A Robust Year and Solid Prospects for Top Specialty Firms
Low-cost natural gas is playing a major role in the boom of industrial and energy-related projects across the Gulf Coast region, and that has meant more business for specialty contractors in Texas and Louisiana. Companies across the region are moving to build additional storage, infrastructure, processing and extraction facilities, all to the benefit of local markets and contractors.
Six of the top 15 firms on this year's list of the largest specialty contractors reported an energy-related project as their biggest project to break ground in the last year. The top five firms all posted regional revenue growth as well, ranging from $10 million to more than $400 million.
The 109 firms on this year's list reported total regional revenue of $7.16 billion in 2012—$6.28 billion in Texas and $872 million in Louisiana. In last year's ranking, the 82 firms that responded posted $4.94 billion in revenue.
With the continued growth in construction activity in Louisiana and Texas tied to energy-related expansion, specialty contractors in both states are looking forward to even more work in 2014.
Many firms have also been seeing better business opportunities in other sectors. "We've seen improvements over the last 18 months, and we're seeing a lot of corporate build-to-suit opportunities in health care as well as opportunities in higher education," says Barry Moore, president of Brandt Cos.
For Brandt, a mechanical and electrical contractor based in Carrollton, Texas, regional revenue was up about $10 million this year, landing the firm in fourth place on this year's ranking.
"One of our strategies that I think has paid off is we do both mechanical and electrical work, so we've been able to package projects together that allow us to deliver a more efficient MEP system," Moore says.
Renovation and expansion work has been plentiful in the region, and Brandt is also seeing a big increase in industrial opportunities, Moore says, pointing to the award four months ago of a State Farm regional headquarters project, involving 1.5 million sq ft in Richardson, Texas, and a Houston corporate headquarters for Southwest Energy Co., which Brandt is working on with Harvey Builders.
Joe Rizzo, business development manager at Cherry Cos., says all sectors remain strong, especially with the residential market returning. The Houston-based concrete and demolition firm saw growth of almost $20 million over the previous year, lifting its regional revenue to $82.8 million and earning it the No. 22 spot on this year's ranking.
"The commercial market has gained momentum in the past two quarters and shows growth for 2014, while the industrial markets remain steady and the end of year should see a bump," Rizzo says. "Plus, recycled materials—aggregates and stabilized materials—have increased quarter over quarter and will remain at a high demand due to infrastructure growth."
Additionally, the Baton Rouge corridor in southwest Louisiana "is touting a $50-billion boom," says James "Pepper" Rutland, CEO of MMR Group. "So it's really hard to single out something when there's this much activity on the radar." Work includes the massive $21-billion gas-to-liquids facility that South African oil giant Sasol plans to construct in St. Charles. [For more on developments in Louisiana, see this year's Specialty Contractor of the Year feature, p. TX49.]