Sand and Gravel Market

Hanam Canada has the most extensive and up to date knowledge of the west coast sand and gravel market. Our expertise includes:

• Visits to all ready mix plants and many major construction companies in coastal California, Oregon and Washington.
• Market studies  to support sand, gravel, and crushed rock sales for more than 8 different clients.
• Detailed knowledge of all aggregate loading and unloading ports from Ensenada, Mexico, to Sayward, Alaska.
• Shipping company, equipment and cost information for all scales of operation.
• Extensive government information data base.

Vancouver Aggregate Market

The main potential buyers of barge delivered gravel in the Lower Mainland are listed in Exhibit 6. The Vancouver market is very tightly controlled by Lehigh and Lafarge. There is very little competition except that Polaris, Port McNeil, has gained business from a new entrant Burnco Ready Mix of Calgary.

            Exhibit 6.         Lower Mainland Buyers Near Barge Terminals

Lehigh has five barge unloading terminals in the Vancouver area all supplied by their own pit a Sechelt. Some of the unloading terminals such as Richmond and Surrey have space for up to 8 piles of different products. But others such as the River Road terminal are quite cramped for space. At Delta the piles overlap each other and there is no room for any additional supply such as from Nanaimo.  Lehigh’s Surrey depot immediately east of the Putollo bridge has ample space and might be a convenient site for offloading. There are several sawmills earby that would provide a cost reducing return trip for tug boats.

Lehigh’s ready mix operations in Vancouver are under the Ocean Construction and Remple Brothers Concrete subsidiaries. There is a Remple plant adjacent to each aggregate depot. There are also Remple plants some distance from the terminls such as one of two plants on River Road. The highest return could be gained if an operation in Nanaimo could compete for Remple business directly. Some Rempel ready mix representative stated very strongly they can not buy from anyone except their own in house Construction Aggregates subsidiary. However, Remple’s concrete plant in Coquitlam is located next to Cewe’s pit and seems to purchase aggregate from Cewe. With the closure of Lehigh’s Victoria pit, many of Remple’s other plants are very vulnerable to supply interruptions at Sechelt. Lehigh’s Ocean ready mix plant on Mitchell Island is on the on the water and has its own barge ramp. It is located beside Terminal Forest Products. Lehigh operates fly ash terminals in New Westminster and in South Vancouver. They have a large concrete pipe plant in south Vancouver.

Lefarge has the largest ready mix plant in the market area at Kent Street in South Vancouver fust east of the Oak Street bridge. Like the Lehigh sites, barges can be unloaded by dumping into a hopper with a conveyor to one or more piles. They can also drive on the barges with trucks or loaders. Lafarge has a large prefabricated concrete structures plant, Conforce, in Richmond beside their cement plant. The conforce plant can unload barge loads of aggregate. A company related to Lafarge, RMC is on the west end of Mitchell Island. This is a very modern new ready mix plant. They bring aggregate from Columbia Bitulithic’s barge unloading and asphalt plant located nearby and also on Mitchell Island. RMC does not have their own barge ramp. However right beside RMC is North Arm Transportation, related to Arrow Transport, and they have a barge ramp that could possibly be used to supply RMC independently of Lafarge. The source of the aggregate is Lafarge’s Egmont pit near Sechelt.

Competition in Vancouver

The main aggregate competitors in the Lower Mainland market are listed in Exhibit 7.

Exhibit 7. Sand & gravel competitors in Lower Mainland

The main competitive suppliers draw their gravel from three pits located near Sechelt. Lehigh Sechelt pit is the biggest single source of supply for the Lower Mainland. Lafarge and Cewe pits at Egmont and Jervis Inlet are two other suppliers near Sechelt.  The leading supplier for sand is Mainland Sand and Gravel, the distributor for sand dredged from the Fraser River by Fraser River Pile & Dredge.

