Episode 71: A Breakdown of Concrete and its Future with Rich Szecsy

Episode 71 January 25, 2023 00:18:18
Episode 71: A Breakdown of Concrete and its Future with Rich Szecsy
The Quit Getting Screwed Construction Podcast
Episode 71: A Breakdown of Concrete and its Future with Rich Szecsy

Jan 25 2023 | 00:18:18


Show Notes

Everyone wants to know what the future has in store for concrete, how technology plays a part in it, and what the industry workforce looks like. Today Karalynn sits down with Executive Vice President of Alamo Concrete, Rich Szecsy, at World of Concrete for a live podcast.

This episode is sure to educate and keep you up to date when it comes to everything concrete related. Be sure to tune in to catch Rich's expert insight and some laughs.


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Check out our website www.thecromeenslawfirm.com to learn more about what we do.

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Episode Transcript

Speaker 0 00:00:00 Hey guys, this is Carolyn Chroming. Welcome back to the Quickening Screwed Podcast. We have another episode for from the Round of World of Concrete. And today I have with me an industry expert, Rick Satchi, the Executive Vice President of Alamo Concrete. Hey Rick. Speaker 1 00:00:13 Hey, thanks for having me. Appreciate it. Been looking forward to this long time. And here at World of Concrete, this is definitely one of the places people have talked about stopping by, so I'm glad I'm here. Awesome, Speaker 0 00:00:22 Thank you so much. Uh, so before we dive into talking about what the industry looks like for 23 Sure. And other topics, tell us a little bit about yourself and how you got to where Speaker 1 00:00:29 You are. Sure. I've spent 25 years in the business and, uh, as I like to say, I've made multiple consecutive bad decisions with my education and got undergraduate, masters, PhD, mba, too many degrees for my mother to count, but she's very proud and I went straight to the industry. Most people with that, uh, pedigree would go to academics. I went straight to the industry and have spent the last 25 years in the ready mix, concrete aggregates and cement industry. Um, on the operations side, technical side, I've worked overseas, so, and now I'm back in, uh, Texas and San Antonio working for a global cement company. Speaker 0 00:01:02 Awesome. That's amazing. So let's go ahead and dive in. Sure. Uh, let's start with what did, what does tech in concrete look like? Speaker 1 00:01:11 Great question because this is probably one of the, and I'm gonna use a big broad term here. One of the sexiest times to be in concrete with technology, uh, two different areas. First is on what I would call the back officer administrative site, the ability and speed for us to link things together. When you order concrete and it's delivered, somebody now can press a button on the job site and be invoiced within 60 seconds. Wow. So now imagine the old thing of triplicate tickets. I gotta hang this, I've got this copy, I've got this copy that's gotta be couriered, it's gotta be processed, can't. Now you have that technology where I can see, yes, I've received it on a phone and get an email that just sends me an influence. Speaker 0 00:01:53 So the drivers have tablets. Oh, and it's all it, so they can't be lost. Correct. Speaker 1 00:01:58 The picture can't be lost. Can't be lost, can't be lost. It's got all the information on it. QR code for anybody else who wants to see it. And if I knew an attorney, she might be so inclined to like, well, what else do you include on there in terms of terms and conditions, warranties and guarantees that you can't fit on the back of a small delivery tank? Gotcha. Speaker 0 00:02:15 That's Speaker 1 00:02:16 Pretty amazing. Go to the other side on the operations side here at World Concrete, you'll see this as well. First is our ability to know what's in the truck when it's happening. I can give you slumps, airs, temperature, water added in-transit in process from sensors delivered to my phone. And I can tell you, oh, three trucks are coming with slump. It's this, this and this crazy technology. And finally cutting edge, absolute blowing everything up is 3D printing Speaker 0 00:02:45 Really? So Speaker 1 00:02:46 How, what's called additive manufacturing, but we're gonna call it 3D printing. We've probably seen 3D printers with plastic and they build the little things. And I do it, and it's very dangerous for an engineer to have a 3D printer, <laugh>, but 3D printing of concrete of homes of structures, really Absolutely cutting edge stuff. There's half a dozen manufacturers here at the show. This is crazy for pushing the bounds of technology. Imagine constructing the home with three people on a computer. Speaker 0 00:03:15 So what that, what does that look like on the job site? Did they get pieces to Speaker 1 00:03:18 Assemble or imagine just a giant hose uhhuh that comes out that's connected to a, a digitized structure, Uhhuh and just moves and it's extruding concrete uhhuh as it goes, stacking it up as you go vertically. Really? And you've just built a house in 36 hours. Yeah. <laugh> amazing. Cutting edge technology. Awesome. Very, very sexy. And then two weeks ago, uh, two weeks ago, there was a report issued by MIT about Roman Concord. Everybody knows about that. It lasts forever. Okay. It's been there 2000 years. What created, they came out with