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Long-range planning drives long-term growth

Road construction company boosts revenue by remaining flexible, preparing for future

Long-range planning, and industrial and geographic diversification, is helping Northeast Remsco Construction Inc., a utility and road construction company in Farmingdale, grow despite the shockwaves upending its industry.

Long-range planning, and industrial and geographic diversification, is helping Northeast Remsco Construction Inc., a utility and road construction company in Farmingdale, grow despite the shockwaves upending its industry.

“We’re negotiating projects now that won’t start until 2013 or 2014,” said Rolando E. Acosta, CEO of the 200-plus-employee company that’s in its second generation of family ownership. “In this industry, the lead times can be very long — and revenue can fluctuate a lot depending on the projects you’re working on. So you have to always look three years ahead.”

Northeast Remsco’s revenues rebounded from $86 million in 2009 to $125 million in 2010, thanks to some big jobs, like a $55 million project from the New Jersey Turnpike Authority the company won in January to widen the Bass River Bridge on the Garden State Parkway.

The company also plans to bid on another widening project just north of the Bass River site, also on the Garden State Parkway, Acosta said.
But competition is fierce, he added. Average bids are coming in about 20 percent lower than before the 2008 recession, which has “forced us to redeploy our work force,” he said. “You assign fewer people to an assignment, and your employees have to be more flexible.”

Right now, Northeast Remsco is running two large projects: the Bass River Bridge job and the overhaul of a pumping station at the Gowanus Canal, in Brooklyn, N.Y., for New York’s Department of Environmental Protection.

The tough times have helped drive the company to expand its specialties as a way to counterbalance its traditional project load, which he said can be very cyclical.

At the end of 2010, it bought Huxted Tunneling, a Florida-based firm that can handle a variety of pipe and cable installations, like microtunneling — a technique that streamlines the process of installing industrial piping underground.

The company also previously acquired Caldwell Marine International LLC, which does underwater cable installation and heavy marine construction.

“Our geographic reach is also being extended in this economy,” Acosta said. “We were primarily in New Jersey and New York City. Now, we’re also in Connecticut, Maryland” and other locations.

Large, multiyear jobs like the Garden State Parkway project provide some security, while smaller ones — like a $2 million project for New Jersey American Water Co. that involves upgrading chlorination facilities at some of the firm’s plants — lets Northeast Remsco put its extensive stable of machinery and equipment to use.

“It’s local, which is good,” Acosta said, referring to the New Jersey American Water projects. “And it’s a longtime customer.”
New Jersey American Water senior engineering project manager Robert Biehler said the company has been working with Northeast Remsco on water treatment plant expansions, and “they’re very responsive. Even if we have to put in (project) change orders, the company does them in a fair and reasonable way.”

Northeast Remsco originally grew by taking on numerous, smaller projects simultaneously, Acosta said, “but now we’ve done somewhat of a shift to building fewer, larger projects, but supplementing them with smaller projects.”

In a sign of the tough times, Acosta noted that the labor unions his company deals with have become more flexible about work arrangements, as their own members seek out jobs.

“The unions are aware of the economic situation,” he said, noting that his company has to compete with newer, nonunion construction firms. “They would like to make us more competitive with all contractors.”

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