EQUIPMENT
Astec
will be in the US.
“If you look at that +15% annual
growth figure we put out, our
goal is +10% organic and +5%
through acquisitions. The organic
component would be things like
changing products to meet market
needs, or coming up with products
we don’t have yet to have a better
fit in other countries.”
Acquisitions are a fundamental
part of how Astec has grown over
the years following its foundation
in 1972, and this has seen it move
into other areas away from the
initial asphalt plant business (the
name ‘Astec’ comes from ‘Asphalt
Technology’). However, Mr Brock
said any new additions would be
likely to tie-in with its existing
businesses.
“I think we’re always going to be
tied into the three areas we’re in
now – infrastructure, energy and
mining. We’ll stay close to that.
We might consider an acquisition
outside of those, but it would have
to be fairly sizeable and have great
management, because we are quite
decentralised and we wouldn’t want
to jump into an area where we’re
not already present,” he said.
In terms of expanding its
footprint, the company has
licensing agreements in place to
serve India and China, and has
its own subsidiaries in Australia,
Brazil, Canada, Germany and
South Africa, and according to
Mr Brock, these locations are all
ripe for expansion. For example,
He said, “We are investing heavily
in Brazil right now, and that is a
pretty clear signal. If that goes well,
it could be expanded into a sales
operation.”
Domestic prospects
As far as the company’s US business
is concerned, Mr Brock said there
were some promising signs in a
flat market. “The aggregates group
has performed very well. Typically
L
ast year US-based Astec
Industries, which makes
equipment for the mining,
infrastructure and energy industries
had revenues of US$ 936 million.
It has set itself the task of doubling
that over the next five years – so
about +15% growth per year – and
moving from the current 60:40
so split between domestic and
international business to 50:50.
The headline growth figure is
ambitious enough, but these figures
imply an enormous international
expansion to take revenues from
the US$ 364 million achieved in
2012 to somewhere north of
US$ 900 million.
That task will fall in a large part
to Ben Brock, who was named
as successor to his father and
company founder Dr J. Don Brock
earlier in the year. The succession
plan is due to take effect before
the end of 2013, and it will see
current CEO Dr Brock become
the company’s executive chairman,
with Ben Brock taking over as
CEO.
Astec Industries owns more than
a dozen individual brands in the
asphalt, road building, aggregates
and underground construction
businesses. It has a decentralised
structure, where each of these
businesses and brands stands on its
own to a large extent, with its own
management running them.
So questions about how to grow
internationally do not just include
How? and Where? but also What?
Mr Brock said, “We are working
on an asphalt plant design that
would fit international markets
a bit better than what we have at
the moment and the aggregate
group is coming out with some
smaller crushers. You often have
to change what you do a little bit,
of course, to meet local codes and
requirements.
“Of course we continue to look
at acquisitions, and not all of them
Astec wants to double in size over the next five years and expand its international business so it accounts
for half of its revenues. CEO-designate Ben Brock told
Chris Sleight
how it plans to make that journey.
sector, the lack of secure funding
for the country’s roads (see this
month’s Regional Report) is a bone
of contention.
“The Federal Highways
programme in the US represents
about 50% of the hot mix market,
but it is 90% of the hope, and that
Bill is not there yet. At the moment
it is the private sector that is
driving what growth there is,” said
Mr Brock.
iC
International ambitions
that will start and 12 to 18 months
later the asphalt business will
come through. We haven’t seen
that yet, but we see pockets where
it is trying to come back. But the
rain here has been incredible this
year. I was with a customer in
Chicago before 4
th
July, and he had
not worked a full week this year
because of the weather!”
And of course, for a company
so focussed on the road building
Astec Industries
CEO-designate,
Ben Brock.
61
september 2013
international
construction