a report that said this is what caused it leak floor now to 2023. And there were products that do the same thing with nano silica technology. Crazy stuff. Speaker 0 00:04:01 So I've Speaker 1 00:04:02 Been What does that mean? Well, so imagine, um, you always see the, the movies about, um, these robots at microscopic levels that build things. Yes. Nano silica particles use silica at a microscopic level to literally heal cracks in concrete Speaker 0 00:04:18 Wow. Technology. But like, even if it cracks it and heal itself. Yes. That's, Speaker 1 00:04:22 That's unbelievable kind of thing. So 25 years ago, these are unheard of Of course, yes. I'm a va, it's like sci-fi, it's like sci-fi. If you would've told me this 25 years ago, I would've said, what sci-fi movie did you watch? But also don't forget the 25 years ago, if I would've told you I could take a piece of plastic and stick it into a brick wall and punch some numbers and money comes out, you would've told me I'm crazy. Speaker 0 00:04:44 True <laugh>. Very happening stuff. So yes, I know you're on your boots on the ground in the day-to-day operation, what do you think 2023 is gonna look like? Speaker 1 00:04:54 Okay, 2023. I think we're post pandemic. Um, I think we've still got supply chain issues. I think we're gonna continue to have those pressures, but we also have migration issues. And by that I mean I'm not talking about US border, I'm talking about domestic migration of moving from certain states to other states. So Texas is a great one. Um, and I'll just give you that as an example. Texas has its population is growing by 1 million people per year. 1 million people, let's take certain things in uh, in Texas, right? So over 20 years, what does that mean? 20 million people, Dallas, Fort Worth, Houston, San Antonio, Austin and the Valley are your six biggest concentrations of people. Current population is 20 million. Speaker 0 00:05:41 We're gonna double. Speaker 1 00:05:42 Yes. So every year I have to nibble away at that. So even if I think on a national basis, things are going to be what I call flat, any hiccup that I miss is not gonna be, Hey, we missed that huge demand. It's gonna go the other way. A lower thing. Depressed not the right word, but recession maybe. Gotcha. Short. Um, I still have to build schools, roads for the million people that have just moved here in our population. That's an incredible demand that's been placed upon us. It puts demands on supply chain, it puts demand on those. And for our products in our industry, where do the rocks come from? They come out of the ground. Same thing with the sand. I got a weird of quar. I had somebody ask me the other day, can't you just move the quarry <laugh>? Speaker 1 00:06:30 No. So these are all challenges we have. Plus I've got more cities developing. Uh, take Dallas Fort Worth for example, 57 municipalities with construction curfews. How do I build something when I only have 12 hours a day? Uhhuh, I'll give you one last data point there. Jobs, everybody always talks about jobs, everybody always talks about skilled labor. And we are an industry that provides skilled labor jobs. Do you know that you can make a hundred thousand dollars a year driving a ready mix truck? Yeah. But how do you convince somebody to come into that profession when you say you can only work so many hours a day? Not just the trucks but all the other ones. Uh, okay. Real challenges for us. So I think 2023 I would see from an economic standpoint, it's flat. It has the potential to go a little softer. Um, but I think the demand for our products is gonna continue to be there. Cuz Texas as an engine is massive. And I've always told people Texas has a problem economically, we got bigger issues. Yeah, absolutely. Speaker 0 00:07:30 Because especially if we all these people are moving here, we should still be building. Speaker 1 00:07:34 Oh my God. We have to, is the Speaker 0 00:07:36 Base of everything Speaker 1 00:07:36 We build, uh, second most consumed product in the world. Speaker 0 00:07:39 So, um, supply chain issues. Yeah. Okay. So what does that look like for this year coming up and kind of what caused that? And is can it be corrected in the future? Speaker 1 00:07:50 So, great question. Let me answer it. I'm gonna look backwards from the answer. As an engineer would. So first in any supply chain, I gotta have people, which means, and I have a short, a small, a decreasing labor pool. Average age of a CDL driver is 57 years old and getting older. How many people do you know that go into high school and say, you know what, I really want to drive a truck. Now we did a poor job of telling them you can make a hundred thousand dollars a year doing it. Exactly. But there's not a lot of people want to go into that profession. And if you go into plumbing, electrical, uh, carpentry, by the time you're old enough to get a cdl, which is a federal government regulation, you've, your peers are three years into their career. They're on their way to becoming a master carpenter or electrician plumber. Speaker 0 00:08:33 How about what, what is the age range from a Speaker 1 00:08:36 CD for a cdl? Gotta be 21 years old. Okay, Speaker 0 00:08:38 Gotcha. So they've already started when they were 18, Speaker 1 00:08:40 Correct. Now, uh, in the pandemic, the federal government tried to pass, push that down to 18. But we still have that issue. It's 20 more. So then