Neil Hoobler, president of Supreme Manufacturing, paid P&Q a visit this spring to discuss the latest in dredging. Our conversation covered the market environment and what’s currently driving demand for dredges.
We saw capex come to a grinding halt last year. Dredges certainly represent big capex projects. What was 2020 like for Supreme Manufacturing on this front, and what sort of activity are you seeing thus far in 2021?
2020 was a record year because we were fabricating [and] manufacturing the jobs sold in 2019 and early 2020 before the pandemic. But it slowed down. In early 2020, we had a lot of momentum and a couple of people were seriously considering dredges. When the pandemic hit, they pulled back and were hanging on to their capital and couldn’t travel.
Not only were we not allowed to go onto their site, but they weren’t allowed to leave and go on dredge tours.
The travel is opening up slowly now. The capex is opening up even a little bit slower than that.
What factors are driving the dredge projects you currently have?
As permitting gets harder and more costly, you’re going back and recovering deposits that were left behind with previous mining methods [using] an excavator if your deposit goes deep.
In the past, it was a little bit easier to go horizontal. As people are running out of horizontal acreage, they’re wanting to go back and get it (untouched reserves). We like to say that you’re investing in savings. You don’t want to leave the profits behind.
A ‘good year’ for a dredge manufacturer is roughly how many dredge sales these days? Just a handful can still make your year, right?
Multiple dredges is a good year.
What challenges are surfacing that might limit dredging in the years to come?
Steel prices have increased sharply for a couple months. They’re the highest they’ve been in several years.
What’s your outlook for the rest of 2021?
I’m optimistic for our business because we (Supreme Manufacturing) are environmentally friendly. Our dredge typically is all-electric, and it’s replacing drivelines, [a] loader, [a] portable crusher and several haul trucks.
In our view, that ‘sustainability’ notion seems to be gaining traction of late. Do you agree?
I think ‘sustainability’ has been more of the buzzword the last 10 years. Prior to 10 years ago, I don’t recall hearing that. With the political climate the way it is now, I think that push is going to continue.
That’s part of our sales pitch. We are environmentally friendly, and it’s typically ‘lower cost per ton.’
What else are you keeping tabs on these days?
I believe that if Congress could pass a long-term highway spending bill, that would be good for all of the aggregate industry and related manufacturers.