MIGHTY IRON

OlympicMuscle

british columbia builds toward 2010 winter games

CONSTRUCTION MACHINES AT WORK www.mightyiron.com

MIGHTY IRON

cover story

building the 2010 winter olympic games5

With the 2010 Winter Olympic Games just around the corner, the Canadian province of British Columbia is in full building mode. Volvo

Construction Equipment and its dealer, Great West Equipment, are supplying their share of the iron to transform the province’s majestic beauty into world-class competition venues. From the tip of the Coast Mountain range to the picturesque Okanagan Valley, we take a look at Canada’s westernmost province.

the contractors reshaping british columbia

Construction in British Columbia has seen its share of ups and downs in the past decade, but a now boom has taken hold across the province. And while the 2010 Winter Olympic Games are a big part of the action, the economic surge extends well beyond Vancouver. Upscale housing, roads and bridges are all engines driving the progress. Our cover story takes a closer look at the men and the companies that do the work.

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neilson labounty hoban nolitt

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story and photos By Joe Hanneman

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From sea to sky

ON A STAGE

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FEW PLACES ON EARTH CAN RIVAL THE NATURAL BEAUTY OF WESTERN CANADA, WITH ITS ICE-CAPPED MOUTAIN PEAKS, serene glacial lakes, Pacific fjords and sweep-

ing forests. The western edge of North America is known as the Sea to Sky Region, and it is aptly named. In just a short drive along British Columbia’s coastline, you can marvel at the glassy, still waters of Howe Sound, rise up along miles of mountainous granite formations to the towering stands of fir, hemlock and cedar that carpet the Coast Mountains.

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Volvo A30D hauler backs down to construction site for

the freestyle skiing venue at the 2010 Winter Olympics.

FroM its PRIZe-WInnInG VIneyaRDS to its BUSTLInG PoRT and Wealth oF SKI ReSoRTS, British coluMBia is aBout to Go on staGe For the World. the host proVince oF the XXI oLymPIC WInTeR GameS and the X paralyMpic Winter GaMes is in BUILDInG moDe these days. and VolVo construction eQuipMent is in the center oF it all.

NIALL WALLACE SEEMS PERFECTLY AT HOME STARING DOWN THE BARREL of a 27-degree vertical drop on the face of Black

Mountain. With the skill and confidence of an Olympic skier, Wallace routinely perches himself at the mountain’s edge, where he can look down on the lodge far below.

Not many would have the nerve to work at such heights or on such steep grades. Especially seated in the cab of a fully loaded 30-ton articulated truck.

“It’s an incredible view,” said Wallace, an operator for North Construction, which is building the Olympic freestyle skiing and snowboarding venues at Cypress Mountain Ski Resort. “You get used to working the mountain. This truck has really sure footing and is a solid climber.”

A Volvo A30D articulated hauler might seem out of place among the towering yellow cedar and hemlock trees more than 3,000 feet up a mountain. But right now it is the key competitor on these slopes. Before Olympic skiers can

compete here in 2010, the Volvo A30D must make its own championship runs, carrying tons of material to build the moguls, ramps and half-pipes.

At the top of the freestyle skiing run, Wallace backs his A30D down a steep, winding access road. Perched just at the precipice, he raises the truck’s bed to dump fill dirt over the side for waiting excavators to distribute it. Then it’s back down the mountain.volvo haulers can really climb

Chris Cheney, a salesman at Volvo dealer Great West Equipment in Surrey, BC, said Volvo is the only brand of artic hauler that can handle these mountains. “The overall opinion of the A30D is it is the best hill hauler,” said Cheney, who has sold many of the trucks working on Olympic projects. “The main difference between a Volvo and the competition is its responsive and powerful transmission

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diggin in: Demidoff Equipment crews build a pedestrian tunnel at the Winter

Olympic biathlon site (far left). A Volvo excavator (above) works on the 18

kilometers of ski trails and 11 bridges at the country country ski venue.

retarder. This allows the operator to descend on steep slopes with confidence and control.”

The extreme terrain up here is nothing new to Kevin Webb, an avid skier, helicopter pilot and the owner of North Construction. “The trick is finding guys who are comfortable working on that pitch,” Webb said. “We’re on five mountains this year and we could be up to six or seven soon.”working on extreme terrain

North Construction specializes in the design and construction of ski runs and other projects built on “extreme terrain.” For the 2010 Winter Olympics, North is building the aerial freestyle skiing competition venue along with chair lifts, snow-making towers and communication and lighting infrastructure.

The Volvo articulated hauler is the only truck North Construction uses in these conditions. The truck has been hauling rock bedding for trenches, and moving more than 4,000 cubic meters of topsoil to dress the ski hills.

“We’re real happy with it,” Webb said of the Volvo A30D. “The drivers and operators like the comfort and ergonomics.” That’s a good thing, because Webb needs to put — and keep — good operators like Wallace in the cab.

“The drivers are an integral part of what goes on up there,” Webb said. “We don’t put rookies on these projects. These operators are the best.”

“it’s got to be the coolest job we’ve ever worked. how often do you get to say you built the olympics?”

– stuart neilsongeneral manager

demidoff equipment

native peoples and nordic events

STUART NEILSON of Demidoff Equipment is not only building the

Winter Olympics, he is helping build long-term economic success for the original inhabitants of the Callaghan Valley.

The Vancouver Olympic Committee signed a historic agreement in 2005 to involve four of Canada’s First Nations in construction of the competition venues. When the Mount Currie Band of the Lil’wat First Nation was invited to help build the Nordic skiing venues near Whistler, it partnered with Neilson and Demidoff Equipment for their construction expertise. There are now 19 Mount Currie Band members on the project.

“We’ve been able to put our equipment in and they’ve been able to purchase equipment and train guys and put them into the mix with our company,” said Neilson, Demidoff ’s general manager. “It’s helping them to grow, so that once this is over they can stand alone and have their own company to do it.”

Working with the Mount Currie Band’s Creekside Resources Inc., Demidoff is building the venues for the biathlon and cross country skiing events in the picturesque Callaghan Valley near Whistler. “We’re building all of the cross country and biathlon trails, which are 8 meters wide, so it’s like building logging roads,” Neilson said. “There are 18 kilometers of that, plus 11 bridges and more than a kilometer of road.”

building cross country, biathlon trails Demidoff had to clear and build

its way into the site in 2005, and since moved on to construction of the trails, the biathlon shooting range, a pedestrian tunnel, the media center, athlete compound and more. Volvo A30D articulated haulers are moving most of the material on site, and two Volvo excavators are being used for site prep and cut-and-cover operations.

“It’s total construction of a whole new venue,” Neilson said.

The Volvo EC460B played a key role in construction of the pedestrian tunnel at the biathlon site. With its power and smooth precision, the excavator lifted and placed huge sections of concrete box culvert for the inside of the tunnel, which will allow press and spectators to access the penalty loop area of the biathlon event.

“Our 460, we have one of our best operators, Kelly Rodman, on it and he loves it,” Neilson said. “He’s been operating it since it was new last year. It’s quick. It has a lot of power and quick cycle times.”

The Volvo A30D has earned a

reputation for quick cycle times, making up to 3 kilometer hauls of rock, dirt and cleared vegetation on the site. “The Volvo truck actually outperforms every other truck,” Neilson said. “It consistently hauls more, has quicker times — it’s great.”

Work on the site will continue well into 2007 and Neilson hopes his firm will be working on other Olympics-related projects. Given the partnership and prominence of the job at hand, he figures this one is pretty special.

“It’s got to be the coolest job we’ve ever worked,” Neilson said. “How often do you get to say you built the Olympics?”

Follow the road from sea to sky

THE ROAD FROM Vancouver to Whistler is called the Sea to Sky

Highway. From humpback whales off the coast of Horseshoe Bay to bald eagles soaring over Whistler Mountain, the highway is a vantage point to Canada’s natural beauty. The more than 100 kilometers of winding road overlooks Howe Sound and clings impossibly

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close to granite rock formations along the Pacific coast. The drive is beautiful, but the road was not made to handle Olympic-size traffic.

Volvo excavators and articulated haulers have played a pivotal role in a more than $600 million upgrade of the Sea to Sky Highway. The project, which began even before Vancouver was awarded the 2010 Games, includes adding divided lanes and medians, road widening and straightening, bridge construction and other improvements to handle heavy traffic from Vancouver to Squamish and Whistler.

The first section of improvements was done by Bell Contracting using Volvo EC330B and EC460B excavators and a fleet of Volvo haulers. Bell had to do a lot of blasting to cut into the mountain for room to add lanes. It loaded the blasted rock with the EC330B into A30C and A30D haulers. Some of the rock was used a short distance away as rip-rap to prevent roadside erosion along the Squamish River. A Volvo EC460B equipped with a bucket thumb did precision placement of the rip-rap.

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uphill, upscale: Rande Nolitt Contracting (left) specializes at building on the moun-tainous terrain around Kelowna, BC. The area’s natural beauty and temperate climate make the Okanagan Valley a fast-growing part of British Columbia.

rande nolitt: Building mountain homes.

