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Concrete company expands into block market
By Sarah G. McC. Moise
Staff Writer
To say construction is a booming industry in the Lowcountry is an understatement. But Jerry Smeltzer, president of the Van Smith Concrete Co., says the region hasn’t seen anything yet.
“As much as we who live here remark that things are just mushrooming, it’s just the tip of the iceberg. This market is just getting started,” says Smeltzer.
To meet the needs of the booming Lowcountry construction industry, the concrete company has started a new venture, the Van Smith Block Co. In addition to meeting the demand for more than 12 million concrete blocks per year in the tri-county area, Smeltzer reports that the new company is shipping a large quantity of block to Florida. “The material shortages in Florida coupled with four hurricanes means there’s a big demand.”
Owner Van Smith started construction on the $6.5 million block plant a little over a year ago, and production began in September. Presently, the block plant has 11 employees, but expects to go up to 18.
“At the time we made the announcement there was only one block producer in town. We saw that a lot of block was being shipped here and that there is a growing market for it. It’s a business that is related to what we were already doing, and we have a lot of experience and relationships in this industry,” says Smeltzer, who is now also vice president of Van Smith Block Co.
Concrete block is a new and different process for the concrete company. Blocks must be produced as a manufactured shape and the plant is responsible for aesthetics, rather than simply mixing, delivering and pouring ready-mixed concrete. Blocks are sold in eight-inch equivalents, and Van Smith Block Co. is able to alter the block shapes to fit their customers’ specific needs.
“There are different mold standards, and we can manufacture 30 or 40 different shapes and sizes,” says Smeltzer.
The entire Van Smith plant is automated with state-of-the-art machinery and uses mainly local materials, such as aggregates from Jamestown, local sand and cement from Holly Hill.
“Blocks have to cure for 28 days after they’re made, so all we were doing in September was building inventory and working out the kinks in the system,” says Smeltzer. “At the end of the first month, we were running at 30 percent. By October we were at 60 percent, December at about 80, and now we’re running at 100 percent.”
The company sells to general contractors and residential builders, such as John Wieland Homes and Neighborhoods, one of its larger clients, as well as to some resale dealers. And Van Smith is already capturing the attention of markets outside of South Carolina. Atlanta-based B&M Masonry, which just completed the new Wando High School in Mount Pleasant, is expected to order blocks from Van Smith for Roper Hospital’s seven-floor, 245,000-square-foot tower construction on Calhoun Street. The facility will use concrete block in stairwells and partition walls, and is predominately a concrete structure with a brick façade, not a masonry structure.
Van Smith also is shipping its product to Florida, since concrete block has become a hot commodity after the devastating 2004 hurricane season. Florida builders are purchasing blocks for mobile home foundations, and the majority of residents and businesses are rebuilding using above-grade masonry.
The Portland Cement Association, which represents cement companies in the United States and Canada, notes in its latest forecast that 35 states are now experiencing cement shortages, up from 29 in its June survey. To combat the shortage, the industry has announced a price increase for January 2005, marking a 29% jump above January 2004 prices.
“Our prices have gone up 15 percent, to $10 per cubic yard for 2005,” Smeltzer says.
The shortage of cement is partially fueled by China’s imports. The country is reportedly consuming 55% of the world’s cement. The cement market in China has expanded 8.3% per year during the last decade and topped 829 million metric tons in 2003. Demand increases will continue to outpace the global cement market, rising 5.4% annually in the next five years and reaching more than one billion metric tons in 2008, benefiting from robust growth in the booming construction industry in China.
“Cement is short in ready-mixed, and it’s short in the block business. We haven’t seen [construction] stopped because of this, but it continues to be short,” says Smeltzer. “There won’t be a shortage of block here, because if we can’t meet our local demand, we’ll simply stop shipping to Florida.”
Sarah G. McC. Moïse is a staff writer for the Business Journal. E-mail her at smoise@crbj.com.
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