By 2021, the firm had acquired over 70 companies across the aggregates, cement, ready-mix concrete, and asphalt construction markets. Anne Noonan joined Summit Materials in 2020 as CEO when the company was drawing $2 billion in revenue. Shortly after joining Summit Materials, Noonan and the company launched a new strategy called ‘Elevate Summit’ in March, 2021.
The first step of that strategy was to define and state the company’s mission, vision, and values.
“Our mission is to provide the foundation to connect our communities today and build a better tomorrow,” Noonan tells us clearly. “Our vision is to be the most socially responsible, integrated construction materials solution provider, collaborating with stakeholders to deliver differentiated innovations and solve our customers’ challenges.”
Noonan adds, “Now that is a lot of words, but it is very deliberately phrased, each word has a meaning.”
A Good Deed Brings Other Rewards
That mission and vision are underpinned by four core values that inform everything Summit Materials does.
“Safety is obviously the first,” Noonan points out. “A unique thing about this industry is that our people have this firm commitment not only to keeping each other safe but to keeping our communities safe. We are out there hauling rocks, mixing concrete, building foundations, roads and infrastructure throughout the US and British Columbia.”
The second value is “Integrity.” Building trust by doing what is right and remaining accountable- “We do the right thing even when no one is watching,” Noonan emphasises. It is no surprise that the third value, “Sustainability,” is closely integrated with the second. Summit Materials answers to the impact of its actions and seeks out opportunities to develop innovative practices and solutions.
Finally, there is “Inclusivity”, and again it is obvious that this is something Noonan is passionate about.
“We are very intentional about what we do to bring together local communities and drive equity for all stakeholders,” Noonan says. “We go into quarries with a commitment of being good stewards of the land that has been entrusted to us. We hold ourselves accountable every day.”
While Summit Materials lives up to its belief in doing the right thing “even when nobody is watching,” the company has also found that doing that right thing can create lucrative value in its own right.
Talking to us, Noonan is particularly proud of the work the company has done at two of its cement plants, one in Hannibal, Missouri and one in Davenport, Iowa.
The Hannibal plant takes both hazardous and non-hazardous waste and uses it as a sustainable fuel in its kilns, replacing roughly 50% of its petcoke and coal. Meanwhile, the Davenport plant takes in used blades from wind turbines and converts them into an alternative fuel.
“We just announced a multi-million dollar investment in FlexFuel technology to expand that non-hazardous conversion of fuel, reducing the use of fossil fuels by 50% at our Davenport plant,” Noonan says proudly. “It is sustainable but value-generating for shareholders and employees alike.”
Summit Materials is also the first firm in the US to convert its cement plants to produce Portland Limestone Cement (PLC) which produces less carbon.
Elevated Aspirations
The company serves several key markets. Housing developments and family homes make up approximately a third of the business.
They also serve the non-residential and commercial properties such as warehouses and strip malls.
Summit Materials is also deeply involved in the process of onshoring manufacturing in the US, as the country works to bring home the factories manufacturing electric vehicle batteries, wind farms and solar farms. Finally, there is the infrastructure work Summit Materials puts in.
“36% of our business is public infrastructure, heavily funded by IIJA funding that provides five years of substantial funding to replace roads and bridges,” Noonan says. This is the largest market they serve, which is comprised of public infrastructure, mostly in the form of highway construction materials.
In addressing those markets, Summit Materials has set itself four key strategic priorities in line with its Elevate strategy.
“Those include market leadership to first or second position in all of our strategic markets,” says Noonan. “Our second key priority is to remain asset light. We only participate in the downstream markets where we can be in leading positions. If not, we are happy to partner with the market leaders and let them buy our aggregates. The third element is Environmental, Social & Governance (ESG). We focus on being the most socially responsible business in our sector with a number of initiatives, driving our goal to 25% carbon reduction by 2030 and then becoming carbon neutral. The final priority is innovation. When we launched the Elevate strategy, our customers were telling us they need help to be ready for the future, with new codes coming in and demand for greener buildings. And underpinning all that is our work to enable capabilities in operations and procurement to drive margin expansion.”
Known Quantities
The company’s values make it a trusted name in the industry, but it also does well because the company has grown by acquiring trusted names and earning their trust.
“We operate in a 50-mile radius so that local brand is very important. We acquire strong local companies with brand equity, so there is that recognition of the brand for high-quality rock and high service,” Noonan says. “When we partner with mom-and-pop businesses we continue to invest in that business to grow out the local market.
Strategic partners sell assets to us because they know we will be a good steward of their business and loyal to their stakeholders.”
Of course, Summit Materials has every reason to be loyal, as good talent is a much sought-after resource in their sector.
“It is crucial for all industries right now. When I came into this industry what shocked me was the high turnover,” Noonan says. “Today I understand construction materials is a very different kind of market. Turnover can be as high as 40%, and that is a huge cost and energy drain.”
Summit has made this a real focus for the business, deploying engagement surveys and communication strategies to keep their finger on the staff’s pulse alongside specialists in acquisition and recruitment. But once again, the firm’s values are at the forefront.
“We look at the communities we serve, prioritising diversity and inclusion to make sure we resemble those communities,” Noonan tells us.
Looking forward, Noonan has a clear idea of where Summit is heading, once again guided by the Elevate strategy.
“We plan to continue to be mindful of our debt position, which has been significantly reduced since we introduced our Elevate Summit strategy. We have already divested underperforming assets, generated over $500 million in proceeds, and now have a much stronger company,” Noonan says. “We have also set targets for a return on invested capital. Finally, we are expanding our margins. They were 22%, then 23.7%. We want to get them to over 30%. We are making great progress towards those goals, and our vision is clear. We have announced several smaller aggregate acquisitions this year. We just announced the acquisition of Arizona Materials, a materials-led firm with a strong downstream position. We are seeing a lot of growth in our future.”