The rest of the highway construction is being handled by Peter Kiewit Sons, which acquired six Volvo A30D haulers to move rock and earth along the construction zone. The A30Ds excel at backing up the steep access ramps and maneuvering inside tight work zones that tend to be adjacent to live traffic.

While work progresses on the concrete highway, an information highway is being constructed to carry video, audio and other communications to and from the northern venues. A new fiber-optic backbone is being installed along the Canadian National Railway, which runs along the Sea to Sky for nearly 50 kilometers. A Volvo EW180B wheeled excavator equipped to ride the rails is working on installation of the fiber optic channel.

growing the okanagan valley

WITH INCREDIBLE LAKES, LUSH MOUNTAINS, famous

wineries and mild weather, it is not hard to understand why Canadians and others are flocking to the Okanagan Valley in south central British Columbia. A popular vacation spot for Vancouverites, the Okanagan is increasingly drawing wealthy new residents from neighboring oil-rich Alberta.

Nobody sees it more than Rande Nolitt, whose Volvo excavators, mini-excavator and skid steer are busy building upscale homes into the rough-hewn hills of the Lakeview area west of Kelowna, BC.

“Most people here are going to spend $1.5 or $2 million or even more on a

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home,” said Nolitt, proprietor of Rande Nolitt Contracting. “We were just involved in one that was $4.5 million. They want to be high up. They want a lake view — unobstructed. The homes in this area are all million-dollar homes.”steep, rocky sites are a specialty

Nolitt specializes in residential building on rocky, steep parcels. The work usually involves precision hammering of rock so as not to disturb existing properties. Because the sites are steep, backfilling often takes several excavators at different levels. One job had a Volvo EC210B and EC140B moving dirt up the site, while an EC35 mini-excavator spread the material inside the foundation.

“Given the terrain here,” Nolitt said, “this backfilling always takes up two or three machines. One throwing to another. We specialize in the high-end residential and the tough sites. That’s where this Volvo equipment has been

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“the valley is one of the best places in the world. it’s hard to find a better place to live and work. People are flocking here.”

– clayton hobanowner

hoban equipment

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rock solid: Contractors have adapted to building on steep, rocky job sites as demand for residential housing has soared.

big time: Hoban Equipment develops a 26-lot residential site near Kelowna that will include $2 million homes. Demand is strong.

timber: LaBounty Logging uses excavators to gather, sort and process harvested trees.

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working really well.”Based on Volvo’s superior fuel

economy, operator comfort features and ease of operation, Nolitt said he simply won’t run any other brand of iron. “Given the kind of rocky terrain, it’s amazing what these machines have done and how they’ve held up,” Nolitt said. “I’ve had virtually no repairs on this equipment. We’re really impressed with them.”

THE WAY CLAYTON HOBAN SEES IT, the housing boom in the

Valley isn’t surprising. “The Valley is one of the best places in the world,” said Hoban, owner of Hoban Equipment Ltd. “It’s hard to find a better place to live and work. There are subdivisions being built everywhere. You drive around and say, ‘There’s another one. There’s another one.’ People are just flocking here.”

Hoban’s construction firm has never been busier. On a 26-lot upscale housing development near Kelowna, BC, a Volvo EC330B loads blasted rock into an A35D hauler. The new home sites are being cut into a bluff overlooking the water. On a 600-parcel site in nearby Vernon, an EC240B builds retention

walls, while an EC210B lifts and places heavy blasting mats.heavy demand for even difficult land

“The majority of our sites are major steep side hills,” Hoban said. “Solid rock. There’s been no easy dirt moving at all. We’ve been strictly working in rock for the last year and a half. That’s been the challenge of these jobs.”

Hoban is sold on Volvo quality, and he’s the first to say that it’s much more than the machine. It’s also the people and the service. Even the little

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things make a difference. Like Dennis Tkatchuk, a salesman for Great West Equipment, often seen on Hoban’s job sites handing out cold bottled water to the workers.

“They’ve bent over backwards to help us out with anything we’ve ever needed,” Hoban said of his Volvo dealer. “Even things we haven’t asked for they take it upon themselves to do.”

As for the equipment, Hoban said the haulers and excavators combine

outstanding performance with operator comfort. “The rock trucks, the guys absolutely love them. They don’t even want to get into their pickups at the end of the day,” he said. “The excavators, they’re set up really good for the operators. And if they’re happier, if they can put in a 12-hour day and get out of the machine and not be bagged, it makes a huge difference.”

Hoban has been so impressed with Volvo, he has started phasing out a competitive brand and moving most of his machines to Volvo.

Performance at the top of the world

THEY CALL IT “THE BUSH,” THE MOUNTAINTOP forests

where the loggers work. Just getting here requires a 45-minute drive up steep, narrow logging trails to reach elevations over 1,900 meters. Wayne LaBounty, owner of LaBounty Logging of Westbank, BC, has been working these lands for 25 years. He said his Volvo EC210B and Volvo EC240B forestry excavators have become a crucial part of operations

to sort and process timber for the trip down the mountain to the mill.

Once the trees have been cut by a feller buncher and moved to a staging area by a skidder, the EC210B goes to work. Equipped with a harvester/processor attachment, the excavator

deftly plucks trees off the forest floor. The processor strips the branches and an integrated chainsaw cuts the ends or trims the log to a specified length for the mill.

Equipped with a clamshell grapple, (continues)

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Carry a Big Stick: Excavators gather timber and load logging trucks, while the multi-processor (below) strips and trims the logs.

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parting shot

First opened in 1938, the Lions Gate Bridge connects Vancouver with the North Shore of British Columbia. The bridge is named

for the Lions, two mountain peaks north of Vancouver.

the EC240B can lift a dozen or more

processed trees, stand them upright to even out the ends and then place the bunch on a trailer. LaBounty said he hasn’t had to worry about downtime with the Volvos. Machine performance has been very good.

“The boom, the stick and the swing — it’s all fast,” he said. “Operator comfort is good, too. Climate control, heated seats, the position of the joysticks. I can easily go 15 hours in it, no problem.”

LaBounty said he has come to rely on outstanding service from Great West Equipment. Early one morning the feller buncher would not start. Even though it was well before shop hours, he called Great West. They had a service mechanic on site at 8:20 a.m.

“In 35 years I’ve never seen that.” .

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MIGHTY IRON

Building Big on the High Plains

SUPPLYING TEXAS CONSTRUCTION FROM 18 READY-MIXED PLANTS

CONSTRUCTION MACHINES AT WORK www.mightyiron.com

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FLEET OF VOLVO ARTICS AND WHEEL LOADERS KEEPS LATTIMORE MATERIALS WELL STOCKED

McKINNEY, Texas — It has often been said, “Everything is bigger in Texas.”

With 254 counties and nearly 22.5 million people, it is the second most populous of the United States. A border spanning nearly 2,900 miles contains 268,561 square miles of land and water, making Texas big enough to be its own country.

Texas is known for thinking big — and building big. Its construction market for roads, bridges, residential homes, commercial buildings and public works projects spurs massive

and growing demand for raw materials.

Some of the world’s biggest construction contractors operate on the high plains around Dallas-Fort Worth. Th eir high-rise buildings, six-lane concrete ribbons and soaring bridges only get built if there is a reliable supply of concrete, rock and sand. Filling that need is a longstanding passion for John Victor Lattimore Jr. and his family-run materials company.

A self-described “road hand” who grew up watching his grandfather and

By JOE HANNEMAN / Photos by CHRIS DUZYNSKI

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BIG DEMAND ON THE

TexasPLAINS

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father work in highway construction, Lattimore is as much at home in the seat of an articulated truck as he is behind his president’s desk at Lattimore Materials Company. He knows construction iron. His company’s growing fl eet of Volvo machines from ROMCO Equipment Company helps supply a sophisticated network that brings ready-mixed concrete and aggregates to a large part of Texas and Oklahoma.

“Customers know us for delivering consistently high-quality concrete and materials, on time,” Lattimore says. “We do that every day with great people, teamwork and smart investment in equipment. Volvo loaders and articulated trucks get it done for us. Volvo has done the job we needed and given us value.”

Growing fl eet, growing businessLattimore Materials is one of the few

privately held ready-mixed concrete operations in the industry. Founded in 1961 by Vic Lattimore’s father, John Victor Lattimore Sr., LMC has been on an impressive growth curve over the past decade. It has become one of the premier suppliers of ready-mixed concrete to the Dallas-Forth Worth metroplex and all of north Texas. Th e U.S. Geological Survey

ranks LMC among the top 75 sand and gravel producers in the United States.

As LMC has grown, so has its infrastructure, which now includes 18 ready-mixed-concrete plants, four sand and gravel mines, two limestone quarries, four rail terminals and more than 400 10-yard drum-mix trucks and 25-ton rock trailer trucks. Its Volvo fl eet includes 13 Volvo A40 articulated trucks, 13 L120 wheel loaders, seven L180s, one L220E and one L330E.

Tom Denton, the ROMCO Equipment salesman who has called on Lattimore Materials for more than 15 years, said the company values the engineering in Volvo equipment. “Th ey like the loaders and artics,” Denton said. “Th ey like the longevity. We recently had one of their loaders in the shop for some minor work. It had 36,000 hours on it. Th at says something.”

