Drought, Oil Prices to Impact Bulk Solids Conveying in 2015

Drought in California, combined with pullback in the price of oil, are among factors that may lead to a relatively flat year for bulk solids conveyor manufacturers, according to executives with the Conveyor Equipment Manufacturers Association (CEMA).
    While the bulk solids conveying industry has rebounded from the recession, factors such as oil and drought will mean 2015 will have less growth compared with the past few years.
    Some of the pent-up demand that was met in 2011 and 2012 is starting to level off, according to Garry Abraham, secretary of CEMA and general manager/CEO of Screw Conveyor Corp, Hammond, IN. While the unit side of the conveying industry is seeing growth, summer 2014 numbers were down for the bulk side. “We are starting to see a little bit of leveling off,” said Abraham. “Here at Screw Conveyor and throughout the industry we kind of see a flat year,”
    Screw Conveyor Corp. has a facility in Visalia, CA and that operation has seen less activity because of the drought in California. Because agriculture represents a significant portion of the bulk solids conveying industry, the drought has had an impact, according to Abraham.
    Meanwhile, the fall in the price of oil in the last quarter of 2014 has impacted bulk solids conveying as well, especially in the fracking industry, according to Paul Ross, treasurer of CEMA and president of Douglas Manufacturing. “Now with oil prices dropping significantly, there will be less investment,” said Ross.
    Materials such as the crushed stone and sand that are turned into concrete will not be needed in as much demand to create the concrete pads for oil rigs. “I don’t think people saw the price of oil dropping so fast,” said Ross.
    While the bulk solids side of conveying equipment may be flat for 2015, the unit side of conveying equipment is expected to have another strong year. Ross says the unit side of conveying equipment is seeing growth because of expansion of the distribution of product through companies such as Amazon, FedEx, and others.
    To further its members’ goals CEMA plans to release a new bucket elevator manual this year and is hiring a Spanish-speaking engineer. The engineer will assist CEMA as the organization continues its focus on including all of the Americas. One of the reasons for hiring the engineer will be to translate CEMA’s Belt Conveyors for Bulk Materials into Spanish.
    Ross said there are certain challenges that will always exist for the bulk solids conveying industry, such as regulatory issues in mining and new challenges relating to energy. Power plants have shifted from burning coal to burning natural gas which is more plentiful. But construction seems to have rebounded from the recession, and Ross thinks aggregate spending within the construction industry will help bulk solids conveying.
    Ross said the Great Recession and the year 2008 was particularly challenging for the conveying equipment industry, comparing it to someone turning off a powerful faucet at once. Since then, the conveying industry has bounced back. “We’re back to basically those levels,” said Ross.

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