Wearing a casual suit jacket and striking green trousers, the latter to showcase his sustainable side, Jaco van der Merwe is in a relaxed mood when I sit down with him on the impressive Astec stand at CONEXPO-CON/AGG 2023 (14-18 March). He is talking to Aggregates Business the day after he had led his first major off-highway equipment industry exhibition press conference as Astec CEO and president.
“I’ve been with Astec for almost seven years. Before the [management] change, I was responsible for the company’s asphalt and concrete plant business and everything else we service out of that. When the change happened, I was excited to step up,” says van der Merwe, who replaced Barry Ruffalo as Astec president and CEO in January 2023.
“Everyone has a personal aspiration to grow, and Astec is a special company with a very rich history, with Dr Brock and his friends having started the business. It’s a very solid business which really focuses on customer service and innovation. For me, those are the type of things you have to do as a company if you want to be successful. We have great people in this organisation and very good and loyal customers. When you couple that with the products we make, how could you not be interested in leading this company?”
New Astec road construction machines on show at CONEXPO/CON-AGG 2023 included the Roadtec RP-175 and RP-195 highway-class asphalt pavers and the RX-405 cold planer. In addition, the company also introduced new materials solutions equipment, including the re-designed 9200 fines recovery wash plant, the PTSC2818VM portable high-frequency screen, and the FT300 mobile cone crusher. On the forestry and environmental front, Astec also introduced its newest Peterson horizontal grinder, the 5710E.
“I’m an equipment guy, a manufacturing guy. I’m a metallurgical engineer who grew up in manufacturing environments,” continues van der Merwe, who hails from Pretoria, South Africa. “I spent a lot of time in mining, so what we do is all about my background. I like to see a product come out of the door. We have a very strong niche position, and I think we have a great opportunity to do something special with this business.”
Having recently celebrated its 50th anniversary and after last year’s combination of its 16 industry-renowned brands under the Astec banner, including KPI-JCI and Astec Mobile Screens, Telsmith, Breaker Technology, Roadtec, Carlson, Peterson Pacific and Con-E-Co, to name only a few, the Chattanooga, Tennessee-headquartered company today trades as a premium global manufacturer of more than 100 products for asphalt road construction, aggregate processing and concrete production. Astec employs more than 4,000 people, with sales and manufacturing operations located worldwide.
Asked about his initial priorities in his new president and CEO role, van der Merwe says: “I’ve only been in the job two months, but I’ve spent a lot of time talking to people at all levels of Astec. I’ve visited all our factories and have done a lot of work to understand the current state of the business. We have made a lot of big changes and are implementing a new system, and I wanted to really understand those things in detail.
“We need to get to a certain level of profitability where I feel comfortable to go into acquisitions. We will never stop looking at opportunities, and when the time is right, we will do a deal and do a good job of it.”
Having worked for Atlas Copco for 18 years, helping grow the Swedish mining and quarrying equipment heavyweight’s drilling consumables business in the South African mining industry, van der Merwe moved to Texas, USA, to help run the company’s North American business. After returning to South Africa to run the sales and services side of Atlas Copco’s SA business for three years, van der Merwe again returned to Texas in 2013 to manage the company’s big drill rig factory in the Lone Star State. He left Atlas Copco to join Astec in 2016.
“During my time at Atlas Copco, I was also responsible for factories in China, India, Australia and Canada. I handled acquisitions in different parts of the world and gained a lot of experience in the global market.”
I ask van der Merwe to evaluate Astec’s current Rock to Road product offering and what he thinks will be the company’s key growth drivers. “We are very fortunate that we have a very wide product portfolio. Over the last three years, we exited a few of the businesses that didn’t fit, like our [Gefco] water well drill rig line and our oil and gas drilling business. Those were necessary changes. I feel we now have a very solid portfolio. The new product launches are filling specific gaps in our portfolio. It gives our dealers products they can sell in larger volumes.
“Dealer network expansion is a key priority. There are also a lot of organic parts and service opportunities for us to grow. I love the parts and service business. We have a dedicated cross-business leader for our parts organisation, driving parts availability. In my previous role, we had a very strong service team and have been growing it. When you buy an $8 million [asphalt or concrete] plant, you want your customer to have someone to call.”
