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We need to invest in the infrastructure of our country: U.S. Concrete CEO & President

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Ronnie Pruitt, U.S. Concrete CEO and President joins the Yahoo Finance Live panel to discuss the need for President Biden’s infrastructure plan.

Video Transcript


AKIKO FUJITA: Well, President Biden is expected to unveil part of his infrastructure bill later this week. The first part expected to focus on rebuilding roads and railways, while the second part will be focused on child care and health care reforms. Combined, the bill is expected to total $3 trillion.

Let's bring in Ronnie Pruitt, US Concrete CEO and President. We've also got Yahoo Finance's Brian Sozzi joining in on the conversation. Ronnie, it's good to talk to you today. A lot of people see huge opportunity in this potential infrastructure bill, although we're still waiting for the specifics. I'm curious if you've had conversations directly with the White House. And where do you think this bill is going to land?

RONNIE PRUITT: I have. I've had several conversations with folks on the transportation committee. I think we're in a unique position, unique in the fact that we need jobs, and we need more economic benefit. We also need to invest in the infrastructure of our country.

And so the need has been there for some time. We've seen lots of different studies by different engineering groups with grading of our infrastructure systems from low D's to mid C's. We know that bridges, tunnels, congestion in the high-growth areas are needed.

I think coming out of the pandemic and the stress we've had on the economy, the need to invest in our country with jobs and economic growth is there as well. And so the infrastructure package can check many boxes. And I think the need is great on both sides of the aisle. So I think the real question is, how are we going to pay for it? And I think that's where the questions are going to continue to be asked.

BRIAN SOZZI: Ronnie, where is the need the greatest? Is it roads? Is it bridges?

RONNIE PRUITT: I think it's unique to each individual market. Obviously, when you get to markets like we're in in the New York and New Jersey market, where you cross a lot of rivers, you have a lot of waterways, bridges and tunnels are needed. When you get to markets like Texas, we don't have those large water systems. And so the congestion here is more on the roads, paving [GARBLED AUDIO] those things to address not only aging infrastructure but as well as the growth that has taken place over all of these communities.

And that growth continues. With the opportunities we've seen with the residential growth in a lot of our markets, we see those roads being put under even more stress as commuters will start back to work as offices and banks and communities have opened back up. And so I think it's a combination. It really gets down to those local markets of what drives that.

BRIAN SOZZI: Ronnie, I think it's important to also mention here, US Concrete, it's not dependent upon getting an infrastructure plan. You guys have had good momentum coming out of your most recent quarter in two areas, I would say. You mentioned residential. But what are you seeing in the data center and warehouse space?

RONNIE PRUITT: So we've seen a lot of growth. And obviously, with the growth of all the different social media platforms, there's a lot of data out there. And so historically, where we've seen data centers in a lot of the areas of the middle part of the country, we've seen data center growth now in Northern California. We've seen data center growth here in Texas. We've built many large data centers here in the state of Texas. We're seeing data center growth in the Northern Virginia market as our footprint in DC with HQ2, headquarters for Amazon there. We're seeing the data center push there.

So at the end of the day, distribution and very similar construction when you talk about data centers and distribution, large, flat, very high square foot buildings. And we're seeing that in all of our footprint.

Roads and bridges and infrastructure is an important piece to US Concrete. But like you pointed out, it's not our biggest downstream market. But what we do see is what infrastructure does for our industry is it gives us long-term visibility into the demand side. It gives the states a lot longer planning runway.

The states need this to plan for their future. And so I think it takes a lot of boxes there for our company as well as the industry as a whole, giving us that long-term visibility into the demand side, which obviously is critical to for our planning for capacities and aggregates, for capacities in our ready-mix deliveries, as well as other distribution needs for our company.

AKIKO FUJITA: Ronnie, you the big question around this infrastructure bill is going to be how it's paid for. President Biden has hinted at this being funded by raising taxes on the wealthiest Americans as well as corporations. Is that something that you would support, even if US Concrete's a big beneficiary of this bill?

RONNIE PRUITT: I think you've got to figure out a way to pay for it. So we've talked about gas taxes. We've talked about tolls. We've talked about registrations. We've talked about government taxes as far as infrastructure goes.

At the end of the day, I am a believer that we have to figure out how to pay for it. I do think there's a model there that users pay more for the roads. And we're a big user of that. And so if that's what it comes down to, I think it's an investment. And I'm not afraid to pay for investments that have a return.

And so at the end of the day, I look at this as an investment in our country, an investment with a return. And I am a believer that we have to figure out a way to pay for it.

So in a lot of markets that we participate in, Texas being one of them, Texas Department of Transportation has come up with PPPs, public-private partnerships. We've really expanded our toll road systems. And so there are ways that we've proven that these roads can be funded.

I think the bigger issue is making sure both sides of the aisle can come to an agreement. And I will let the politicians take care of that.

AKIKO FUJITA: And Ronnie, while we're talking about this as an infrastructure bill, the president has made it pretty clear it's also a climate bill. And when you look at the cement industry, it's one of the most significant emitters of CO2 gas. I wonder how you see this as a potential opportunity to shift the mix here to bring that number down, and ultimately, what that means from a cost perspective.

RONNIE PRUITT: Yeah, that's a great question. We at US Concrete take our environmental stance extremely important. We have over 15,000 [GARBLED AUDIO] as a company. We're an early adopter of carbon cure, a process that captures carbon in concrete.

We are not a cement producer. But we are a very large cement user. I would say that the investment in cement plants across the United States over the last 10 years has been one that has been extremely environmental-conscious. I would say our emission rates in cement plants in the United States are lower than any other country out there.

I think the producers of cement here have taken environmental issues extremely serious and with the scrubbers, the electrostatic precipitators. There's all kinds of technology out there that the US plants have invested in. But at the end of the day, we have to be conscious of our environment. And we have to support the fact that we have to find a balance between how we grow and how we take care of the communities that we live and the air that we breathe.

And I think there is a balance there. At the end of the day, there's a lot of congestion that adds to the emissions as well. So we're trying to solve one problem by creating another problem. But if we can do that in a way, under the new technologies that we have-- and carbon cure's a great example. We're taking a carbon that has been produced, whether that's through cement production or other ways, and we're taking that and blending it in concrete and encapsulating it.

And so we're trying to come up with solutions that balance that out. But it is going to continue to be-- we're very active in wind farms. We're very active in solar power. We do a lot of concrete in those type of facilities. And so in the end, I think the decisions we're making are going to lead to better, more cleaner, more environmentally-accepted practices. But this has been a long time coming. And I think a lot of companies are putting their best foot forward right now.

BRIAN SOZZI: Ronnie, you've also been active on the acquisition front. You haven't been shy about pulling the trigger. Are there other acquisitions you're eyeing at for this year?

RONNIE PRUITT: We're always acquisitive. We're going to look for the right opportunities. We're very focused on the regions that we're in that show very high-growth areas with population, with schools, with data centers, with distribution. And so we're going to be very disciplined from a standpoint of being acquisitive. But at a time where multiples are right, we'll pull the trigger.

I want to be extremely clear to my shareholders and investors in our company that we won't do anything that makes you scratch your head. We'll be very diligent in our spend of our money. And if things are right, we'll pull the trigger.

AKIKO FUJITA: Ronnie Pruitt, US Concrete CEO and President, I appreciate your time today. It's good to talk to you. And our thanks to Brian Sozzi as well for joining in on that conversation.