Fall 2005 - Ontario Sewer and Watermain Construction Association

MEMBER PROFILE:
Kovacs Sand & Gravel
By Cheryl Rego
Few Ontarians realize how
essential the aggregate
industry is to their quality
of living. The Aggregate
Producers’ Association of
Ontario says that Ontario consumes
an average of 155 million tonnes of
aggregate annually. Every person in
Ontario consumes about 15 tonnes
of gravel per year on roads, sidewalks,
asphalt or even roofing shingles.
Aggregate is used in everything
from houses and schools to roads
and even products inside homes.
One person that is acutely aware
of the many uses of aggregate is
Greg White, General Manager for
Kovacs Sand & Gravel. The company
has been supplying aggregate since
2003. Kovacs Sand & Gravel owns a
gravel pit from which they produce
sand and gravel for construction
projects mostly in the Durham
region. At the time the company
purchased the gravel pit, it was lying
dormant. Previously this same pit
was operated on a levy basis, where
operators would pay a fee to produce
their own gravel. Kovacs brought the
pit back into operation and now
hires trucks to move the sand and
gravel out of the pit. “We produce
material all year round, and we’re
constantly pricing work,” White
said. “We have gone from a wayside
pit to a 12-month operation.”
Kovacs has four full-time employees,
in addition to managing the trucks.
“We don’t own any trucks, but we
employ people to run trucks and
that can vary from seven trucks a
day to thirty trucks a day. We try to
keep it down to a decent flow,”
White said. The company supplies
all types of granular material.
Kovacs Sand & Gravel has quickly
made a name for themselves in this
competitive business. The company
is currently supplying a big job on
Highway 12 in Durham that is being
done by the Miller Group. “We have
done quite a few large subdivisions.
We just finished a big sub-division
in Brooklyn. Our jobs typically
range from 5000 tonnes to 60,000 –
70,000 tonnes,” White said. He said
the company also has a contract
with the Ontario Power’s two
nuclear plants. “The jobs at these
plants are challenging because it is
hard to get material in and out
because of security and the trucks
get tied up for a few days,” White
explained.
The aggregate business naturally
follows the construction cycle with
the usual ebbs and flows. This brings
its own set of challenges. “Some jobs
are very large and the customer
wants the material out at once. In
this business, we have to manage the
trucks well. Sometimes there just
doesn’t seem to be enough trucks to
go around. It is hard for someone
who owns six trucks to get six more
because they’ll be sitting idle from
Christmas until spring,” White said.
“We produce product all year around
and it is very hard to get consistency.
If we don’t manage the trucks properly,
jobs can get delayed.”
White said that the high cost of
fuel also plays havoc with the business
plan. “It is an extremely competitive
business. The fuel increases
are absolutely paralyzing for us. One
third of the trucks’ daily intake gets
consumed in fuel costs and there is
no recourse. We have to price work
in the dead of winter that isn’t going
to start until June the following year.
So for instance, we priced jobs with
fuel at 78 cents per litre and it is now
at 98,” White said. He said that dealing
with the price of fuel and trucking
is the hardest part of the
business. “If the cost of fuel was fixed
- doesn’t matter what it was fixed at -
it would be easier because then we
can budget it. However, now with
pricing we can’t anticipate it being a
dollar per litre, although we know
The Undergrounder / Fall 2005 • 27