Aggregate & Quarry

Capital Intensity

The Asphalt Manufacturing industry has a high level of capital intensity. In 2016, IBISWorld estimates that industry operators will spend $0.44 on capital for every dollar spent on wages. Capital intensity Remained relatively stable over the past five years. Capital investment is centered on the purchase and maintenance of plant equipment and trucks. Asphalt plants require specialized conveyors, screens, pumps, heaters, mixers, storage facilities, and emission control systems. Large producers of asphalt for nonbuilding operations are often vertically integrated. These companies may also own aggregate quarries and distribution operations, requiring further expenditures on specialized equipment.

The Asphalt Manufacturing industry requires skilled workers to oversee large portions of the manufacturing process as well as handle sales and logistics. The majority (54.4%) of companies in the industry employ fewer than 20 people. Within these smaller companies, each worker handles a wide scope of responsibilities

Technology & Systems

The Asphalt Manufacturing industry’s core production processes have remained stable over the last few decades. Asphalt paving materials are made through the mixing of asphalt refined from crude petroleum with dry aggregate materials, which is then dried to form asphalt blocks or asphalt pavement. Asphalt and tar roofing products are made by simply coating shingles or other roofing materials with asphalt. While these core production processes have remained unchanged for a long period, technological developments have allowed the Asphalt Manufacturing industry to expand its product offerings and appeal to a wider consumer base.

The clear majority of asphalt roads, driveways, parking lots and other asphalt paved surfaces were built using hot mix asphalt, which requires the asphalt to be heated up to very high temperatures when being laid onto the road. However, other asphalt paving mixtures that do not require such high temperatures are becoming increasingly prevalent. These paving mixtures, which include warm and cold mix asphalt, are diluted with other liquids. This dilution lowers the viscosity of the mixture in the same way that high heat does to hot mix asphalt so that the mixture can be laid onto the roadbed. As the mixture dries, the added liquids evaporate and allow the asphalt mixture to harden in the same way that hot mix asphalt does. Industry operators are also increasingly using reclaimed asphalt pavement, or asphalt that is partially composed of recycled asphalt roads. Reclaimed asphalt pavement saves industry operators money, and is beneficial to the environment as it conserves resources. The practice of recycling asphalt began in the 1970’s and has picked up recently because of high petroleum costs.

There have also been technological advancements that have allowed for the increased recycling of asphalt roofing products. For example, some companies promote a program that allows contractors to recycle asphalt coated shingles, which are reused in asphalt road construction. In addition, technological advancements are being made to reduce the noxious fumes that are released when asphalt roofs are being installed.
SOURCE: WWW.IBISWORLD.COM