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Suppliers struggle to meet demand

Bermuda?s concrete block suppliers are struggling to meet demand with outfits reporting they are selling out of block as quickly as they can make it.

A booming construction sector ? with increased activity on both residential and commercial fronts ? has led to a run on block as well as other building supplies.

Add to that the property damage after Hurricane Fabian swept through the Island last September ? causing up to $225 million in damage, according to insurance industry estimates ? and you have an industry that is working virtually all available hours.

The latest statistics from Government, through the first nine months of 2003, showed that the Island?s builders were humming along with especially high demand (compared to the previous year) for development on the residential front. And Government said it expected that not only would that activity have surged as a result of devastation after the September 5 hurricane, but that building projects would

The Island?s leading suppliers of concrete block ? Bierman?s and SAL ? both said they are working longer hours to try supply the needs of the Island?s building firms, and SAL has also imported block to augment supplies.

Concrete block is not the only item flying off the shelves either, with SAL CEO Bill Morrison telling this week that there is a run on all building materials.

A shortage of concrete block especially was said to be a problem that had persisted for months. There have also been reports that firms have sometimes had their truck drivers travel to the supplier in the early hours of the morning in order to be able to get in the door first for supplies as soon as the store opens, and before the day?s supply sell out.

Indeed, the level of demand has Bierman?s looking at bringing in additional workers to run a second shift.

Owner and operator Mike Bierman, who has been running the concrete products company for 26 years, said he discourages the early morning queues. But he conceded that he was selling out of concrete block as quickly as it was being made.

He added that he has seen a run on concrete block at least half a dozen times in the last two decades.

?This is not unusual. It is going as fast as we can make it, and we are trying to get in overseas staff in order to run a second shift. We open at 7a.m. and a fast as we make it, it is sold.?

Although Mr. Bierman said the firm, which was set up by his father 46 years go, had not imported any concrete block, he had heard that others on the Island were in a bid to keep up with demand. He added that the shortage had nothing to do with Bierman?s being able to source sufficient cement a key ingredient in making concrete block but a case of not being able to produce sufficient supply to meet demand. The situation had reportedly escalated to the point that Cesar Oliveira, of Cesar?s Construction which specialises in residential work, told in December that he could not get his hands on block as the large firms were waiting through the early morning hours to snap up supply. Still, Mr. Bierman said: ?This is nothing new. Every so often we have a big spurt (in demand). There is no mystery here.?

He added that increased demand did put pressures on the business, but if he is able to start a second shift, they could increase their manufacturing output by running until six or seven p.m.

Mr. Morrison, said there had been a surge in demand for concrete block some months ago and then it slowed a little but in recent weeks there had been a renewed run on the product. He added that demand for block and all other building supplies was unlike anything he had observed in his 23 years with the company.

?It is constant, everyday. It is definitely a boom market. This is the highest demand I have ever seen in my time. There have been occasions when we get runs but this time around, demand seems to be extraordinarily high to me.?

On the concrete block front he said SAL was selling out as quickly as it could make it despite the company having ramped up production to six days a week. They have also imported block in a bid to ?satisfy demand?.

Mr. Morrison said SAL, which also runs a quarry, a full-service building supplies store, and two lumber and heavy material yards, has plans to upgrade its concrete block plant by the end of the year. That development will reportedly allow SAL to double its output of the much needed commodity. It could however be some time before SAL, Bierman?s and other building suppliers get a breather. Signs are that the building sector could continue to boom with Government predicting demand would continue at least through the year.

In Government?s annual budget statement in February, it was predicted that ?the international business sector (would) continue on its path of steady growth and that, in part due to that, the construction sector will continue to operate near full capacity?.