What does van der Merwe think about Astec’s electric-powered machine options and the wider off-highway equipment industry exploration of alternative power-based products? “We have multiple units that are already electric, but if you are going to have a 1,000-horsepower machine running on battery power, I’m not so sure that would work. On our asphalt plant side, we have big pieces of plants that were previously heated with natural gas that can now be heated electrically. The big challenge, especially in the US, is that not all electricity is clean. You still have a lot of coal-fired electric power plants. The verdict is also out on what happens to all the used batteries.
“Everyone is jumping on the hydrogen power bandwagon, but in the US, there is only one hydrogen pipeline. There are hundreds of natural gas pipelines, but you cannot pump hydrogen through them. Hydrogen burns and combusts differently. Not all hydrogen is clean, either. The [off-highway equipment] industry may be moving that way, but it will take time.”
An eye-catching development for Astec is the recent launch of its Astec Digital business unit, a single-vendor technology solution for the company’s Rock to Road value chain.
“It gives us the opportunity to connect all our equipment, and our customers want more visibility. They want to know if they have enough rock to make enough payment today,” explains van der Merwe. “They need us to help them optimise their processes.”
During Astec’s CONEXPO/CON-AGG 2023 press conference, van der Merwe stressed the importance of helping American asphalt plant customers comply with new US greenhouse gas reduction legislation.
“In the latest [US] Inflation Reduction Act, there’s a lot of legislation stipulated around asphalt plant. If they want to do business in future, our asphalt plant customers will have to show they are actively working on reducing greenhouse gas emissions. We are very well-positioned to help them with that.”
Commenting on Astec’s wider sustainability focus, van der Merwe says: “Long-term, sustainability is not going to go away. We have a lot of international customers with head offices in Europe. The pressure on them is much higher and many corporations have made public statements about how they are going to reduce their carbon footprints. They are going to need us to be on our game for them to achieve their goals. I’m incredibly excited about our work in this area. For example, around a year ago, we hired a sustainability engineer. It’s the first such hire in Astec’s history. I think a lot of smaller competitors are going to struggle to keep up.”
I stress to van der Merwe how strong the construction and demolition and wider waste materials recycling- ‘turning dirt into dollars’ theme has been at CONEXPO/CON-AGG 2023. Does he think Astec’s product range can tap into a growing interest in this market segment? “Peterson [an Astec brand] products cater for some of this via landfill and other works. There is a whole [other OEMs] product portfolio out in the market that covers this area. Longer term, it could be a gap in our range we fill organically or through acquisitions. It is an area of the market that is just going to grow.”
From its current strong platform, Astec is embarking on a major worldwide expansion of its comprehensive product and linked services offering across the crushing and screening, material handling, washing and classifying, rock breaker technology, asphalt and concrete sectors.
As part of its global expansion, Astec is carrying out a US$5mn factory expansion at its Omagh, County Tyrone, Northern Ireland site to better serve growing market demands in the global mobile crushing and screening industry. The project, due for completion in mid-2023, is adding an additional 44,000ft² to the facility, bringing the total to nearly 100,000ft² and the total investment in the site since Astec’s acquisition of mobile bulk material handling solutions manufacturer Telestack in 2014 to nearly $10 million. Currently accommodating an Omagh area-based workforce of around 200, the larger site will add more than 80 jobs over the next year.
“Just after I joined Astec, we started to map out the international expansion. We identified different areas of the world we wanted to go to and always said we’d go to Europe last. It is the most difficult market in terms of different languages, and the [unit] volumes and products are different. With the Omagh factory setup and our MINDS [automation group] acquisition giving us a presence in France and Belgium, we are establishing ourselves in that market. To be successful in Europe, you need to invest in a factory there or partner with others through acquisitions.
“Telestack fits right into our material handling solutions business. We have very good market experience with the people in Omagh. As part of our global expansion, they will play a key role going forward in how we grow in Europe and other markets.”
I end by asking van der Merwe what drives his work within the global off-highway equipment industry. “I am a sore loser. I like to win. I am driven by creating performing businesses, and I love being around people and working with them at all levels of an organisation. In my mind, if we look after our employees, they will look after our customers and our customers will give us business.”