Lattimore recalled his fi rst encounter with Volvo equipment, and how the machines made a lasting impression. It was on a muddy job site, and even some of the empty articulated trucks were getting bogged down. “Th e fully loaded Volvo 40-ton artic trucks went right

Volvo A40D artics haul sand at the LMC sand mine in Ambrose, Texas. At Right: working sand and stone at a rail facility.

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“Volvo loaders and articulated trucks get it done for us. Volvo has done the job we needed and given us value.”

– Vic LattimorePresident and CEO

Lattimore Materials Co.

LMC has in Volvo equipment. “Ninety-fi ve percent of our loaders are Volvo loaders,” Rouse said. “Th ey really work well for us.”

Rouse said the new railhead facility at Melissa — which gets its supply of rock from the LMC quarry in Stringtown, Oklahoma — will eventually move 600,000 to 750,000 tons of material each year. “Th e demand is good,” he said.

Sand mines, crushers, quarriesAt its heart, Lattimore Materials is a

mining company. It blasts and excavates its own raw materials at quarries and sand mines in north Texas and southern Oklahoma.

At the sand plant in Ambrose, Texas, Volvo articulated trucks haul the lion’s share of sand from the mining area to a processing plant a mile across the site. Due to soft ground conditions, the mining is done with a dragline. Sand dug from the site is loaded to the A40D artics in two or three passes. Th e A40s haul the sand across site and dump it for screening and washing.

With temperatures routinely above 100 degrees, this work site can be brutal. Soil with the consistency of talcum powder covers the site, and even walking through it kicks up incredible clouds of dust. Th is poses extra challenges for the equipment on site.

Once the A40s dump the sand into the hopper, a Volvo L180C cleans up, pushing all of the sand down into the hopper, where it is fed to a conveyor belt. Th e sand enters a labyrinth of conveyors and screeners, where it is sifted and cleaned.

At Lattimore’s limestone quarry near Bridgeport, Texas, a Volvo L220E wheel loader is used to move stockpiled rock into crushers for processing. Th e Bridgeport facility is a network of crushers interconnected by conveyors. Blasted rock from the quarry is dumped by a mining truck into a primary crusher, which breaks it down from 48-inch size to 8-inch size.

At the end of the fi rst conveyor, the Volvo L220E loads the stockpile into a secondary crusher for further processing. In often-muddy conditions, the loader’s fi rm footing helps it attack the pile and pull out with full buckets. With outstanding power, the loader climbs a nearby ramp to load the secondary hopper.

Below right: Th ousands of yards of conveyors move material through processing.

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around the stuck empty competitor’s trucks,” he said.

Th e majority of the materials mined, crushed, washed and processed by LMC go into its own ready-mixed concrete, although the company also supplies rock and sand directly to contractors and other ready-mix companies. Its fl eet of GPS-monitored mix trucks delivers concrete to residential building sites, road jobs and civil engineering projects. Lattimore supplied concrete on some of the biggest jobs in recent Texas history.

When retailing giant J.C. Penney built its 1.9-million-square-foot headquarters in Plano, Texas, Lattimore Materials supplied 111,000 cubic yards of concrete for the project. When Fidelity Investments built its 300-acre campus in Westlake, Texas, LMC supplied 80,000 cubic yards of ready-mixed concrete. Lattimore was also the concrete supplier for the 1.5-mile main track at Texas Motor Speedway, with 110,000 yards of ready mix delivered. Th e company also produces concrete for thousands of residential and commercial building pads and structures every year.

Volvo works in the trenchesBefore the concrete mix can fl ow

to construction contractors, the raw materials have to be mined, crushed, sorted and moved. Volvo equipment does a lot of that work for Lattimore Materials.

At LMC’s rail distribution center in Melissa, Texas, a Volvo L180E wheel loader helps move more than 3,000 tons of material each day. Equipped with a 6.3-yard general-purpose bucket, the L180E feeds two hoppers that supply silos in the ready-mixed plant with sand and 1-inch rock from nearby stockpiles. Th rust into the pile, breakout and lift power are important loader features on this task, as is smooth hydraulic control for feathering the loads into the hopper.

Th e L180E also loads rock into 25-ton bottom-dump trailer trucks for transport to other LMC ready-mixed plants or to contractors. Cycle times are crucial to keeping the trucks moving, so the loader’s drive into the pile, lift ability and smooth transmission help ensure full buckets and quick load-out.

Paul Rouse, vice president of concrete operations for Lattimore Materials, said the mere makeup of the company’s wheel loader fl eet speaks to the confi dence

An L180E loads the hopper to the ready-mixed silo, then fi lls 26-ton trailer trucks.

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Lattimore’s 22 Volvo wheel loaders are reliable workhorses, in rock or sand.

Volvo A40D articulated haulers are the prime movers at the Lattimore Materials sand mine in Ambrose, Texas.

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Hands-on leadership styleOne of Lattimore Materials

advantages as a privately held company is the hands-on leadership of its president. Vic Lattimore makes his own equipment purchase decisions, based as much on taking care of employees as anything else. For instance, LMC was one of the fi rst in the industry to specify automatic transmissions on its fl eet of cement mixer

trucks — a premium that pays off long-term dividends in driver recruitment, retention and productivity.

When it’s time to purchase mixers, on-road rock trucks, loaders or artics, Lattimore makes the fi nal decisions. When he needed a piece of mining equipment, Lattimore fl ew to Houston with ROMCO salesman Tom Denton to personally check out the unit before

inking the deal to buy it. “He likes to be very hands on,” said

Connie Boucher, vice president of corporate development at Lattimore Properties, LMC’s sister company. “It allows for more control, and the kind of long-term vision that has served the company so well.”

Denton said he and ROMCO have earned Lattimore’s trust through the performance of the equipment and support from the dealership. “I consider it quite an honor to be an equipment salesman he’ll let into his offi ce,” Denton said.

Working with the best dealerLattimore says he puts Volvo

machines on his job sites because “they stay on the job” and have earned respect from LMC’s competitors. ROMCO, he said, provides outstanding support.

“We have had many years of working with ROMCO,” Lattimore said. “Th ey are one of the best equipment houses.”

As for the his future with the Volvo Construction Equipment brand, Lattimore said “the best assessment is they are machines we keep going back to buy.” l

MIGHTY IRON

Big Challenge,Deep Tunnel

CONVENTION CENTER RUNOFF PUTS ENGINEERS TO THE TEST

CONSTRUCTION MACHINES AT WORK www.mightyiron.com

2 3

Chicago DigsDeep

DEEP-TUNNEL SYSTEM TO SIPHON STORM RUNOFF FROM CONVENTION CENTER TO LAKE MICHIGAN

CHICAGO — One of the world’s largest convention centers is undergoing an $850

million expansion, but one of the most impressive things about the McCormick Place West project is the massive underground system being built to handle storm water runoff from the 27-acre site.

Construction had already started on the McCormick Place expansion in 2004 when the city of Chicago decided it no longer wanted a system that would direct all the clean stormrunoff to water treatment plants, but

to nearby Lake Michigan instead.Reliable Contracting & Equipment

Co. of Chicago was already well along in installing sewers, water, site drainage and telecommunications when the decision was made to empty the site drainage into a deep tunnel.

Even as Reliable and its Volvo EC460B excavator dug and installed piping on the site, engineers were busy designing a 12.5-foot-diameter deep tunnel to direct millions of gallons of clean storm water from the site out to Lake Michigan.

By JOE HANNEMAN / Photos by CHRIS DUZYNSKI

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“We really needed to have a decision early on,” said Gary Schalmo, president of Mc4 West Constructors LLC, the design-build group for McCormick Place West. “It was either tunnel or storm detention. Once the decision was made to make the tunnel we needed to make sure we stuck with it. Once the decision was made there was no turning back.”

A big design change like this could have the potential to cause long delays or budget overruns, but neither happened in this case. Chicago Mayor Richard M. Daley lent strong support, part of his water agenda to reduce pressure on city treatment plants by keeping clean water out of the sewer system.

“It was a huge political accom-plishment to get through the Illinois EPA, the Illinois Department of Natural Resources, the (Army) Corps of Engineers, the Greater Chicago Metropolitan Water Reclamation District and the Lake Michigan Federation all to agree to allow this tunnel,” said Keith Klodzen, an engineer with Mc4 West LLC. “So that happened remarkably fast.”

Chicago’s history of fl ood woesTh e kind of big thinking that inspired

the deep-tunnel system for McCormick Place West has plenty of precedent in Chicago. Built on essentially swampland and now developed with buildings, parks and parking lots, Chicago has often had troubles with fl ooding. In 1997, heavy rains backed up the combined sewers, fl ooding thousands of basements and causing more than $30 million in damage.

Th is is the city that reversed the fl ow of the Chicago River in 1900 from east to west. Th at project was designed to keep effl uent out of Lake Michigan and prevent a repeat of the poisoning of the city’s water intake — which caused waves of cholera and typhoid deaths in the 1880s and 1890s. It was the fi rst river to fl ow away from its mouth.