the second thing is, once I have the people, I've gotta put 'em in something, which is the truck truck manufacturers have been backed up on supply chain for two years. Are they gonna catch up this year? Absolutely not. They're still in, they're talking 20, 24, 20 25 before they think they can get their supply up. So I'm short drivers, short on trucks. So now let's go back to the raw materials. Now if it's a domestic raw material, say a rock or sand, I may have access to those cause I can control that production. But if I'm importing, I'm importing rock. If I'm on the coastal region, importing cement give you a great statistic here. Cement as it's transported around the globe is transported on ships. Speaker 1 00:09:30 Those ships are sold out through next October with their supplies. So if you say, Hey, I've got an extra amount of bags of this, I wanna put on a boat, shipp, you're not gonna find one. So is anything gonna fix this? Yeah, we can, domestically in the US everything is governed by regulations. You want to change something about supply chain, look at your regulations. Most of them are prohibited. And let's go back to an earlier point I made about, uh, curfews. Uhhuh <affirmative>. That's a supply chain constraint. Gotcha. Would you like to build something faster? Give me more hours in the day to build it? You know, who sets that? Local venues <laugh>. I, I'm amazed at everybody who says, um, have you ever been in traffic somewhere and you said, uh, why can't they finish this construction on this road? Most cases it's a curfew. Speaker 0 00:10:19 Really. What other, is there another glaring thing that sticks out that would be on the supply chain side that would, that's really affecting Speaker 1 00:10:26 Things. Um, fuel is the other one. Fuel is the other one. So, uh, as long as there's gonna be a short supply of gas, and I don't wanna say anything too political about that, but if you want prices to be lower on something, make something more plentiful. Absolutely. And so all of a sudden I have to, I've got fuel surcharges on products that come into me. I have to charge a fuel surcharge on things I deliver. So by the time it gets to that person that B2B to B2C fuel, surcharge fuel, fuel, fuel, and all of a sudden I'm here paying $5 for a bottle of Mountain Dew. Crazy. Is it ground got ground up unicorn in Speaker 0 00:11:03 It. <laugh>. So at Texas specifically. Sure. Do you think the concrete is gonna be able to keep up with the construction of Speaker 1 00:11:10 Texas? I don't think so. I think as our population in demand gets it right now, the state of Texas is consuming two yards per capita. The national average is one. So we're double, we're double the national average on our consumption. The state of Texas alone is producing 17 to 20% of national volume. We're the number one consuming state. We're like a 13 year old boy that eats everything <laugh>. Right. We're, we eat so much, we can't not only domestically produce with rock and sand and cement fly ash. We're importing those things into the state of Texas. We still don't have enough population right now. Population of Texas is, uh, 30 million. We're gonna be 50 million in 20 years. Now. I can still opening a ready mix plant if I can permit an open one is say two years and four to $5 million. If I wanna open an aggregate facility, Sandy gravel or quarry, I'm looking at it's six to 10 million in two to four years. Huh. And if I wanna open a cement mill, you're looking at 400 million to 2 billion and you're looking at it, um, seven to 10 years. Big bro. Big numbers. Yeah. But that's the reality of Speaker 0 00:12:21 It. So it's not like we're re building any plants in time soon. Speaker 1 00:12:26 Texas is open for business and has some of the, what I would say, more reasonable approaches to permitting. What we do wind up with is local municipalities starting to question that and starting to create their own supply chain problems by questioning permitting. Speaker 0 00:12:41 And you know, we had talked earlier about a ordinance that was going through that you had spoke on in Houston. Can you tell us a little bit about that? What he and what that would do? Okay. Speaker 1 00:12:50 Alright. I'm, I'm gonna poke the grizzly on this one. No, that's what I wanted to talk about it. So you've got two challenges there. The city of Houston has no zoning. Yes. And they've recognized that. They know that. They admit that. So one of the things that they're trying to do is say you can't permit renix plants in the city of Houston. Uh, for a variety of reasons. Now, here's where the legal fight gets, uh, within the, again, you may know this better than me, but it's where, as I understand it, our constitution prohibit, the state constitution prohibits a municipality from superseding a state agency that has regulatory authority. Our permits are granted by the TCE Q. So a city can't regulate past that. But that's entirely what the city of Houston is trying to do. And they, and we are open for a legislative session that's sorting in progress. And there are, I don't know, I think the right number of Dows are around 57 bills that are trying to prohibit or reduce the amount of activity from ready mix, concrete, concrete or aggregate facilities in the state of Texas. That's crazy. Speaker 0 00:13:53 Crazy. So not only are you fighting just having enough supplies, but you're fighting the notion, the