Issue link: http://read.dmtmag.com/i/221076
Market Pulse ("Riding High in Houston" continued from page 34) Zachary Construction Corp. is building a 38-mile segment of a new outer-outer loop. The so-called Grand Parkway 99 will intersect with several highway spokes that fan northward from the city. Zachary is partnered with Brazilian-based Oderbrecht Construction Inc. in what is the region's first design-build highway project. The Texas-sized job entails building 120 bridges, moving 10 million cubic yards of dirt, and pouring 1 million cubic yards of concrete. "Houston has a lot of very exciting things going on," Lindsey said, citing the Grand Parkway project. He attributes much of the new construction to the decision by Exxon Mobil Corp. to move its refining and marketing headquarters from Fairfax, Va., to the Houston suburb of The Woodlands. The 385-acre campus will welcome 10,000 Exxon employees by the end of 2015. "Companies that support Exxon will want to be nearby and that will bring more jobs to town. You have to house all those people. They have to have retail services. The trickle down is big," Lindsey said. Lindsey Construction moves dirt for commercial and residential development. To survive the slowdown, the company president cut costs as quickly as he could. "We tried to make some wise choices about who we would work for," he said, looking back. "We could have done a little more volume, but I was selective to make sure we got paid. Some who took a little more risk ending up chasing receivables. We came out of it wiser and smarter." Now the company is reaping the rewards of survival: Lindsey has just purchased four new Deere 750 dozers and three 850 models. "We are thankful to be in Houston, Texas," he says. ASCO Equipment Company also is in Houston as of last spring, when it opened two sales, service and rental dealerships in north and south sectors of the city. The company's lineup of offerings – including Case, JCB, Doosan and Volvo and several other major product lines – is as varied as the Texas-wide market it serves. An ASCO-supplied Gradall XL4300 reshapes and deepens a drainage ditch just outside of Victoria, Texas, about two hours southwest of Houston. The improved drainage was required prior to developing the adjacent land for the town's new Wal-Mart. 38 | www.cedmag.com | Construction Equipment Distribution | December 2013 Lindsey Construction does site prep with a Doggett-supplied Deere dozer at Amenity Lakes and Detention Ponds for the future development of McKenzie Park in Houston. ASCO's west Texas branches work with the energy industry. The company's skid steers and excavators are heavily into the state's housing industry, and its forklift trucks rumble through manufacturing centers and materials depots around the state. Telehandlers have evolved into a growth segment across industries. "One of the reasons we wanted to be in Houston," says ASCO strategic accounts manager Kirby Carpenter, "is because we found it to be a very, very dynamic market, very entrepreneurial and with lots of energy. We are excited to be there and to bring our core values to the market." One indication of Texas dynamism is this: Despite ASCO's business slowdown in the 2008-'10 years, revenue has tripled over the last five years. The company now operates 15 locations in Texas and one in Clovis, N.M. "Our company is 53 years old, so we've experienced lots of lessons from recessions over the years. This time, one of the things that helped was keeping our inventory up for rental." Rent and Rent Some More ASCO's experience reflects an industrywide shift to rental from outright ownership. Doggett Construction & Forestry Equipment also is reaping a harvest of rental revenue in the Houston market. The Deere dealer operates from 18 locations in a broad arc across Texas and Louisiana. "There has been a massive shift from ownership to rental," said Mike Ortiz, Doggett's senior vice president. "It has drastically affected our situation in Houston. The demand placed on us as a dealer to provide rental equipment has increased significantly. Dealer-owned rental fleets here in the past year reached a peak where it was roughly 50 percent of the entire market." Managing inventory well when the economy sagged helped Doggett benefit from the rentals surge. Ortiz describes the Houston construction equipment market today as a more-or-less stable three-legged stool, supported by energy, general building construction, and heavy highway projects. The three sectors may shrink or grow comparatively, but they constitute the market Doggett serves with excavators, dozers, industrial wheel loaders and similar equipment.