Chicago is also in the midst of the 40-year Tunnel and Reservoir Plan (“Deep Tunnel”) to store billions of gallons of storm runoff and prevent fl ooding and sewer overfl ow into Lake Michigan and area rivers.

Chicago is one of 750 communities in the United States with combined

sanitary/storm sewer systems. In Cook County, Ill., alone, there are 51 communities with combined sewers. When heavy rainfall occurs, storm water can fl ood the system, causing overfl ows into the city’s canal system or even into Lake Michigan. Th is type of overfl ow— which spills into U.S. waterways at an estimated volume of 850 billion gallons a year — can contain a wide range of pathogens and threaten the health of those who use the waterways.

Unveiled in 2003, the city of Chicago’s water agenda has taken a multi-prong approach to preventing overfl ow from reaching area waterways like the long-polluted Chicago River. One strategy is

to spend more than $50 million a year upgrading and cleaning the 4,400 miles of city sewer lines. Th e second is the Deep Tunnel, began in the 1970s to carve 109 miles of underground storage to capture billions of gallons of combined sewer overfl ow during heavy rains. Th at system will be complete by 2017.

Recently, residents have been encouraged to disconnect downspouts from the sewer system, and more than 200,000 restrictor valves were installed in street catch basins to control storm fl ow into the system. Th e city is also encouraging construction of rooftop gardens to capture rain runoff .

“By expanding our use of green

infrastructure, Chicago can demonstrate the common-sense approach of man-aging storm water before it reaches the sewer system,” Daley said when unveiling his water agenda.

Th e plan is to have McCormick Place West achieve LEED® certifi cation from the U.S. Green Building Council. Th e Leadership in Energy & Environmental Design (LEED) rating system recognizes sustainable site planning, safeguarding water, water effi ciency, energy effi ciency and renewable energy, conservation of materials and indoor environmental quality. In 2004, Mayor Daley announced all new public buildings in Chicago would be LEED certifi ed.

Keeping Chicago competitiveMcCormick Place West is badly

needed for Chicago to stay competitive with Las Vegas, Orlando and other cities in attracting and keeping major trade shows. Th e city has set goals to not only expand its convention space, but also to control costs and combat a reputation as a high-cost venue.

McCormick Place’s main exhibit halls consistently run above practical maximum capacity. Th e expansion will make more convention dates available, create a balance of meeting and exhibit space, attract smaller meetings when the main facilities are booked, and add to the multi-billion-dollar impact conventions

have on the city each year.“Th e convention and tourism industry

contributes more than $8 billion a year to the local economy and generates more than 128,000 jobs throughout the metropolitan area,” Daley said. “If it doesn’t remain strong, the economy of the Chicago area and the entire state of Illinois will suff er. We will lose jobs. And we will lose revenue. We can’t aff ord to lose either.”

McCormick Place West will add 470,000 square feet of exhibition space, 250,000 square feet of meeting space, with 60 meeting rooms and an impressive 100,000-square-foot ballroom.

Storm runoff presents challengesTh e expansive roof and the truck

docks will collect millions of gallons of runoff during heavy storms. Th is posed a big design challenge for facility planners. When the original RFP was published, the plan was for an underground detention system to hold runoff until it could be released into the sanitary sewers.

Utilities construction on the McCormick site was already underway in 2004 when the mayor’s administration said it wanted the storm system to empty into Lake Michigan instead of going to sewer treatment plants.

“Being in relatively close proximity to Lake Michigan, there was strong incentive on their part to try and get all of the runoff from this 26-acre roof to Lake Michigan, because that roof has essentially clean runoff ,” Klodzen said. “Th at’s where the storm-water tunnel came in.”

Th e water-diversion system for the facility is designed to handle runoff from a 100-year fl ood. But it’s not as simple as piping rainwater into Lake Michigan. Runoff from the 3.5-acre truck delivery dock and parking areas must be diverted to the sanitary sewer.

Th e city’s plan called for a tunnel for the clean roof runoff , but the water from the truck docks and parking areas must be subject to a “ fi rst fl ush” where the initial run-off is sent to a water treatment plant.

“After that fi rst fl ush, all the contaminants have theoretically been washed away and the overfl ow is then clean and can go to the lake,” Klodzen said.

Th e massive 27-acre expansion of McCormick Place posed signifi cant challenges on how to control storm runoff and keep it from the overburdened sewer system.

(continues)

4 5

7

Tunnel to run through bedrockOpen excavation or even a shallow

tunnel would run into old urban fi ll, building pilings, old terra cotta piping and more.

“Obviously if you’re going to dig a tunnel, you want the shortest route possible,” Klodzen said. “Well, to go under buildings, the most logical thing then was to go down into the rock. Th at way we did not have to worry about any interference with the foundations for existing buildings.”

Th e tunnel will run 3,385 feet from the outfall at McCormick Place West to Northerly Island (site of Chicago’s former Meigs Field airport). It will run about 150 feet below ground level. STS Consultants of Chicago designed the tunnel for Mc4 West Constructors and will build it utilizing a 12 foot 6 inch Robbins M81218-304 tunnel-boring machine.

“Th e boring machine makes a huge diff erence in the capacity of the tunnel, because it creates a much smoother surface,” Klodzen said.

To build the deep tunnel, a 22-foot-diameter shaft will be dug on the east end of the tunnel route. Digging will proceed west to another shaft on the McCormick Place West site. Th e rock and earthen spoil will be used for landscaping on Northerly Island, which

the city is transforming from its former use as a single-strip airport for private aircraft into a 75-acre park.

Th e tunnel pipe itself will be unlined. Th e inlet shaft will be lined with reinforced concrete, while the outlet shaft will be lined with cast-in-place concrete. It will work as an inverted

siphon to force storm-water from the convention center to the lake at a maximum fl ow rate of 500 cubic feet per second.

“It’s permanently full of water at the elevation of the lake,” Klodzen said. “Th e head diff erence between our water coming in and the lake level forces it through to the lake.”

Designers had to ensure the outfall at Northerly Island would not cause signifi cant lake currents that could disrupt boat traffi c at the narrow opening of Burnham Harbor, Klodzen said.

Tunnel required utilities changesEngineers decided to add three new

pump stations after the tunnel concept was approved. With the fi rst-fl ush contaminated runoff going to the sewer for treatment, positive pressure was needed to keep the sewers from backing up.

Bob Borello, utilities superin-tendent for Mc4West Constructors, said the tunnel did not require a redesign of the new sewer system being built along Prairie Avenue, the major utility corridor in the area. But some elements that connect into it, such as bottom-elevation inverts, had to be changed.

Borello credits the subcontractor, Reliable Contracting, with keeping

Reliable Contracting & Equipment Co. installed site utilities, including storm drainage running to the deep tunnel.

Utilities excavation kept things moving.

(continues)

6

construction moving smoothly despite the design changes. Reliable kept ahead of the foundation contractor while relocating existing utilities, building a new utility corridor along Prairie Avenue and installing new piping for sanitary, water and drainage.

Reliable also had to dig carefully around existing telecom lines, some of which were housed in fragile, old terra cotta conduit. Excavators also encountered some old urban debris such

as brick sewers, railroad ties and more.“On Cottage Grove, remnants of an

old trolley line were still down there,” Borello said. “Th e tracks, the ties, the whole thing. Electric cabling — everything was still in there.”

Klodzen said a parking garage adjacent to McCormick Place West also had to be tied into the storm-runoff system. Designers had to replace the planned rooftop detention system in the parking garage and direct fl ow of runoff into the site’s drainage system.

“If we would have allowed all this water that could have overfl owed from the garage into our sanitary sewer, the sanitary sewer capacity would have been eaten up by the rainfall,” Klodzen said. “We had to make sure we collected it all.”

Th e tunnel has capacity to hold a 100-year-storm runoff from up to 61 acres, Klodzen said. Th at means it could hold runoff from more of the McCormick Place site, although no decision on that has been made.

“It’s a big deal. It was a major accomplishment. It’s a very positive thing, because it takes a huge load off the existing sewer system,” Klodzen said. l

“It was a major accomplishment. It’s a very positive thing, because it takes a huge load off the existing sewer system.”

McCormick Place West’s massive roof will generate a big supply of storm runoff .

Th e storm drainage system that will link to the deep tunnel includes pump stations that will prevent backfl ow problems.

8

Articulated Haulers, Scrapersand the Future of Earthmoving

IRONINTELLIGENCE™ BRIEFINGAN

2 S T R A T E G I S O N E L L C

SECTION

1 The Contractors

S T R A T E G I S O N E L L C 3

Long-Term Vision, Long-Term SuccessWith global leadership and deep heritage with articulated haulers, Volvo looks to the next decade and beyond for its ‘rolling iron’

PROGRESS. At its heart construction is all about moving the world forward. More

than 7 million workers and nearly $1.2 trillion put behind U.S. and Canadian

construction each year aim to make life better for a growing society. At its heart,

Volvo Construction Equipment is also about progress. It’s very name, volvo, means roll

forward or roll on. It’s brand mark, the atomic symbol for iron, creates a strong image of

Volvo equipment as “rolling iron.”

