concrete batch

Concrete Batch Plants

Industry Insight

Date August 2018

By the numbers


Current trends

  • Expected annual growth of 6.8% in downstream construction sectors, including concrete manufacturing, should drive positive momentum for batch plants and related assets for 2018
  • Growth and stability in the overall economy should help to further construction growth, particularly on the commercial side, which will have a positive influence on equipment values
  • Conversely, protracted increases in economic performance, low unemployment, and other generally positive macro-economic factors may cause the Federal Reserve Board to increase interest rates, thus limiting overall growth and possibly reducing end-user spending on new and used equipment


Projected Values


Housing Starts 


Residential and road projects may become more volatile as residential construction slows: Concrete has a wide variety of commercial applications including roads, parking lots, parking garages, sidewalks, and building construction. A significant portion of project funding comes from the federal government. At the end of 2015, President Obama signed the Fixing America’s Surface Transportation (FAST) Act, a five-year, $305 billion highway law demonstrating a longer term investment in infrastructure. The legislation provided state and local governments more confidence to plan major projects. Prior to its passage, Congress had not passed more than a two-year transportation funding bill since 2005. Moving through 2018, while the $305 billion FAST Act has helped to buoy growth in the construction industry up to this point, funding at the state level in many cases has been cut as a result of budgetary concerns. Additionally, while growth for the industry at large is expected to be positive on an annual basis, projecting out for the next five years, the likelihood of a slowdown in residential construction spending will create more volatility in the industry’s performance on a quarterly basis.

Concrete is also used in a variety of residential applications including foundations, basements, patios, driveways, and the construction of homes. As with the projections for residential and road projects, the projections for housing, while generally positive for the next five years, will experience some volatility in the near term. In the most recent report released in June 2018, total new private housing units started decreased 12.3 percent from May to June 2018, and decreased 4.2 percent year-over-year for June. Similarly the number of permits decreased 1.5 percent year-over-year for June. On the positive side, (seasonally adjusted) units currently under construction and total units completed increased 4.9 and 2.2 percent, respectively, for the same period.

Portable batch plants most marketable: Batch plants combine various ingredients to form concrete. Dry plants measure, mix and load dry ingredients such as sand, crushed rocks, fly ash, and cement onto mixer trucks where water is added and concrete is made en route to a job site. This approach is common when smaller quantities are needed or job sites are further away. Wet plants have a central mixer where wet and dry ingredients are combined on site, creating a more consistent texture. These plants are preferred for larger projects within close proximity.

Batch plants can be stationery or portable. Stationary plants typically have extensive mezzanine steel supports and are difficult to move. Those in use are typically older plants from before portable plants gained popularity. There is not a wide market for stationery plants, and they often are sold only for components that are easy to remove. The right of abandonment for liquidation sales is always necessary. Mixers are typically the most valuable machinery, but other common components include silos, bins, hoppers, weight scales, and boilers. Portable batch plants, which are erected and taken down relatively quickly and are pulled behind a tractor, are widely salable.

Batch plants are typically sized in cubic yards per batch. The most desirable plants fill the 10- to12-cubic-yard capacity of a truck in a single batch. Smaller capacity plants are less marketable. Operators may also own fleets of trucks. Mixer trucks are commonly transacted in the marketplace and can be good collateral depending upon age, mileage, capacity, and condition.

Regional considerations: Seasonality and geography factor into the marketability of batch plants. A longer construction season in warmer parts of the country creates more stable demand in those regions. Elsewhere, demand is seasonal with major purchasing of equipment happening in late winter and early spring after builders have contracts lined up. Because of these factors, lenders may consider a more conservative advance rate on equipment located in the Midwest or Northeast.

Forms may add value:Pre-cast concrete manufacturers fill reusable forms with concrete to make shapes such as slabs, beams, girders, walls, and pipe. Some can be quite valuable. For example, concrete pipe, which is used in applications such as waste management systems, storm water management, drainage, telecommunications cabling, electrical cabling, and waste water management, is made with metal pipe forms. Standard size pipe forms are commonly transacted on the secondary equipment marketplace. Lenders may overlook these forms as a potential source of value. On the other hand, casting beds, which are built into the ground and are used to make large products such as beams, typically have no removal value. Appraising these assets on an “in-place” basis will likely result in a higher valuation.