Lafarge, Cewe, and Allard each operate large gravel pits on the Coquitlam River. These pits are located in the hills north of Coquitlam and supply the Coquitlam. Port Moody and North Burnaby areas. Pictures of some of their operations are provided in Exhibit 7. The pits are not competitive in the New Westminster, South Burnaby and Surrey markets which are served mainly by barge.  

Lehigh Cement subsidiary Construction Aggregates Ltd. has a 4,000 t/h shiploader at Sechelt. This shiploader is connected by conveyor to one Canada’s largest gravel pits.  The pit processes about 11,000 tons per shift and 3.5 million tonnes per year.  The plant produces 12 standard and over 40 blended products including washed aggregates, crushed rock, road base, asphalt materials, and specialty sands. The average barge load is 4,700 tonnes. Barging is handled by Lehigh’s Marine Division which operates a fleet of five tugs and 15 barges. The company exports aggregates to its division in San Francisco. Lehigh is one of only two companies with import terminals in California and it would be very difficult to establish new ones because there are few if any suitable locations. Some specialty golf course sands have been shipped as far as Hawaii.

Both Lafarge and Jack Cewe Ltd. have gravel pits at Jervis Inlet. The Lafarge pit is at Earls Cove. The water depth at the Cewe’s present wooden dock is 20 feet and they are planning to extend the dock to deeper water. They cannot dredge in front of the existing dock without causing damage to the dock. The cost of the new loader was estimated at $6 million.  One of the problems with the Cewe pit is that it has a high proportion, 65% rock. A related issue is that Cewe’s Coquitlam pit has a high proportion of sand, 70%, and requires rock from the Jervis Inlet pit to balance customer demands. Exports from Jervis Inlet would require significant crushing to match the sand and rock output. Cewe does not have a ready mix plant of its own but seems to supply Remple in Coquilam and does supply Lafarge’s Kask subsidiary in Burnaby.

Allard Sand and Gravel is the most southern and smallest pit of the three located on the Coquitlam River. The company appears to be working closely with Cewe as they shared some facilities. A lot of the Allard material appeared to be hauled in from elsewhere. The Allard pit is located against the side of a mountain and appears to be mainly sand. There is a large wash plant.

Mainland Sand and Gravel has large barge unloading and storage sites in Surrey and Richmond. About 80% of the material stored seems to be dredged river sand. At their Richmond depot they share the site with Fraser River Pile and Dredge. The river sand is too fine for use in concrete. It is used throughout the area for preloading new construction sites and to bring up the height of building sites near the river.  The Mainland sites did not use hoppers or unloading conveyors. Instead trucks drive onto the barge and are filled with front end loaders. The trucks then dump on various piles throughout the extensive properties.

Aggregate Prices

Aggregate prices are summarized in Exhibit 8 and vary by the processing required and the delivery location. All prices include a $0.30 to $0.40/t local government environmental tax. Pit run gravel is priced at about $4/t, sand at $7/t, washed concrete sand at $12/t, ¾” concrete rock, $14/t and 3/8” pea gravel at $18/t. There is a great deal of variation around these prices depending on quality. There are several competitors for each type of product.

Exhibit  8.  Vancouver Aggregate prices

Sand, pit run and road base prices $/tonne

¾” rock prices, costs and margins $/tonne

3/8” Rock prices, costs and margins $/tonne

Barging and Vancouver delivery costs

The barges serving Vancouver have a capacity of 3,000 to 5,000 tonnes. Most of the barges have a loader, hopper, and conveyor on them so they are self unloading. They are open at one end with a prow on the front and with 6 foot high side walls. At many unloading locations there is a both a ramp for unloading by truck and a receiving hopper with a conveyor to a stockpile. The barges typically hold 20 foot high piles of two different products. The prices for several options for loading and towing gravel barges to customers in the Lower Mainland are summarized in Exhibit 9.

Exhibit 9. Barge loading and transport prices (excludes delivery costs)

Truck haul distances for material barged to Greater Vancouver customers ranges from 0 to 40 km. The average delivery load in the Vancouver area is 17 mt.  Dump truck and trailer combinations carry 28 mt, and bottom dump truck and trailers, 40 mt.