With its 40-year heritage building off-road articulated haulers, Volvo is looking forward

to the next generation and beyond. Will the role for articulated haulers change in

10 years? Will earthmoving practices dictate need for a different kind of machine?

Will changing use of other equipment such as scrapers create opportunity for Volvo?

Where is the construction economy headed, and how will it affect demand for off-road

haulers? Is Volvo doing all it can to innovate with technology and customer-focused

equipment?

With those weighty questions as the backdrop, Volvo set out to learn how contractors

and owners of earthmoving equipment see the future. Those on the front lines are

closest to the applications, the trends and the changes. What do they see? Will the

artic hauler play a larger role in North America? What will happen with self-propelled

scrapers and pulled scrapers? Will some other machine concept come into play?

To sample the voice of the customer, Volvo commissioned in-depth interviews with

contractors in four major American markets:

• HOUSTON, TEXAS — With a metro area population of 5.3 million, this

market spans eight counties and is home to Fortune 500 companies including

ConocoPhillips, Marathon Oil, Halliburton Co. and Waste Management.

• ATLANTA, GA. — The capital of Georgia, Atlanta is the heart of a metropolitan

area with 4.7 million people in 28 counties. It is home to business giants including

Coca-Cola, Home Depot, Delta Airlines and United Parcel Service (UPS).

• DETROIT, MICH. — The Detroit metro area includes 4.3 million people, many

of whom hold jobs related to the auto industry. Birthplace of the Ford Model T, the

Detroit area is home to the Ford Motor Co., General Motors and DaimlerChrysler.

• SANTA ANA (ORANGE COUNTY), CALIF. — The county is home to 3 million

people and part of the huge Los Angeles metro area (population 10 million). Major

businesses include Disneyland, Boeing Co., Albertson’s and Bank of America.

Introduction

�

Georgia

Atlanta

�Texas

�

California

Orange County

Michigan

�Detroit

The Study: Interviews Yield a Depth of Information

To sample the thoughts and opinions of earthmoving customers, Volvo had numerous

traditional avenues at its disposal, including a traditional phone survey, mail survey,

Web-based survey and local focus groups. We chose a different type of qualitative

research, the one-on-one interview, in order to delve into the issues with depth.

Participants were recruited from lists of Volvo artic hauler customers and from a

database that identified equipment owners from Universal Commercial Code (UCC)

filings. This two-source strategy covered contractors who buy equipment with cash, and

those who lease or otherwise finance equipment purchases.

Recruitment lists included buyers of nearly all major brands of articulated haulers,

owners of Caterpillar and Terex self-propelled (motorized) scrapers, and contractors

who use pull-behind scrapers. The pool was a thorough cross-section of the

earthmoving, hauling and land-development segments in each market.

Seeking trends and insight

The major goal of the interviews was to look for trends in where the earthmoving

business is headed over the next five to 10 years. We asked each participant about

their current and future business levels, and if they see shifts in how equipment is used

by their own firms or competitors. We asked about preferred earthmoving methods in

each market and what might cause changes in tactics or equipment.

We talked about equipment performance, maintenance and cost of operation. The

interviews included discussion of operator training, non-traditional or unorthodox use of

machines, acquisition strategies and many

other topics. The yield — more than 30

hours of videotaped interviews that would

fill hundreds of transcribed pages — forms

the core information for this report.

Our four market locations had different

market conditions and dynamics:

• HOUSTON — Texas is a wide-open

construction market with strong activity

in highway, residential and commercial

building. Artic haulers, dedicated scrapers

and pull scrapers are all common here.

• ATLANTA — Much of the construction activity has moved into the sprawling suburban

areas from the city. Contractors are facing more rock and muck on construction sites

since most of the “good” land has been developed. Robust economic activity.

Interviewees included

business owners,

foremen, fleet

managers, business

managers, operators,

a union steward

and maintenance

directors.

The videotaped one-on-one

interviews yielded the kind

of deep information that is

not practical with a survey

and not possible using

other ‘traditional’ methods

such as focus groups.

▲

Introduction Introduction

4 S T R A T E G I S O N E L L C S T R A T E G I S O N E L L C 5

Executive Summary Contractor Interviews

8 S T R A T E G I S O N E L L C S T R A T E G I S O N E L L C 9

When the going gets tough …Strong recognition of the artic hauler’s command of messy conditions, although some contractors see the hauler as only a specialty player

IT WAS QUITE AN EFFECTIVE DUCK WALK. Jim Hiltscher remembers the

conditions well. It was a de-silting job in a drainage channel in Los Angeles. The

articulated haulers at work on the job had to travel right through, with water and

muck up to the axles. The artics simply duck-walked right out.

“They literally walked through water,” said Hiltscher, general superintendent at LT

Engineering & Excavating. “They’re amazing. They’ll go anywhere. They really will. They’ll

go through wetter stuff than most people would realize. They would almost swim.”

Robert Ings has a similar story cleaning out drain tunnels. “The six-wheel just walked

around anything else,” said Ings, maintenance director for the storm-water division of

United Pumping Services, City of Industry, Calif. “You know, you could never put … a

769 or any other kind of truck in there. You know, the Volvo, it was like it wasn’t even

there. You just pushed on the pedal and away you went.”

In our interviews, there was nearly unanimous agreement that the artic is the best

option for moving dirt and other material across soft, unstable ground.

David Walker, equipment manager at Brad Cole Construction Co. near Atlanta, said

reliable uptime is what sets artic haulers apart. “You want that thing to be able to go

in any condition and still do the work. And we know we can rely on those things,”

Walker said. “If it’s dry, they’ll go. If it’s wet, they go. If it’s terrible conditions, you can fix

it where they can go. Whereas with a scraper, things have to be near perfect to make

that happen.”

Chris Jeffares, a union steward and equipment operator at the International Union of

Operating Engineers in Atlanta, said artic haulers show their stuff the best on “real wet

jobs where you couldn’t get a scraper and a dozer in there.”

“You could get the track hoe or the excavator in there and start loading out the mud

and they could haul it and get around where the scraper would never be able to go,”

Jeffares said. “Even the double-barrel scrapers couldn’t go where these things would

go. It just made life a lot easier and faster.”

Even contractors who don’t often run off-road haulers will rent them if job conditions

get too severe for scrapers. “I couldn’t do without trucks – without a doubt. Just

couldn’t do without them. And there is always that time when you need more,” said

Doug Anglin II, operations manager for Jack Anglin Civil Contracting in Novi, Mich. And

that’s saying something, because Anglin runs 21 dedicated scrapers from Cat 627s to

Cat 657s. Anglin isn’t shy in his preference for scrapers. But he doesn’t see it as an

either/or thing.

TOPIC

#1

Robert Ings

Doug Anglin

The Strong Haul

Chris Jeffares

Contractor Interviews Contractor Interviews

10 S T R A T E G I S O N E L L C S T R A T E G I S O N E L L C 11

“I WOULD NEVER HAVE TO CHOOSE BETWEEN ONE OR THE OTHER because I

think to really make a company profitable, have the trucks available when you have that

specialized job,” Anglin said. “When you have a wet job or so many different variables

— use the trucks. But when you’re ready to move the dirt — big dirt — you’ve got to

use the scrapers. It goes right back to having the right equipment for the job.”

Villy Pedersen, equipment manager for A L Grading Contracting Inc., Suwanee, Ga.,

said his firm’s artic haulers show their value by performing in soil conditions “where the

scrapers are just about impossible to use.”

“It’s a brilliant piece of machinery and it takes a lot of abuse,” said Pedersen, who

oversees 10 Cat scrapers, two Cat artics and six Volvo haulers. “Oh we use them. I

know we use them every day because if one breaks down, they’re on me like a wet

blanket.”

Roger Pullian, equipment manager for Reeves Ditching & Contracting in Buford, Ga.,

said articulated haulers can work more days of the year, access difficult-to-reach areas

and traverse rough haul roads that would stop other equipment.

“You can run them on a much steeper slope, up a steeper incline, than you could a

scraper. You can have a lot rougher haul roads,” Pullian said. “With a scraper, you’ve

got to have a really nice haul road and you’ve got to keep in maintained. Much more

than you do an articulated dump. Get into any rock, it shuts down scrapers. Articulated

dumps with an excavator — you can dig through just about anything.”

At California contractor Yeager Skanska, articulated haulers are a fairly recent addition

to the fleet. Equipment Manager Jeff Buckmaster said they have carved a place in the

fleet, even without being called to haul in

muddy conditions. “We’re using them for

rock, but we haven’t got any jobs in real wet,

mucky stuff here,” Buckmaster said. “I know

that’s probably what they’re good for, but we

don’t have any wetland jobs that we need

them for. But they’re great – they’re fast,

they’re smaller than our rock trucks. The six-

wheel drive helps out. In loose material, they

work out real good.”

For levee builder Affolter Contracting, La

Marque, Texas, many jobs are just made

for artic haulers. “We have certain jobs that

they just require off road trucks,” said Terry Affolter, general partner. “And we’re working

a lot of times with spoil areas for dredging. And it’s a soft ground out there that you’re

dealing with. That’s the reason we go with off road trucks.”

