Fabcon Precast is expanding geographically and investing in its facilities to remain the industry leader in precast products throughout the country.
By Janice Hoppe-Spiers
The future looks bright for Fabcon Precast as it continues to lead the industry in manufacturing and erection of precast concrete wall panels. The company prides itself on remaining flexible in an ever-changing industry while focusing on geographic expansion and capital improvements.
“I’m excited about the company’s future and the ownership right now,” Vice President of Sales Jim Houtman says. “The current economy and the markets we serve have put us in a sweet spot and I foresee the company will continue to grow and do really well.”
David Hanson and Gerald Rauenhorst founded Fabcon in 1970 to develop SpanDeck™ technology, which was used for producing eight-foot-wide concrete wall panels and floor slabs. The company’s first plant began operations in 1971, producing slabs for multifamily and mixed-use projects.
As the business grew, Fabcon refined its engineering and enhanced its equipment to expand its capabilities and the markets it served. “Prior to 1986, most of our work was multi-story residential properties,” Houtman adds. “The tax law changed for depreciation of multi-story buildings over the course of two years, including no plank or solid wall panels. In 1990 we switched to light industrial. It’s all about being nimble on your feet and being able to adapt with changes in the market.”
Today, Fabcon’s VersaCore+Green™ precast concrete panels are used in many industries, including fulfillment/distribution centers, manufacturing, community and public facilities, food processing/storage, retail and entertainment. The company’s continuous improvement mindset means every step of the manufacturing and installation process are under constant scrutiny. Improvements to its panel setting rates have been achieved by focusing more on the pre-planning processes and working smarter rather than harder.
“Better, Stronger, Faster” describes more than just Fabcon’s product; it applies to its entire organizational approach. The company has installed its product in 38 states, four provinces and in Washington, D.C., delivering the value, performance and service its progressive brand clients expect.
Fabcon operates four strategically placed manufacturing facilities in Savage, Minn.; Grove City, Ohio; Mahanoy City, Pa.; and Pleasanton, Kan. These locations give Fabcon an effective span of delivery that includes almost everything east of the Rocky Mountains and north of the Gulf Coast. Each plant is a precisely controlled environment built to ensure proper curing and consistency.
Although opportunities are available in the West, Fabcon has not yet made the leap over the Rocky Mountains to move into California or the Northwest. Fabcon has seen more projects in Texas and added one million square feet to its Pleasanton plant, increasing its capacity by 25 percent.
Fabcon’s Pleasanton plant supports work in Kansas, Missouri, Oklahoma and Texas, as well as some opportunities in Colorado. “Shipping to Colorado is tough and there is certainly a market in Denver and throughout the state,” Houtman says. “As we address Canada, the East Coast and Southeast and start to move west, Denver would be a logical next step where we would leapfrog the plant.”
The leapfrog strategy Fabcon uses when it comes to plant locations involves an analysis of the gaps in the market. “How do we grow logically?” Houtman asks. “We were in Columbus, Ohio, and Minneapolis, so the gap in the market was somewhere around Kansas City, Kan., and we opened a location in Pleasanton. Now that its in place and we are expanding it, where do we go next? Toronto makes the most sense.”
About 18 months ago, Los Angeles-based mergers, acquisitions and operations firm Platinum Equity acquired Fabcon. The company has been expanding ever since. “We were owned by the same family for 46 years and they were very conservative in their approach to the market and a conservative company,” Houtman says. “From my perspective, it prevented us from pursuing opportunities. One of these I’ve been pushing for 15 years is an expansion to Canada.”
The greater Toronto area is the third-largest warehouse and distribution market behind Chicago and Los Angeles. “It’s silly to me we had a gap up there,” Houtman adds. “When Platinum came onboard, they told us they love the company model, the loyalty of our clientele and that we should grow where we want to grow.”
With the new owners’ blessing, Houtman and Vice President of Business Development John Allgaier undertook a market research project to determine whether Canada was a viable market for Fabcon. “We didn’t have too many surprises from the research,” Allgaier adds. “The Canadian market is underserved and has one primary precast supplier in the market.”