Construction Aggregates transports aggregates by barge and truck. There are more than 8 major barge loading sites, two ship loading sites, and at least 8 barge unloading sites in the South west BC coast market area. These sites are privately owned. 

There are about 20 sites in the Vancouver area where gravel barges are unloaded for ready mix concrete, asphalt or construction. The largest operators are Mainland Sand and Gravel (2), Lehigh (5), Lafarge (including Columbia Bitulithic) (4), Cewe (1), Imperial Paving (2), and Gencor (2). Mainland unloads river sand for Fraser River Pile and Dredge and their Surrey and Richmond depots are very large but they contain mostly river sand. This sand is used for preloading construction project sites and as fill along the river. Mainland also unloads crushed rock barges from their Abbotsford quarry. 

Lehigh has five aggregate terminals in the Vancouver area all with ready mix plants beside them: Delta, Richmond, Surrey, Langley, and North Vancouver. They are they largest receiver of barge delivered concrete aggregates in the market. For example at Richmond, Lehigh North West Materials’ subsidiary Construction Aggregates operates the Duck Island Depot. Remple Bros. Concrete is located on the adjacent site. There are about 9 large gravel piles on the site, a barge unloading ramp and a hopper beside the barge with a conveyor system to the piles.

Lafarge has barge receiving terminals in Richmond and Vancouver.  Their barge unloading site in South Vancouver is the largest supplier to the Vancouver market. Several of the Lafarge barge unloading sites are operated by their subsidiary Columbia Bitulithic.

Burnco Ready Mix in South Burnaby and Allied Concrete on Mitchell Island in South Vancouver each receive aggregate by 5,000 tonne barge. Burnco gets it from Polaris, Port McNeil, and Allied gets it from Lehigh.  Imperial Paving and another paving company Gencor each have at least two barge unloading sites in the area.

Victoria, BC Aggregate Market

The major sand and gravel users are listed in Exhibit 10. Butler and Ocean both have their own pits that can produce sand and gravel to their required specs and there is little incentive for them to change to purchasing from outside companies. Independent Concrete, Langford, and Trio Ready Mix, Saanich, are the only buyers of concrete aggregate and both buy relatively small amounts, about 100,000 t/y in total.

Exhibit 10          Victoria major sand and gravel users

Butler Bros. is the largest concrete aggregate user in the Victoria area. They buy cement from Lafarge. They receive cement at a Lafarge barge terminal in downtown Victoria adjacent to Butler’s ready mix concrete plant. Lafarge has offered them aggregate from Edgemont by barge but Butler prefers to use their own aggregate. Butler also has ready mix plants in Saanichton on Keating Cross Road, in Sooke and in Duncan. Except for Victoria, all the ready mix plants are located in huge gravel pits. The downtown Victoria site receives gravel by truck from the Saanichton gravel pit. Although they are on the water and can tie up barges there they do not intend to change to outside supplies. Butler’s Duncan pit is a very large operation but some of the material on this site appears to have been hauled from somewhere else rather than being mined in this pit. The Duncan plant has a large wash plant and the gravel quality is not as good as Nanaimo River. The access road goes through some residential areas. 

Lehigh has two operations on the Victoria waterfront: Ocean Concrete and the Victoria Materials Depot. Both receive 2,500 tonne barges of gravel from Ocean’s own pit in Seachelt. Ocean estimates it would cost $3/t more to truck aggregate from their Nanaimo pit than to bring it in by barge from Sechelt. The waterfront beside Ocean is being redeveloped and the site is being restored. They do not know yet if the restoration will include some dredging to accommodate larger barges. At present Ocean is limited to 2,500 tonne barges but their Victoria Materials Depot can accept 4,000 tonne barges. If material is brought from Sechelt in larger barges they would need to tie up the barge at Victoria Material Depot and transfer part of the load to Ocean by truck. Smaller 2,500 tonne barges would be preferable unless the site remediation project includes dredging.