“It’s a brilliant piece of

machinery and it takes a lot

of abuse. Oh, we use them.

I know we use them every

day because if one breaks

down, they’re on me like a

wet blanket.”

TOPIC

#1The Strong Haul

Villy Pedersen

Roger Pullian

Terry Affolter

Growing volvo's Key AccountsConstruction, Extraction and Waste

IRONINTELLIGENCE™ BRIEFINGAN

S T R A T E G I S O N E L L C 3

IRONINTELLIGENCE™ » VOLVOKEYACCOUNTS

WITH THE U.S. ECONOMY BOOMING, the fortunes of companies that use construction equipment are rising — often to record levels. This growth spurs demand for

new equipment and replacement of aging fleets. The conditions and timing are right for Volvo to look at expanding its key-accounts business. With Volvo’s existing strengths in the waste, extraction and construction sectors, it makes good sense to focus a search for prospects in those areas. But how can we narrow the search? There are hundreds of contractors to look at, so we used some key indicators to craft prospect lists for Volvo.

1) Work in the segment 2) Revenue 3) Fleet size

Using dozens of financial sources, industry ratings and trade databases, we compiled the prospect lists on this page. Then we analyzed each firm and condensed the information into dossiers that form the core of our report. Each section starts with an analysis of the market segment, followed by individual company reports.

Forging smart growthExpanding Volvo CE’s key accounts starts with fresh look at the market’s big players

COMPANY SALES

Waste Connections Inc. $722 million

Clean Harbors Inc. $711 million

Covanta Energy Systems $700 million

WASTE SEGMENT

COMPANY SALES

Nucor Corp. $12.7 billion

Commercial Metals Co. $6.6 billion

Harsco Corp. $2.8 billion

OmniSource Corp. $1.8 billion

Metal Management Inc. $1.6 billion

Tube City LLC $1.0 billion

Schnitzer Steel Industries $853 million

SCRAP SEGMENT

COMPANY SALES

Rinker Group Ltd. $5.1 billion

Vulcan Materials $2.8 billion

Hanson Aggregates NA $1.8 billion

Florida Rock Industries $1.15 billion

Ash Grove Cement Co. $921 million

Eagle Materials $860 million

APAC/Ashland* $760 million/$2.5 billion

U.S. Concrete $576 million

EXTRACTION SEGMENT

COMPANY SALES

Jacobs $5.6 billion

APAC* $2.5 billion

J.F. Shea Co. Inc. $3.5 billion

CH2M Hill Companies $3.1 billion

PCL Construction Group $2.9 billion

Granite Construction Inc. $2.6 billion

Clark Construction Group $2.6-$2.9 billion

Austin Industries $1.36 billion

Balfour Beatty $653 million

Williams Brothers Construction $568 million

HEAVY/CIVIL CONSTRUCTION

* Also cross-listed under Extraction Segment

* Also cross-listed under Heavy/Civil Segment. Figures shown are for aggregates/total revenue.

2 S T R A T E G I S O N E L L C

S T R A T E G I S O N E L L C 5

IRONINTELLIGENCE™ » VOLVOKEYACCOUNTS

Analyzing the prospect companiesSeparating the cream from the crop requiredextensive research and dissection of financials

SALES REVENUE Revenue in most recent year and up to five years. Sales is a major driver of profitability.

NET PROFITS Operating income is more telling than sales revenue, as it indicates financial management.

EMPLOYMENT SIZECan indicate who subcontracts most work, and might show if a company is highly automated.

FACILITIES AND LOCATIONSNumber of plants, production facilities or regional-local divisions. Indicates market coverage.

CURRENT RATIO Current assets divided by current liabilities. Indicates liquidity and ability to meet obligations.

DEBTShort-term (payable within one year) and long-term (more than one year). Indicates ability to invest.

TOTAL ASSETS AND LIABILITIESShort-term (payable within one year) and long-term (more than one year). Indicates ability to invest.

MACHINERY AND EQUIPMENTValue of vehicles, work machines or other equipment used in the course of business.

ASSET DEPRECIATIONValue or useful life of equipment. Accumulated depreciation indicates need for fleet upgrade.

RECEIVABLES AND INVENTORIESAmount owed from customers for goods and services; materials or work in progress.

ACCOUNTS PAYABLEAmounts owed for goods and services. An indicator of sound financial management.

COST OF SALESCost to produce finished product/service relates to fiscal management and market conditions.

EQUIPMENT PURCHASE POTENTIALBased on assets and depreciation, an estimate of coming needs for machinery and equipment.

CAPITAL SPENDINGAmount expended for property, plant and equipment. Shows management of assets.

POINTS OF COMPARISON

T O DEVELOP THE COMPANY LISTS AND DOSSIERS on the following pages, we gathered thousands of pages of information from proprietary databases, reviewed extensive trade media

coverage and analyzed detailed financials from public and private sources for each company. Our goal was to separate the well-run companies with good potential from the riskier ventures.

One important key to this report is to understand what it is not:

• It is not a stock analysis. We did examine current-quarter SEC filings for public companies, but our focus was more of a high-level view of company operations aimed at gauging long-term potential. Analysis from brokerage houses tends to focus on the current and coming quarters. Most of our detailed financial analysis was based on audited annual reports for publicly held companies, and credit filings such as Dun & Bradstreet for private firms.

• It is not a simple revenue-based ranking. We did use annual revenue as a major determinant, but you will notice our lists differ from those published by trade magazines and research services like Standard & Poors or Hoover’s. Standard Industry Classification (SIC) codes are not applied consistently across sources, so we looked beyond that to the kinds of work each company does in different market segments.

The company dossiers differ slightly in depth and presentation depending on whether a company is publicly traded or privately held.

Public companies must file detailed financial reports, so our sources for these firms were much broader and deeper. While classified as private, employee-owned concerns often must file annual reports with the Securities and Exchange Commission.

Family-owned firms or those held by small groups of individuals have no public disclosure burden, so our research task was much more difficult here. For these firms we gathered all publicly available data and supplemented it with a Comprehensive

Insight Plus report from Dun & Bradstreet. A few firms were so tight with information we were not able to make an informed analysis.

OUTLOOK:NEGATIVE

OUTLOOK:NEUTRAL

N

OUTLOOK:POSITIVE+

Each company’s financial indicators was assigned a positive, neutral or negative rating, then the company was given an overall score (below).

+ –N

–

4 S T R A T E G I S O N E L L C

S T R A T E G I S O N E L L C 7

Volvo Construction Equipment is used in a variety of waste applications,

including this waste-handling excavator operating at a transfer station near

Washington, D.C. Wheel loaders are used for loading trucks and stockpiling

trash. Articulated haulers are excellent tools for carrying daily-cover materials

to the top of active landfills. And several types of Volvo equipment are used in

building new landfills or expanding landfill cells.

T AKE A CLOSE LOOK INSIDE a waste transfer station, your local landfill or a recycling center. What you see — and smell — may seem like ordinary trash. For the trained

eye, it's not hard to see past the trash to the color and scent of money. Big money.

Market SummaryMore than 18,000 U.S. companies are involved in waste management and remediation. They collect, treat and dispose of waste materials ranging from recyclable cans and bottles to municipal solid waste to hazardous materials. With about $51 billion in revenue per year, this sector includes materials-recovery facilities (MRFs), waste-transfer stations and waste-collection operations. More than 1,500 establishments operate solid-waste landfills and bring in $5.3 billion a year. In the U. S., revenue grew more than 5 percent each of the past two years.

The market has been characterized by mergers and acquisitions, with such names as Waste Management, Browning Ferris Industries (BFI), Sanifill and Laidlaw acquired by or merged with other firms. Mature markets and rising costs have pushed companies to look to smaller, less-competitive markets for revenue growth. Major players in this industry have sought to modernize fleets and increase internalization rates to help offset the rising cost of fuel.

SegmentationSolid waste management accounts for nearly 52 percent of environmental services business, followed by consulting and engineering (23 percent), remediation (13.5 percent) and hazardous waste management (9.5 percent). The United States is the largest producer of garbage, accounting for some 40 percent of the world's waste.

Current Volvo customer Waste Management Inc. is the world's largest waste firm, with 51,000 employees and annual revenues exceeding $12.5 billion. Other key players include Allied Waste Industries, Republic Services, Veolia Environmental (formerly Onyx) and Waste Connections.

WASTE HANDLINGVolvo CE has waste market well covered; a few major players dominate the industry

COMPANY SALES

Waste Management Inc. $12.52 billion

Allied Waste Industries $5.73 billion

Republic Services $2.73 billion

Veolia Environmental* $850 million

Waste Connections Inc. $629 million

Clean Harbors Inc. $610 million

Covanta Energy Systems $560 million

Stericycle $516 million

Casella Waste Systems $482 million

KEY INDUSTRY PLAYERS

NAICS CODE 562111 Solid Waste Collection

SIC CODE 4953Refuse Systems

* Onyx North America changed its name in early 2006 to better reflect its corporate parent, Veolia Environnement.

