Concrete Products

JUL 2014

Concrete Products covers the issues that attract producers of ready mixed and manufactured concrete focusing on equipment and material technology, market development and management topics.

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42 • JuLY 2014 CHAIRMANÕS REPORT BY STEVEN PROKOPY AMERICAN CONCRETE PIPE ASSOCIATION AT-A-GLANCE CHAIRMAN-ELECT (2015) Mike Kusch Director of Technical Marketing Sherman-Dixie Nashville, Tennessee CHAIRMAN (2014) Rick Traylor Vice President Technical Services Rinker Materials–Concrete Pipe Division/Cemex USA Houston, Texas IMMEDIATE PAST-CHAIRMAN (2013) William Adams Sales Hancock Concrete Products Dakota Dunes, South Dakota The American Concrete Pipe Association has provided a voice for concrete pipe producers in matters affecting the industry's welfare for 106 years, making it among the oldest active trade associations in North America. In return, ACPA members contribute to the improvement of our environment by producing quality con- crete pipe, engineered to provide a lasting and economical solution to drainage and pollution problems. ACPA was conceived in 1907 as the Inter- state Cement Tile Manufacturers Association in Ames, Iowa, by a small group of concrete farm drain tile producers. The organization was established as a vehicle for exchanging ideas and establishing high-quality, stan- dardized products. In 1914, it was renamed the American Concrete Pipe Association. Throu g ho u t t he 2 0 t h c e nt u r y, t he concrete pipe industry experienced tre- mendous growth. As people migrated in ever larger numbers from farms to cities, demand increased for concrete sewer and drainage products. With the introduction of the automobile and subsequent devel- opment of the highway network, use of concrete pipe storm drains and culverts grew exponentially. Today, ACPA members operate 300-plus plants, and membership spans producers and organizations in more than 40 countries. ACPA's international headquarters are locat- ed at 1303 West Walnut Hill Lane, Suite 305, Irving, Texas 75038; 972/506-7216; fax: 972/506-7682;; www. ECONOMIST CONTRASTS CONCRETE PIPE PROFITABILITY WITH OSHA'S SILICA RULE CLAIMS Reinforcing the American Concrete Pipe Association's position on OSHA's proposed permissible exposure limit of respirable crystalline silica in Gen- eral Industry and Construction is an analysis Bethesda, Md.-based Envi- ronomics, Inc. conducted for the American Chemistry Council Crystalline Silica Panel, with an emphasis on the proposed rule's economic feasibil- ity and cost-benefit factors. Among industries OSHA profiles in Notice of Proposed Rulemaking for Occupational Exposure to Respirable Crystalline Silica tables, notes Environomics President Stuart Sessions, "Consider concrete pipe manufacturing, [where] estimated (pre-tax) profitability changed from 7.27 percent in 2000 to 4.90 percent in 2001, a decrease of 32.6 percent. From 2004 to 2005, however, this industry's profitability, as OSHA calculated it, increased from 5.95 to 10.78 percent, a large increase of 81.2 percent. "Over the seven years from 2000 through 2006 that OSHA shows in the table, the concrete pipe industry's profit rate increased year-over-year four times and decreased year-over-year three times. What are we to make of this? What does this information suggest, if anything, about whether the concrete pipe industry now, in 2014, is likely to be able to afford what- ever compliance costs the Proposed Standard will impose on it?" "I believe OSHA's information on historical changes in profitability for an industry suggests absolutely nothing about whether the industry will or will not be significantly adversely affected by potential regulatory compliance costs. OSHA presents no information to indicate whether the concrete products industry was healthy or unhealthy in 2000 or 2006, no analysis to indicate whether [overall] profitability was increasing or decreasing over this period (the Agency presents information only to show that profitability was fluctuating over this period rather than steady), and no information to indicate whether any trend that might have been observed from 2000 through 2006 might or might not have continued between that period and the present," Sessions argues. "Year-to-year fluctuations in an industry's profitability, or the lack of such fluctuations, are not particularly important to the industry's long- term economic health. What is important is the longer-term trend in prof- itability, notwithstanding whatever fluctuations occur. Industries can and do survive substantial year-to-year changes in profitability or costs while remaining healthy if the long-term trend is favorable. "The analogy OSHA attempts to draw between regulatory costs and these short-term reversals is inappropriate. Because OSHA has annualized the expected compliance costs for the regulation (i.e., it has converted the initial capital and ongoing compliance costs into an equivalent stream of annual costs, continuing each and every year, forever), the regulatory costs that OSHA is imposing result in permanent, not temporary, changes in industry costs, revenues and profits. It is wrong for OSHA to expect that the response of an industry to a permanent and continuing negative eco- nomic change such as the annualized compliance costs of the Proposed Rule will be the same as to one that is expected to be only temporary."

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