Developers in Toronto advised Fabcon that they need competition in the market when it comes to precast wall panel construction because there is only one major producer in the area. As a result, Platinum Equity has been in negotiations to acquire a smaller precast producer in the area. “I would hope that we will have a plant up there in the next six to 12 months,” Houtman says. “We are in negotiations with a couple companies up there and would add to their capabilities and capacity, bringing our technology to them while leveraging their current market position. It’s a win-win situation.”
In addition to acquiring a plant in Toronto, Houtman and Allgaier also have suggested building a new plant in the Northeast to better serve that market. “As successful as we have been in the northeastern part of the U.S., our research confirmed we are underserving the market even with our recent expansion of our Pennsylvania plant,” Houtman adds. “We could build a new plant in New England, open the doors and be immediately successful.” “In addition to looking at new geographic markets - we are expanding capacity at a couple plants where we know the the market is being underserved,” Allgaier says. “We are also focused on upgrading plant assets to improve our quality. These investments are just smart business because it allows us to better serve our customers.”
Fabcon has remained successful for nearly five decades because of its ability to quickly adapt to market changes. Buildings the company erected 10 to 15 years ago no longer meet the current market needs, Houtman says.
“Fortunately, it has worked to our strong suit, but buildings have gotten taller and taller,” he adds. “Major retail shippers used to have a 30-foot clearance, then 32 feet, 34 feet, 36 feet and now 40 feet. Once you put in the foundation and roof system, you’re talking about a 56-foot-tall panel and there are very few precasters who can do something like that.”
As logistics companies struggle with labor shortages, more automated systems are going into warehouses and forcing ceiling heights to get taller. “A typical warehouse was 18 feet clear height and today it’s 26 feet,” Houtman adds. “The sizes of buildings are also getting larger. Typically, one of our major retail shipper clients has one million square feet. If we had a one-million-square-foot building years ago it would have created a lot of buzz in the company. Now they have almost become routine.”
With all the changes in building sizes, Fabcon has also adjusted to compressed planning stages. “The construction cycle is shorter. Everything needs to be right now,” Allgaier says. “It used to be that a project was in planning stages for a year or two. Now it seems like 30 days after it becomes public they want to break ground. It’s moving quickly and people are more protective of what they are building in terms of divulging information. We face non-disclosure agreements regularly.”
Because Fabcon has been in the industry for nearly five decades, buildings it originally constructed are being modified as ownership and needs change. Houtman and Allgaier identified a gap in service to its customers with older buildings and are developing an extended customer care program to address the need. “If a customer thinks it’s one of our buildings, we can go back and check our archives,” Allgaier says. “There is a gap there on service as obsolescence has shortened and owners make changes.”
For example, Fabcon constructed a building in the early 1980s and the current owner of the building went to an engineer to design a steel frame section around a wall that was going to cost $35,000 to $40,000. “We had our engineers look at it and we did the work for $4,000,” Allgaier says. “The other company over-engineered everything and it wasn’t necessary. That’s an area we can grow our service to our customers.”
At the end of October, Fabcon was featured on Fox Business Network’s television show, Office Spaces, which focuses on innovative construction products for the commercial market. “There is a real demand out there for our product and increased clear heights, energy efficiency, speed of construction and production capacity aren’t going away any time soon,” Houtman says.
Over the next five to 10 years, Fabcon predicts more data centers will be coming online that require building products that allow them to be more efficient, sustainable and secure. “For data centers, energy efficiency is really important, but for a slightly different reason,” Houtman explains. “Getting the heat out and controlling humidity is key. We built a data center in Shakopee, Minn., and it doesn’t have a furnace because in the middle of January when it’s -20 F the equipment heat byproduct generated is enough to maintain the required temperature throughout the facility. We move that much heat out while controlling the building climate and environment because you don’t want static and moisture.”
Moving forward, Fabcon will continue to explore expansion opportunities and enhance its precast product and service offerings to the construction industry. “Everything we try to do is centered on being the only logical choice for precast products – adding product lines, geographic coverage and capacity,” Houtman says. “We have the best mousetrap in the industry.”