IRONINTELLIGENCE™ » VOLVOKEYACCOUNTS

WM AWI RS

Landfills 286 166 58

Percentage of land-fills closing within 10 years

21 27 NA

Landfill capacity (billions of tons)

4.7 2.5 1.5

APPETITE FOR WASTE

▲

6 S T R A T E G I S O N E L L C

S T R A T E G I S O N E L L C 21

“SCRAP RECYCLING FACILITIES ARE LIKE MINES above the ground, rich with resources.” That’s how Indiana-based OmniSource describes the business

of recovering steel, aluminum and other metals and making new products from them. Driven by big demand from China and Turkey, these modern-day “miners” are busy, pushing the steel-recycling rate to an all-time high at 75.7 percent.

Market SummaryMore than 8,500 U.S. companies and 30,000 workers participate in some way in the U.S. scrap industry. Construction, consumer products and vehicle manufacturing depend on scrap as a crucial raw material. Two of every three pounds of steel used in manufacturing is from recycled content. American manufacturing is built around a reliable steam of scrap metal. Sales of scrap metal in 2005 reached $12.6 billion, a 32 percent increase from 2004. Scrap is a desirable raw material, since remelting is much cheaper than producing metals from virgin ore.

The scrap industry has been prone to erratic pricing. During 2004 and 2005, scrap prices swung from $159 per ton to $247 per ton, while current prices are as high as $255 per ton. Prices for scrap copper have more than doubled in the past year to $2.60 per pound. Demand and increased prices are blamed for a rash of thefts of copper wire, copper piping, bronze cemetery vases, aluminum siding, air-conditioner tubing and other materials.

Consolidations include the 2005 merger of Sims Group and Hugo Neu Co., and recent acquisitions by OmniSource and Metal Management.

SegmentationMore than 17 million vehicles were shredded in 2005 to produce 13 million tons of scrap. There are 200 vehicle-shredding firms in the United States and 12,000 vehicle dismantlers. Automobiles are recycled at a rate that exceeds the steel produced for new vehicles. Nearly 100 percent of discarded construction plates and beams, and 63 percent of rebar, are recycled. More than 4.1 million tons of aluminum are recycled each year.

SCRAP RECYCLINGGlobal demand for steel drives markets; prices make scrap a big target for theft

COMPANY SALES

Nucor Corp. $12.7 billion

Commercial Metals Co. $6.6 billion

Harsco Corp. $2.7 billion

David J. Joseph Co. $2.0 billion

Sims Group $1.9 billion

OmniSource Corp. $1.8 billion

Metal Management Inc. $1.7 billion

Gulf Coast Metals Co. $1.4 billion

Tube City LLC $1.0 billion

Schnitzer Steel Industries $853 million

KEY INDUSTRY PLAYERS

NAICS CODES423930, Recyclable Material Merchant Wholesalers

562920, Materials Recovery Facilities

SIC CODE 5093, Scrap and Waste Materials

IRONINTELLIGENCE™ » VOLVOKEYACCOUNTS

Steel & Iron 70 million tons

Aluminum 4.1 million tons

Copper 1.5 million tons

Lead 1.4 million tons

U.S. SCRAP PRODUCTION

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Without the recovery of 70 million tons of steel each year by recycling, North

American manufacturing would grind to a halt. Processors of scrap metals

use excavators, loaders, skid steers, material handlers and other machines

to collect, sort, move, shred, bale and otherwise process material. Primary

sources are automobiles, appliances, aluminum cans and construction debris.

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S T R A T E G I S O N E L L C 23

Nucor CorporationWith operations in 17 states, Nucor is a toprecycler — and producer — of steel products

W ITH OPERATING FACILITIES IN 17 STATES, Nucor is the largest producer — and leading recycler — of steel in the United States and the largest of the “mini-mill” operators.

Mini-mills use electric arc furnaces to melt scrap steel, as opposed to traditional blast furnace technology. Nucor produces such products as carbon and alloy steel bars, beams, steel joists, girders and fasteners and recycles more than 17 million tons of scrap steel annually, with five million of those tons being automobiles.

Business DescriptionFounded by Ransom E. Olds, father of the Oldsmobile, Nucor floundered for a few years before entering the steel-making business in the 1960s. Since then, the company has revolutionized the industry by adopting new technologies and technologies for processing steel.

Nucor also makes headlines for its decentralized management philosophy - there are only four employee levels - and a mere 66 employees work at the Nucor corporate office, possibly be the smallest number of corporate office employees among major corporations. Nucor is highly opposed to unions - none of the Nucor plants are unionized - believing them to be the demise of the U.S. steel industry, and as of April 2006 no Nucor plant has held a successful union certification election.

Key Competitors• Mittal Steel Company• Commercial Metals• United States Steel Corporation

Mergers and Acquisitions• Trico Steel Co.’s sheet-mill plant in Alabama, $117.7 million• Birmingham Steel Corp., four bar-steel plants, $615 million• Fort Howard Steel Inc.’s Wisconsin plant, $44.2 million

Financial Summary• Major growth through acquisitions• Rock-solid financials• Major capital, M&E needs• Solid cash position supports spending

2005 Revenue $12.7 billion

Revenue Trends 1 yr + 12%4 yr + 165%

Employees 11,500

Locations 17 states

Current Ratio 3.24

Long-Term Debt $922 million

Total Assets $7.1 billion

Capital Spending $5.5 million

BY THE NUMBERS

REVENUE TRENDS

2001

14

12

08

04

$ B

illio

ns

2002 2003 2004 2005

Nucor Corp.2100 Rexford Road

Charlotte, NC 28211

Daniel R. DiMicco, president and CEOwww.nucor.com

OUTLOOK:POSITIVE

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IRONINTELLIGENCE™ » COMPANYREPORT

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Ownership: PublicSymbols: NUE

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betterdiggingVolvo Construction Equipment

janes gravel digs volvo’sbucket designBrian Etchison had one problem with the excavator buckets being run at RE Janes Gravel Co. in Merkel, Texas. None of them could stand up to the abrasive conditions at Janes’ sand and gravel mine. “Every bucket we’ve had we destroyed,” said Etchison, vice president at RE Janes. “Just because of the nature of what we’re doing.” So when Volvo approached Etchison with its new bucket, he was ready to put it to the test.

“Our material is really abrasive. It’s fairly hard breakout,” Etchison said. “I can take you to several buckets that we’ve had on different excavators. We’ll actually break them. We sometimes will break a lip completely off the bottom of a bucket. We’ve split them up the middle.”

Janes Gravel uses a Volvo EC460B excavator in what is essentially a strip mining opera-tion about 30 miles west of Abilene. The material is hard, densely packed sand and gravel, mixed with conglomerate and clay. The excavator loads 80-ton belly-dump haulers, which take the material for nearby process-ing and eventual use in ready mix concrete. “It’s definitely not an easy environment for a machine to dig,” Etchison said.

So after losing two buckets to the extreme conditions, Etchison was all ears when ap-proached about a new 3.6-cubic-yard bucket by Walter Reeves, attachments manager for

Volvo Construction Equipment. “When he was telling me about this bucket before it arrived,” Etchison said, “he was drawing it on a napkin for me and showing me. He said, ‘You’re going to have better success with this shape.’ And it is a better shape.”

A new shape, a new approachWith a low profile and curved shape, Volvo’s new buckets have optimized cutting edges, heavy fabrication and self-sharpening teeth. The design of the bucket floor makes it easy for material to flow into and fill the bucket with no air gaps. Anti-abrasive side cutters and lip plating give the buckets exceptional wearability.

“These are made to load easy and dump easy,” Reeves said. “This penetrates nice and easy. The material just flows right out of the bucket. It improves your cycle times.”With the new Volvo bucket installed on the EC460B excavator, the company adopted a

new approach to digging. Instead of using the excavator’s breakout power to extract the material, the operator uses the teeth to penetrate, then pulls the bucket nearly flat toward the excavator. Material marches into the bucket without the boiling that can cause air pockets and incomplete fills. As the bucket comes up out of the hole, it cradles the material without requiring extreme curl of the bucket. Less curl means less machine wear and quicker dumps.

“The shape is the main thing that protects the linkage,” Etchison said. “because the material enters the bucket more easily than a deeper, taller bucket. In the past I thought a more nar-row bucket that was deeper and taller would have less surface area to cut the material and would not have a negative impact on the linkage. But the wider more shallow, more curved shape of this bucket, I think it’s a bet-ter design for this.”

RE Janes Gravel found the shape of Volvo’s new buckets a good match for its abrasive sand and gravel.

more care. built in.Volvo Construction Equipment www.volvoce.com

“The shape of this bucket is a better shape. Our operator says it’s definitely easier to load the Volvo bucket than the others.”Brian EtchisonRE Janes Gravel Co.

Volvo buckets:quick fills, less wear

more care. built in.Volvo Construction Equipment www.volvoce.com

With a deeper, taller bucket, material is more likely to stick, causing the operator to bang the bucket in its full open position in order to dislodge the material.

Working in extreme conditionsRE Janes Gravel Co. is one of the largest suppliers of sand and gravel in Texas. The U.S. Geological Survey lists the company in its national directory of the principal suppliers of sand and gravel. While the company oper-ates three mining operations in Texas, it is the Merkel facility that has the most extreme digging conditions.

