SOURCEBOOK: Green Expansions, Retrofits Buoy Market
Contractors in the manufacturing sector are finding work through a proliferation of facility retrofits and renovations as cash-strapped manufacturers scramble for cost-saving efficiency, flexibility in buildings management and sustainability.
In the telecommunications market, voracious consumer demand for new technology and services is pumping up markets with an explosion of small cell-tower and related infrastructure projects.
Although greenfield projects are few and far between, contractors in auto assembly plants and solar-panel factories report ample work, even as the current markets present “a cloudy picture right now,” says Dave Hanson, senior vice president at Detroit-based Walbridge Co. “Our clients have lots of plans for projects this year. The question is whether the economy will support them.” This year, Walbridge is contractor on several renovation and expansion projects in the automobile and aviation sectors, including expansions for Ford, Chevrolet and Chrysler. The firm is also working as construction manager-at-risk on a 190,000-sq-ft assembly facility for Brazil-based aircraft manufacturer Embraer at its Melbourne, Fla., plant; that project is expected to be completed by year's end. Further, Walbridge is benefiting from the green movement. The firm is CM-at-risk on a $175-million, 80,000-sq-ft solar- panel plant for Twin Creeks Technologies South East LLC, to be completed at Senatobia, Miss., this year, as well as a 300,000-sq-ft, $117-million battery recycling plant at Tampa, Fla., for Envirofocus LLC, targeted for a 2012 completion.
Birmingham, Ala.-based Brasfield & Gorrie LLC is another firm finding work driven by the sustainability push. This year, the firm completed a $100-million, 400,000-sq-ft high-efficiency power-turbine facility at Chattanooga, Tenn., for Paris-based Alstom. Several expansion projects are under way in the Southeast for foreign automakers, such as Mercedes Benz, Hyundai and Volkswagen, following “increased foreign investments in the U.S.” as manufacturers in Europe and Asia aim to cut down rising shipping costs to U.S. markets, notes Chris Kramer, Brasfield & Gorrie vice president. On nearly all the firm's projects, “owners might not be asking for LEED certification, but they increasingly want more-efficient facilities,” Kramer says.
Facility capacity levels nationwide are hovering around 78%, which is four percentage points higher than last summer. That difference is enough to warrant plant expansions but not greenfield projects, explains Jim Rossmeissl, executive vice president at Appleton, Wisc.-based Boldt Co., citing the U.S. Census Bureau's annual survey of plant capacity utilization. “Greenfield projects start when capacities reach the about 85%,” Rossmeissl says. “As capacity is inching up, we're seeing activity increase in auto, food, pulp and paper, tires and mining.”
Tom Clark, chief revenue officer for Menasha, Wisc.-based Faith Technologies Inc., notes, “Owners want projects done faster in half the time. As a contractor, we're being asked to be involved early on in projects” as owners look to streamline delivery and catch design conflicts early with BIM applications. The food- and-beverage market is spurring about 150 projects for the firm.
In the current competitive hard-bid environment, owners' team selections are “a lot more qualifications-based” than previously, says Clark. “They want experience, and a lot of work is based on previous relationships.” Kramer concurs, noting that Brasfield & Gorrie's “relationships approach to business” has been a key to landing projects in the recession.
Telecom markets chug ahead as consumer demand for new technologies and expanded services continues unabated. Contractors say the market consists of many small projects from coast to coast. For example, Mankato, Minn.-based telecom contractor Hickory Tech Corp. One recently won a $24-million project to build high-capacity fiber transmission lines in Minnesota.