In a plain building along a stretch of Highway 70 in Rock Island, workers pour concrete into molds and begin a curing process that will produce walls.
The walls Superior Walls of East Tennessee makes usually go into residential construction or light commercial construction.
Many have been sent to the Mississippi Gulf Coast for concrete homes being built to better withstand hurricanes. Others will go into 11 prototype minimalist homes in a downtown Bentonville, Ark., infill development. Superior Walls also won a contract to provide walls for a flex building at a nuclear plant in Burlington, Kan.
But a month ago, the company marked a major achievement in establishing Superior Walls as a precast concrete supplier when it won a contract to provide retaining walls for a stretch of highway in Washington County.
A year in the making, the contract further expands the company’s product line as it continues to rise from the depths of a recession that decimated the housing industry and slashed a major portion of Superior Walls’ revenue along with two thirds of its workforce.
By expanding products and services beyond simply building foundations, the company has built its business volume to about pre-recession levels, turning a profit last year for the first time since 2007. A labor shortage in the residential construction business could bring stronger growth for the company since precast concrete walls require less labor to make and assemble than traditional building methods.
“We went through some lean years and did our best to hold onto as many employees as we could,” said Stacey Harvey, the company’s president and one of its owners. “We made it and now we are on a nice growth path in precast concrete.” Harvey and partners started the company in 2003.
Harvey, a custom homebuilder, had been using the Superior Walls product, a patented wall system, since 2001 in foundations. Seeing the growing demand for the product, he and his partners decided to become a licensed manufacturer for the Superior Walls Xi product.
By 2007, Superior Walls of East Tennessee’s annual revenue had shot to $8 million and employees numbered more than 70. But in 2006, Harvey said the company started to notice the market beginning to tighten.
He sought to make the company all-inclusive on foundations, adding excavation and site preparation to the company’s services. “I wanted to make us more attractive,” Harvey said.
And it worked for 2006 and 2007. The company’s revenues grew while everyone else was losing business, Harvey said.
But then the bottom fell out in 2008 when the housing boom turned to bust. Harvey said revenue dropped to $2.6 million, then to $1.9 million in 2009. The number of employees dropped to about 26.
The company began looking at what else it could do to go beyond the base product. “We were so busy before the recession, we didn’t have time to look up,” Harvey said.
With the recession in full force, however, Harvey and his staff had the time to look at their business and determined that there was a void in the market for precast concrete beyond the patented product the company was making.
“We had millions of dollars of equipment sitting here idle at times and we decided to go from being a one trick pony to a precaster,” Harvey said.
As a result, the company expanded its reach beyond Tennessee. The company sends product to Columbus, Ohio, in addition to the Mississippi Gulf Coast and Kansas. And soon enough, Superior Walls will be in Arkansas once the Bentonville project moves
forward. If that type of development takes off there, it could
mean even more business for the Rock Island company. The nuclear plant work is expected to grow as well.
The number of employees has risen to about 40, and Harvey said the goal is to grow beyond the pre- recession employment numbers.
Revenues haven’t risen to pre-recession levels because home values have been slow to rise in general along with the ability to increase pricing. But Harvey said he is confident that revenues will ultimately exceed pre-recession levels.
“We’ve been to the bottom,” he said. “Now that we aren’t just foundations anymore, we can really grow and build on the precast concrete business we’ve already won.”
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