local governments on being able to do your work. Speaker 1 00:13:59 Uh, the question I would have in broad general terms is what would a world look like without concrete? Speaker 0 00:14:05 It's like the base of everything. <laugh>. Yes. And yet you're trying to push it off. Correct. Speaker 1 00:14:10 Or I want to have it, I don't want it made local, locally. I'd like to have it made further away. It's shipped in. That's traffic, that's congestion, that's emissions, carbon footprint, all of those things. Yeah. I don't know anybody who in 2023 says it's my New Year's resolution. I want to increase my carbon footprint. Speaker 0 00:14:30 <laugh>. So we're supposed to be getting carbon neutral. Right, right. <laugh>. And I know also that you're, you're a well known, renowned speaker. What topics are you speaking on? Speaker 1 00:14:39 Sure. Uh, yeah. Uh, world Concrete. This is my, I think close to my 20th year speaking here at World Concrete. Um, and a partner and I, Jeff, uh, groom, we have been teaching together for a decade and we do the concrete 1 0 0 1, uh, 1 0 2 and 1 0 3. They have anywhere between 300 and 500 people in each one of the classes. So what are they about? Um, so it's the basics of concrete. Okay. So, um, what's the difference between cement concrete? We start there at the very basic. Okay. Combine the materials, then produce them and transport deposit and then we get to the other stuff about what happens after it gets there. Troubleshooting and all those things. So it's a real progressive thing, but it's about nine hours. Speaker 0 00:15:15 Wow. That's awesome. Did they get the certification at the Speaker 1 00:15:18 End of it? Uh, no. Um, but the nice thing is they always get to, they get my cell phone number and Jeff's cell phone number and they have not been shy about calling us Speaker 0 00:15:26 <laugh>. It's a great resource. Great resource too. And I know we talked earlier, what are you seeing as far as your terms and conditions or contracts in the Speaker 1 00:15:34 District? Yeah, great. Great question. And it's, um, so one of the things in the last six months that we've really spent a lot of time on is reviewing things like terms and conditions, warranties and guarantees, delivery tickets and submittals. We have all this language on there that we've always said, oh, you just put it on there. Make sure you've got it on there. Well, you and I were j just chatting about this in 2019. There's something out there that we, uh, recognize in what's called a force maur. I think you'd call that act of God clause. Yes, absolutely. It's typically in some of these documents, Hey, if this happens, hey don't hold us responsible in 2019 an act of God or a force majeure clause might be a global pandemic. Who would've thought yes, but that it was unforeseeable. What I might call a black swan now is that truly unforeseeable is a supply chain constraint, unforeseeable. Speaker 1 00:16:23 So now with good legal counsel, anybody who is not looking at their supply of agreements needs to be, it's a critical part of doing business. And if you are dismissing that as, ah, that's admin, that's not money I want to waste. I really need another widget, <laugh>. Um, so we ask the question all the time when we're looking at stuff like that, is this a $20 problem that could become a $200,000 problem or is this a $20 problem that stays that way? My belief is if you've done the right thing with your terms, conditions and legal documents, you can keep it a $20 problem. Speaker 0 00:16:57 No, absolutely. I'm doing, being proactive about it, especially with the supply chain issues. Having that in your contract, Speaker 1 00:17:03 You've gotta have it. Um, and all of a sudden, hey, this material isn't available anymore. Yeah. Um, cuz there are no more two scary letters to me in the English language then l and d. Yeah. That's liquidated damages. Speaker 0 00:17:18 Absolutely. And like if you don't build it in, if you can't get the concrete, that's not an excuse. And and so then your your a thousand dollars day penalty for not finishing that Tom, because obviously you're one of the first Speaker 1 00:17:27 Guys a thousand dollars day. Can I get on that job? Yeah, Speaker 0 00:17:29 Exactly. That's likewise. Speaker 1 00:17:30 Add a zero or more Speaker 0 00:17:32 Yeah's actually, especially when you're one of the first guys on the job. Absolutely. Speaker 1 00:17:35 Everything gets deleted. Everything gets delayed. Speaker 0 00:17:37 All right. Is there one last thing you wanted to add that everybody should know about 2023 or tech? Speaker 1 00:17:42 No, I think we've covered 'em and uh, like I said, it it, I had to fight my way to get to the booth because of the crowd and everybody knew to come here. Speaker 0 00:17:49 I'm so glad you invited me to be here and be part of this program with you. Oh, thank you so much. I appreciate this time. Yeah, you betcha. Glad to do it. Thanks. Hey guys, this is Carolyn Chroming. Thank you for listening to an episode of the Quickening Screwed podcast from the World of Concrete. Hey guys, if you need help leans, collections, contracts, we do it all. We do it in all 50 states for a flat fee and a predictable timeframe. If you wanna know more, reach out to us on our website at chrom means law firm.com, which is in the show notes. Thanks. So you're talking to Kim too?

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