“It’s very densely packed sand and gravel. Its a fairly dirty deposit, so it’s got a lot of clay in it,” Etchison said. “There’s some conglomer-ate. As far as abrasiveness, in the pits we have throughout the company, we go through a lot of scraper teeth and things like that just getting down to the deposit. When you get down to the material you can process, it’s very abrasive. You go through teeth very quickly.”

The Volvo EC460B operates at least 10 hours per day loading the haulers and also maintain-ing the pit. “The excavator is loading trucks that bring the material to the plant. That’s the primary function of the excavator,” Etchison said. “The excavator’s a useful tool to be used in other places for repair days. It might dig a ditch or two, but its primary function is in hard digging. It is the central machine to the opera-tion, so Janes Gravel cannot afford downtime from damaged buckets.

“You’ll see on the Volvo bucket where it kind of wraps around, it has a wear plate that’s actually a part of the bucket that’s kind of a shoulder down the sides,” Etchison said. “Where a lot of other buckets are put

Brian Etchison likes Volvo bucket performance.

together right there at that corner, and all that is is stick weld. Once you get to that weld it’s going to crack apart. Volvo’s just seems to be a better design in that position.

“I think it’s a good bucket. Overall it’s perform-ing well. It’s the right shape bucket. They are going in the right direction.”

The Volvo bucket makes penetration, then is pulled into the material and fills smoothly. After filling, the bucket cradles the material and is ready for dumping.

‘Were have something here’The way Rick Leaverton sees it, RE Janes Gravel Co. is really onto something with the new Volvo excavator bucket. “We have something here with this Volvo bucket,” said Leaverton, sales manager with Associated Supply Co. (ASCO), the local Volvo dealer in West Texas. “It’s a good bucket. It has great features. It’s exciting to see it work so well for a key customer.”

Volvo’s new line of excavator buckets includes general purpose models for soft to medium materials, heavy duty versions for gravel or clay, rock buckets for sharp, fractured materi-als, ditch-cleaning buckets and extra perfor-mance (XP) buckets with a unique curved floor and self-filling design.

Walter Reeves, attachments manager for Volvo Construction Equipment, said one of the keys to the buckets is how the teeth pen-etrate the material without over-stressing the bucket lip. “If you eat a sandwich, you eat it with your teeth, not with your lips.”

A customer’ssuccess storyVolvo Construction Equipment

tough rock,stout hammer.The extremely hard rock that Gorham Sand & Gravel must break up and remove from its job sites gets so hot while being pounded by a hydraulic hammer that any grease that drips from the attachment starts on fire when it hits the rock. These extreme conditions on Gorham’s underground construction jobs might leave you wondering what gets more punish-ment – the rock or the hammer. As company co-owner Jim Shaw found out when his hammer went down, you just need the right brand. So he turned to a Volvo HB3800 hammer.

“It’s a lot faster. It hits a lot harder,” said Shaw, who runs one of the top construction firms in Maine. “It’s quieter. It doesn’t take nearly as long to do the same job as the other hammer did. We really like it.”

Gorham Sand & Gravel’s previous 12,000- pound hydraulic hammer burned out while working in the company’s quarry operations. With an important drainage job upcoming at the Portland International Jetport, Shaw knew he couldn’t afford downtime with his hammer. So he turned to Chadwick-BaRoss Inc., the Volvo Construction Equipment dealer in Port-land that had just put 12 new Volvo hammers into its rental fleet.

At first, Shaw rented the Volvo HB3800 ham-mer, which delivers force of 12,000 pounds per foot. It didn’t take long to decide to buy it. “It has been night and day, the Volvo ham-mer vs. the other hammer,” Shaw said. “It has performed very, very well.”

Shaw has seen his company grow from just he and his brother Tom 20 years ago to a recognized leader in southern Maine with revenues in excess of $15 million a year. Part of that success has been setting the trends instead of reacting to them.

Volvo vs. blue Maine granite The first job the hammer went on was installation of a drainage system for a new 1,000-space parking garage at the Portland airport. Gorham Sand & Gravel needed to lay 18-inch storm drain 28 feet below grade. After excavating 9 feet of overburden, Shaw’s crews had to dig out between 18 and 21 feet of solid Maine granite, along a 300-foot-long trench.

“It’s a hard, blue-gray rock,” Shaw said. “It’s almost like glass. It breaks up like glass. It’s

the hardest stuff we’ve ever worked with.”

Because the rock was so dense, simply using a hammer would not fracture it. Crews first had to drill 6-foot-deep pilot holes in the granite to create a “Swiss cheese” pattern. Then the Volvo HB3800 was brought it to break up the ledge. Every 2 feet or so, an ex-cavator would dig out and remove the broken rock, and then the process would start over.

The process is time consuming, and extremely hard on the equipment. Normally, the bit on a hydraulic hammer will last several months, but on these kind of job sites the bits wear out in less than two weeks.

“We’ve broken quite a few bits,” Shaw said. “We’re down in the virgin ledge. It’s hard to break. It’s solid all the way through. There’s no

The Volvo hydraulic coupler allows the hammer to be swapped for a bucket in a matter of minutes when needed.

more care. built in.Volvo Construction Equipment www.volvoce.com

“We expect the Volvo hammer is going to make us a lot of money.”Jim ShawGorham Sand & Gravel

Volvo hammers:tough, powerful, quiet

more care. built in.Volvo Construction Equipment www.volvoce.com

relief, except for the holes we drill.”

The Volvo hammer allowed Gorham Sand & Gravel to get a head start on the Portland airport project while the company was getting regulatory approval to do blasting at the site. Of the 300 linear feet on the drainage project, the Volvo hammer processed about 120 feet before the company was able to blast the rest.

“If we could have blasted, it probably would have been a two-and-a-half-week job,” Shaw said. “We couldn’t blast, so it turned into two and a half months. We were hammering between eight and 10 hours a day out of a 12-hour work day. Seven days a week.”

Durability and productionShaw said because the hammer gets nearly constant use, durability is a key issue. The Volvo hammer gets good grades for durability and performance.

“On a pipe job, if the hammer’s not work-ing, the crew’s not working,” he said. “A lot of times, if we can, we’ll keep the hammer work-ing all night so when the crew gets there in the morning they have something to do.”

The Volvo HB3800 has also been used on a road construction job near Buxton, Maine, where Gorham Sand & Gravel is doing full-depth reconstruction with storm drains, gravel, new asphalt plus ditches, sidewalks and curbs. The rock is not as deep, but the trench stretches over two miles. Shaw said on these types of jobs, production and speed are keys.

Jim Shaw: Likes hammer’s power, quiet operation.

“We can average between two and four hundred feet of pipe in a day,” Shaw said. “We want that hammer at least a day or two ahead of it. On a lot of our shallow pipe, we’ll go in first and hammer it, and then send the pipe crew in after. So we don’t have to wait for the hydraulic hammer to do its job.”

Volvo’s low-noise design is a big advantage, Shaw said, especially on urban job sites where equipment noise levels are strictly regulated and monitored. The Volvo HB3800 is substantially quieter than others hammers the company has used.

“It’s a lot quieter,” Shaw said. “Probably a third less. It’s about the same as our 5,000-pound hammer in terms of noise. That’s a big issue. If they come out with the decibel meter and you’re over the levels, you can’t use the ham-mer. But the Volvo hammer is compliant even with the strict Portland noise standard.”

Auto lube, S-type couplerGorham Sand & Gravel decided to outfit the Volvo HB3800 hammer with an auto-lube system, utilizing the hammer’s built-in grease channel. The auto-lube system ensures the hammer gets fresh grease at assigned intervals and will ensure longer equipment life, Shaw said.

The HB3800 on a road job near Buxton, Maine.

Hammers: good rental itemsGary Thebarge is such a believer in hydraulic hammers, he put 12 new Volvo breakers in his equipment-rental fleet.

“We do quite a bit of hammer rental,” said Thebarge, vice president of Chadwick-BaRoss Inc., a Volvo Construction Equipment dealer that covers Maine, Massachusetts and New Hampshire. “It’s an excellent rental item. Ham-mers especially seem to get rented down and then get sold. Contractors prefer to rent them first and then look a good price point to buy them.”

Mike Sullivan, general manager of the Chad-wick-BaRoss location in Westbrook, Maine, said Volvo’s new line of hydraulic breakers will become an industry leader for toughness, reliability and quiet operation.

“As the word gets out on Volvo hammers, the potential will only increase,” Sullivan said. “Having them in our rental fleet is going to be very good for the hammer business.”

Chadwick-BaRoss suggested Gorham Sand & Gravel outfit its excavators with Volvo S-type couplers, which allow Volvo hammers to be fitted to any brand of excavator and make it easy to swap out a bucket for a hammer or other attachment. Shaw said he’s a believer in the S-type coupler.

“The operator can stay in the cab and swap buckets,” he said. “It saves a lot of time. We have four or five excavators and we can easily swap buckets between them. We do this a lot more often than we used to.”