Cherry Dominates Demolition Market
Growth has been the name of the game for Cherry Cos. in recent years. The full-service recycling and demolition contractor has elevated its market status by adding seven new yards for stabilized materials, recycling or both since 2017. The firm also increased the size of its employee base by one-third and more than doubled its revenues since 2012. And with its growth in the industrial segment, Cherry is positioning itself as the go-to firm for demolition, asset recovery and dismantling.
Cherry has been able to differentiate itself by operating a sizable fleet of large-class heavy equipment and specialized attachments. Instead of renting, Cherry owns all of its fleet’s equipment and vehicles, allowing the firm to make decisions quickly and expedite its projects and products. “As a specialty contractor, we have the expertise and experience necessary to get the job done,” says executive vice president Ivan Svec.
Cherry has been family-owned and operated since 1952, and in that time the Houston-based company has become one of the nation’s largest demolition contractors.
Cherry operates 13 sites across the Houston area, including nine recycling centers, and identifies itself as the area’s largest privately owned provider of stabilized materials, serving about half of this market. Cherry continues to expand its geographical footprint across Houston and the surrounding areas, opening a new recycling yard in 2018. As one of the largest recyclers in the Gulf Coast region, Cherry recycles 2 million tons of concrete and asphalt and 50,000 tons of steel annually and is a major producer of recycled aggregates.
Cherry identifies itself as the privately-held market leader in nearly every sector it serves, and that distinction has worked to the firm’s advantage, says Joe Rizzo, vice president of business development. The firm’s market share ranges from 20% to 50% for recycled and stabilized materials, and commercial, residential and industrial demolition. “This enables us to make decisions quickly and efficiently in the best interest of our customers,” he says.
Cherry recorded $170.3 million in regional revenue in 2018, marking a 17% growth from the previous year and about 30% since 2016.
“We have been extremely fortunate with the growth we have experienced in the past year,” Svec says. “There has been a small boom in the local economy, which led to our opening several new locations in our service area.”
The firm attributes the increase in its business to opportunities in the multiple markets Cherry serves as well as the size and scope of its projects. Another contributing factor is the flurry of construction activity the Houston area has seen since Hurricane Harvey in 2017, and Cherry has played a role in the area’s recovery.
Most important, Rizzo says, has been the firm’s relationships with clients in and around the Houston area and in Louisiana for its industrial division. “They continue to return to us because of our expertise in each market we serve,” Rizzo says.
Among the large-scale projects the firm completed in 2018 were the demolition of the circa-1939 Harris County District Attorney’s Building in downtown Houston and bridge removals over Southmore Street in Houston and FM 518 in Pearland.
“Our success in 2018 is characterized mainly by our exemplary safety practices, standards and culture, which helped us,” Rizzo says.
Cherry identifies its people as its greatest strength and has been investing in the personal and professional development of its employees through various initiatives.
In 2017, the company developed Cherry University, where employees can take courses covering leadership, business principles and other topics that will further their professional knowledge. The company also updates and implements best practices in safety.
“Their tenure, expertise and experience are our biggest asset when it comes to not only getting the job done, but getting it done correctly and in the safest way possible,” Svec says of Cherry’s employees.
To keep up with the increase in activity since Harvey, Cherry has been hiring more employees. Cherry’s employee base grew 10% in 2018, reaching a total of 310 by the end of the year. But that growth comes at a challenging time, as recycling and demolition firms are all seeking skilled labor. Svec says the biggest challenge for his industry has been the decreased availability and quality of the workforce, specifically in terms of skilled and semi-skilled workers, commercially licensed truck drivers and heavy equipment operators.
Safety has been another significant focus area for Cherry. The firm has been able to lower its incident rate and significantly improve its safety record, a success the firm attributes to investing in and improving training and identifying potential risks and issues before they happen. The firm led more than 7,000 hours of its behavior-based safety training in 2018. Both the firm’s incident rate and its emergency modification rate are about 30% lower than the national average.
Cherry’s emphasis on safety has made the company a perennial recipient of the Diamond Level award from the Associated Builders and Contractors STEP safety management system, including in 2019.
Members of Cherry’s leadership team also have a voice on several local safety trade association roundtables, including the Associated Builders and Contractors and the Associated General Contractors.
To reach its goal of enhancing and maintaining safe work practices, Cherry has invested in its drone fleet and robotic equipment in the past year.
Cherry works to help people outside its organization, too, through efforts such as the Cherry Cares initiative to organize food drives for the Pearland Food Bank. And the firm fundraises annually for JDRF, an organization whose mission is to fight Type 1 diabetes, and participates in the annual JDRF OneWalk.
Because of his commitment to bettering the community, his company and the industry, owner and President Leonard Cherry received the 2019 Lifetime Achievement Award from the National Demolition Association in recognition of his service to the demolition industry.
Commitment to projects
Throughout his career, Brian Manning, CEO of mc2 Civil Inc., has watched the company evolve and build its reputation as a valued subcontractor and supplier. Integrity is Cherry’s strength, Manning says, and he sees Leonard Cherry instilling this quality in the company’s managers. “Cherry stands behind its products and services, and this is of great value to us as a customer,” Manning says.
Cherry’s pavement removal, crushed concrete and stabilized materials are integral to the project cycle for contractor mc2 Civil, and specifically for the firm’s roadway and highway services company, Main Lane Industries.
This past year, Cherry played a key role in two projects Main Line worked on for the city of Houston—an $18.9-million project to construct a 60-in. water line from Rockhill Street to Dixie Drive and an $11.9-million paving and drainage project for the Woodshire area.
The two projects involved difficult material removals as both were located in residential areas with homeowners associations, and crews had to coordinate with business owners and residents to provide driveway access during construction.
“Typically excavation and removal is a loud and dirty process. Cherry was able to surgically remove the concrete and haul it off for recycling without incident,” Manning says.
The demolition of the Southmore Street bridge was one of Cherry’s most notable projects of 2018. The bridge was demolished as part of the ongoing State Highway 288 expansion along a 10.3-mile stretch.
“This job was significant because the bridge itself was a post-tensioned bridge. There was no certainty that it would come down exactly the way we had planned. However, with meticulous planning and safety being of the utmost importance, we were able to bring it down and remove it without a hitch,” Svec says.
Cherry worked around the clock to complete the process, spreading crushed concrete under the bridge to absorb the impact and protect the highway when the initial demolition took place at about 1 a.m. Cherry removed more than 5,000 tons of concrete and steel and used trailer trucks to transport 230 loads. The highway was able to reopen at 5 a.m., 11 hours ahead of schedule.
Looking ahead, Cherry has lined up some significant upcoming jobs, including the State Highway 99 Grand Parkway project, a 180-plus-mile highway looping around the greater Houston area. Cherry also plans to tackle some large-scale commercial demolition in the Texas Medical Center.
Meanwhile, Cherry has gained momentum in the industrial market, now serving 40% of the sector, and Rizzo says the firm is in talks with large petrochemical companies. “Overall, we are excited for what the future holds for us, and we hope to continue to effectively touch all the markets we serve,” Rizzo says.