Company: ACA
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001739445-25-000026
Chunk: 12

Company: Arcosa, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1
Chunk 12
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 with 2024 fiscal year planned Texas Department of Transportation (“TxDOT”) lettings of approximately $12.5 billion. The TxDOT annual update to its 10-year Unified Transportation Program ("UTP") approved in 2024 identified a record $104 billion of infrastructure projects, a 4% increase from the prior year's UTP update. Population and household formation growth  contributed to a strong residential housing market prior to 2022, however, the rise in interest rates in recent years has caused a near term slow down, with housing permits, an indication of future construction activity, down approximately 3% in Texas in 2024 compared to the previous year. 

Customers and Competitors

For natural and recycled aggregates and specialty materials, our customers include concrete and asphalt producers; commercial, residential, highway, and general contractors; manufacturers of masonry and building products; and state and local governments. For asphalt, our customers primarily include contractors and local/state road departments.

Shipments of natural and recycled aggregates from an individual quarry or stationary crushing location are generally limited in geographic scope because the cost of transportation to customers is high relative to the value of the product itself. Where practical, we have operations located close to our local markets and, in certain locations, offer portable crushing services at a job site for re-use onsite. Proximity of our active quarries, stationary crushing locations, and strategic reserves to demand centers serve as barriers to entry. Because asphalt mix hardens rapidly, our asphalt operations are either co-located with our aggregates quarries or in close proximity to our local markets.

The U.S. aggregates industry is a highly fragmented industry with more than 5,000 producers nationwide. We compete, in most cases, with natural and recycled aggregates producers in the regions where we operate. Many opportunities for consolidation exist. Therefore, companies in the industry tend to grow by acquiring existing facilities to extend their current market positions or enter new markets.

Our specialty materials products enjoy higher barriers to entry than our natural and recycled aggregates due to specific mineral properties, specialized manufacturing, or additional processing. Due to the added value in processing, specialty materials have a much wider, multi-state distribution area due to their higher value relative to their distribution costs as compared to natural and recycled aggregates. We compete with specialty materials producers nationwide.

For trench shields and shoring products, our customers are equipment rental dealers and commercial, residential, and industrial contractors. We compete with shoring products manufacturers nationwide.

Raw Material and Suppliers

The primary raw material for our natural aggregates and