been a big opponent, but in 2019,
Mother Nature was relatively normal in
our geographic footprint. As a result, in
2017 and 2018 our financial and related
numbers were good, but we knew they
could have been better if the weather
wasn’t so abnormally challenging. We
literally said at the time, ‘If we just have
weather that isn’t horrible, we’ll put on
quite a show.’ And that’s happened this
year. Volumes are up by double digits in
several divisions and despite that, we’re
still not approaching the peak shipment
levels we experienced in 2005 and 2006.
Cost control, too, has continued to
make a big difference – in aggregates
and cement, and particularly in our
Magnesia Specialties business. We have a
relatively healthy economy and more
normal weather and that’s a powerful
combination for Martin Marietta.
Now, let’s look ahead. Infrastructure has,
historically, been more than 40 percent
of our business. However, in the past few
years, it’s been below 40 percent. We
anticipate that infrastructure will
improve as each of our top 10 states
has, in the past five years, added new
investment vehicles for highways,
bridges and roads. That’s our single
most aggregates-intensive business on
a dollar-for-dollar basis. By contrast,
nonresidential, on a percentage basis, is at
higher levels than we’ve historically seen.
And while nonresidential has been good,
it’s not an overheated marketplace. That
means in 2020, we’re going to see another
healthy nonresidential year. Residential,
historically, has been about 15 percent
of our business. This year, it’s in the
low 20s. You could make the argument
that it’s overbuilt, but it’s not in our
specific markets. So, to summarize, next
year will look better for infrastructure,
nonresidential and residential, but if
you’re looking for the one end-use that
will likely be most improved year over
year, it will be infrastructure.
12 November/December 2019 12 2019 The Conveyor | www.martinmarietta.com
Q: Coming into 2020, we’re beginning
a new part of the SOAR (Strategic
Operating Analysis and Review)
process. Can you discuss some of
SOAR’s successes? Where
has it fallen short and how are we
responding to that? What may
SOAR 2025 look like?
A: Going back to the initial SOAR in
2010, management brought forward a
series of initiatives to the board of
directors that looked at where we wanted
to be and why. Five years later, at the end
of that first SOAR process, the company
achieved about 90 percent of our goals.
Then, when we began the next phase of
SOAR in 2015, one of the aspects we
outlined was an aim to be a $20 billion
company by 2020. A few weeks ago, when
the company’s share price was at about
$270 a share, we had an enterprise value
of $20 billion. My guess is that very few
people would have said Martin Marietta
would be able to do that, but we did.
That’s quite an achievement. Against that
strong backdrop, if there’s one area of
disappointment, it’s been relative to
overall shipment levels. Volumes have
simply recovered more slowly than
anyone would have thought. We’ve
overcome volume deficiencies with
attractive pricing, good geographic
positioning, disciplined cost control, and
selling excess real estate. Overall, the
SOAR process has been superb and what
makes me so proud is that it’s a Martin
Marietta process and product. SOAR is
Martin Marietta-constructed and Martin
Marietta-executed. We’re now starting
to undertake SOAR 2025 and it will be a
methodical build throughout the year
culminating with a presentation to our
board of directors in August. Here’s what
I expect: We will continue to be an
aggregates-led business. If you look at the
world’s best aggregates markets, they’re
in the United States. Similarly, if you look
at the best business to have a leading
position in, it’s the aggregates business.
We’re in the right places. We have the
continued from page 11
Our people continue to inspire. In
March, Engineering Manager Jon
McGee shared details of his battle with
cancer while urging us all to “never
give up” in our own lives. McGee
continues to undergo treatment and
is doing well. He remains a full-time
employee and is enjoying his life with
his wife and two sons.
Nowhere was Martin Marietta’s focus on
reclamation and sustainability prettier
than at the former North Marion Quarry
in Kansas, which was recognized in
January with the state’s 2018 Governor’s
Mined Land Reclamation Award.
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