensive reserves and at the time of acquiring them it was a hot commodity Now its lukewarm at best I think theres a lot of concern about whats going to happen in terms of long term demand The fundamentals for the frac sand market are still strong There was a big boom a few years ago and everybody got on the bandwagon Now its cooled off Alexander COKER Your most efficient producers are going to be the ones that survive I mean if a price is really high everybody can make money But when prices come down your efficient producers are going to be the ones that last REDDIN Really for the last 30 years when capital started being attracted aggregates the height of the investment preference hierarchy had aggregates at the top Cement consolidated very quickly to where it was a couple handfuls of people by the 1980s so we didnt see much activity there Aggregates were at the top And the industry liked that because of the high barriers to entry PARTICIPANTS Session Two Moderator Kevin Yanik Pit Quarry Jason Adams Continental Equipment Co Scott Alexander Bedrock Resource Partners Jeff Carlisle Douglas Manufacturing Jean Casey Florida Rope Supply Dennis Coker Natural Resource Partners Steve Fair W S Tyler John Garrison Terex MPS Scott Lanker Bedrock Resources LLC Mark Musselman Cemex Rex Nealis White Rock Quarries Colin Oerton VantaCore George Reddin FMI Rick Robinson Sandvik David Thompson Cemex Russell Walton BTI Sean Weisiger Conn Weld Steve Williams Titan America Coker Reddin 28 PIT QUARRY December 2013 www pitandquarry com