Independent Concrete is the most likely buyer of concrete sand and pea gravel from Nanaimo. It seems to have relatively new equipment including new ready mix trucks. The company has a rock quarry on Millstream Road in Langford where they produce crushed rock for their concrete. They buy concrete sand mostly from Evans Sand & Gravel, Duncan, but also buy some from Hub City Paving, Nanaimo. They receive it in 40 tonne loads. The company buys its cement from Lafarge.

Trio Ready Mix, Saanich, is a small operation that buys all its concrete sand and gravel from South Island Aggregates, a small operation, located on the highway 5 km south of Duncan. Trio is located in a residential neighborhood and seems to be in decline.

Island Paving has plants on the waterfront in downtown Victoria and at Keating Cross Road in Saanichton. They use 80,000 t/y of aggregate in Victoria and 200,000 t/y in Saanichton. They also have a rock quarry off Millstream Road in Langford. For the Victoria plant they receive 2,500 tonne barges from Lehigh’s Metchosin pit. They have occasionally received 3,500 tonne barges. They are revamping their barge system to allow them to receive larger barges from Lehigh’s Sechelt pit or from Island Aggregates in Nanaimo. Cory Sangha who owns Island Paving may be a friend of the Mayer family. Island Paving is always looking for properties and bid recently on a property in Parksville through their Haylock affiliated company. 

Capital City Paving has their own rock quarry, Basic Rock Products, on Millstream Road in Langford. The owners of Capital Paving also own Evans Redi Mix and Evans Sand & Gravel, Duncan. However they do not have a presence in Nanaimo.

Competition in Victoria

Two pits in Duncan compete for some business in Victoria. Evans Sand and Gravel, related to Capital Paving, has some business from Independent Concrete, Langford, and competes with Butler in the Duncan market. The two pits are located on hilltops southwest of Duncan and are fairly close together.  Evans has a wider variety of product sizes in stock than most other pits. It is a relatively large operation. However some parts of the pit looked quite dirty. Evans has a huge stockpile of excess sand.

A smaller operator, South Island Aggregates has a gravel pit 8 km south of Duncan behind a small Cobble Hill shopping plaza on the highway. This is a very small sandy deposit and their main customer is Trio Ready Mix. South Island Aggregates also operates a small rock quarry at the top of the Malahat highway on the road to Shawinigan Lake.

Butler’s pit in Sooke is the main supplier in the Sooke area and also supplies Colwood. This pit seems to be very sandy and would not likely be a strong competitor in the Victoria market. Jordan River Sand and Gravel, about 10 km west of Sooke, competes with Butler’s Sooke pit. There are three other locations near Jordan River where gravel pits could be established and this area was predicted in 2003 to become an important supplier to Victoria over the long term.  Many independent gravel trucks were observed hauling gravel along highway 14 from Sooke and Jordan River to Colwood.

Competitive rock quarries are operated by Island Aggregates, Capital City Paving, and All-Fun Quarry all very close together on Millstream Road.  All-Fun quarry is owned by Frank Wille of Victoria and includes a water slide, a golf driving range, baseball batting cage, go cart track and racing car speedway. It seems to be developing as a major entertainment center. Crushed and sized rock is sold based on Lehigh’s Victoria Materials Depot price list. South Island Aggregates also has a quarry at the top of the Malahat highway.

Aggregate Prices

Aggregate prices are summarized in Exhibit 11 and vary by the processing required,  delivery location, and on quality. A price of about $16/t delivered by truck or in 2,500 tonne barges would be competitive for ¾ inch concrete rock at Ocean Concrete, Victoria. This price is needed in order to compete with Ocean’s own supplies from Sechelt. The barge rate from Duke Point to Victoria is $6.00/t. With this rate, the total cost for trucking, barge loading, and barging to Victoria is about $11/t which is very close to a direct truck haul from Nanaimo to Victoria.

Exhibit 11. Aggregate Prices in Victoria

Sand, pit run and road base prices $/tonne

¾” rock prices, costs and margins $/tonne

3/8” Rock prices, costs and margins $/tonne