Dan Harrington graduated from Penn State in 1974 and has been associated with the cement and concrete industry ever since. He worked in various parts of North America in the construction chemicals business before joining Scancem USA in 1993. For Scancem, he was the CEO of Allentown Cement Co. and the Vineland Group; the Chairman of the Board of Continental Cement, Hannibal, Mo.; and served on the Board of Directors of Norval, Inc. and Continental Florida. On Jan. 1, 2000, Dan joined Lehigh Portland Cement Co. as President of the Northern Division, the capacity in which he now serves.

Dan earned an MBA in Finance at Fairleigh-Dickinson University, an MA in Executive Management, and a PhD in Executive Management from the Claremont Graduate School. He serves on the Board of Directors and the Executive Committee as Chairman of the Portland Cement Association (PCA). He also is a past President of the Northeast Cement Shippers Association (NECSA).

Cement Americas: The biggest news lately concerning Portland Cement Association is that you've finalized your new strategic plan. Tell me how that went — any changes in direction, new ideas, or new strategies?

Dan Harrington: The process has been pretty interesting. We actually started it last November at the 2002 board meeting when we had a small workshop that got the executive committee and many members of the board working on the issue of creating a plan. We hired a facilitator and created a strategic planning committee, which is basically the executive committee. We met four times throughout the year to analyze key issues.

I would say that the major issues that we focused on were market promotion, regional and national coordination, government affairs, and sustainable development. A common thread that ran throughout the strategic planning process was measurement of the markets we're in and the markets we are in that are not being measured. I think we clarified and defined our situation so that we would have a reliable and consistent system for measuring our promotional activities.

There are several task groups that came out of the process. One was in the area of government relations and another was in charge of creating a budget from the ground up — we call it “zero-based budgeting.” Then there was a group that analyzed all of the market segments to assign a priority to them based on tonnage and probability of market entry. The ultimate return on the investment of promotion in these markets was part of the task also. Those task groups came back to the major committee with recommendations of which parts we should keep and modify. So, in effect, we ended up with a plan that improved interaction of the regional promotion groups with PCA and each other, identified major markets for promotion, emphasized measurement, and optimized internal resources.

We've also come out of it with an impressive set of work about each program and each department at PCA from the zero-based budgeting perspective. The optimization of all of our internal resources has been included in our strategic plan.

CA: In terms of promotion, can you give me some specifics about the ideas that came out of the planning meeting? Are there any markets that you identified that maybe PCA wasn't targeting before or areas that you were going to target more intensely?

DH: We identified five major markets in which we or other associations have been promoting. Those five major markets are the highway market, the streets and local roads market, the soil cement and roller-compacted concrete pavement market, the residential construction market, and finally, the parking lot market. Historically, each of those markets is large, and it takes a lot of energy, people, time and, of course, funding to really impact the use of concrete in those markets. So, marketing to each has been divided among several associations.

For example, highways, streets, and local roads have historically been promoted by the ACPA [American Concrete Pavement Association], and we think that's excellent. We appreciate the relationship that we have with them, and we want to see that continue. Soil cement, RCC pavements, and residential construction have historically been promoted by PCA, and we're going to continue doing that. For the parking lot market, which is large, the lead association has been NRMCA [National Ready Mixed Concrete Association], and that's working well. We like the assignment of these major markets, and we felt like we're making progress in all of them. We've definitely got accomplishments we can point to; we show market share gains in all of them. And, we don't expect that to change in the next three years of this new strategic plan, which begins in 2004 and ends in 2006.

CA: Was there also discussion about the operation of regional promotion groups?

DH: Yes, they're very independent and they are funded by the cement companies in a particular region. Their boards of directors are the members of the cement companies in those regions, and they have an executive director and some have additional staff personnel, too. They target the same markets that are outlined in the national programs, but the emphasis may vary from region to region. For example, some regions might have a strong emphasis on residential construction, but do not place as strong of an emphasis on streets and local roads. Other areas might have a very strong emphasis on the parking lot market. The beauty of the local shipper groups is that we have local cement, concrete, and professional promoters to the highest priority markets for that particular part of the country. This is an aligned and team-oriented approach.

What was missing before, we felt, was communication of the important goals and objectives being pursued locally and a solid mechanism for sharing best practices and benchmarking our successes. Sometimes, that wasn't seen or understood by the national group. Likewise, those in the field sometimes didn't receive feedback from the national level. So, we've tightened up the communication, the governance, and the way these groups work together and provide feedback and information to PCA. Accordingly, we have created a position of vice president of the regional promotion groups whose job it is to work with the local boards and executive directors at the shipper groups to ensure that good communication, good programs, and a consistent approach is taken across the country.

CA: Has that position been filled already?

DH: Yes, George Barney will assume this newly created role.

CA: You mentioned the five areas that you were targeting. Was there any discussion about water infrastructure, a topic that has been widely discussed of late.

DH: Yes, that's part of our public works market segment. There's no real change to our approach to that market: we have a very effective program going; we measure it well; we've shown some growth the last several years; and, that's still going to be an area of emphasis. The reason it didn't make the list of five I gave you earlier is that the overall tonnage is not nearly as significant as the five market segments I mentioned.

For example, we have an Engineered Structures committee, and they promote concrete for high-rise buildings, bridges, and structural, vertical building components primarily in the manufacturing and commercial sectors of construction. So, while we emphasize five, we do not plan to minimize efforts in other market segments in which we currently promote.

CA: You mentioned sustainable development, which is under discussion lately far more than it has been in past years. What is the discussion there? What are the goals?

DH: That's another new part of the plan that wasn't in existence in the last plan. There's been a lot of activity primarily in the northwestern part of the United States, and there is beginning to be recognition of this important area in other parts of the United States, too. Fundamentally, building materials are being evaluated by the design community for their environmental friendliness. There are definitions of what constitutes environmental friendliness. For example, a program called LEED [Leadership in Energy and Environmental Design] rates the energy efficiency of a building in its entirely. Owners, developers, architects, and engineers are starting to look at the entire building and its overall impact on the environment.

It's a large field, and it's getting so large that we feel that as an industry we have to participate in it and position our products — cement and concrete — in a favorable light to the specifiers and provide them with technical, environmental, and promotional information that displays the nature of our products. Frankly, we are very focused on our environmental responsibilities, and we want people to think of concrete and cement in a positive way.

CA: So, this is chiefly a promotion of various environmental benefits of cement and concrete?

DH: Very much so. Also, it is an area for displaying our technical and manufacturing competencies. We recognize how important it is to our industry to stay in the lead or to participate early on in the program as opposed to having to play catch-up down the road.

CA: Will this emphasis on the environment also include recycling or recycled materials, not necessarily recycled concrete, but recycled aspects of materials like slag and fly ash? Or, are you going to leave that to other promoters?

DH: Certainly. Before I go further, let me add that we are considering creation of a committee on sustainable development, which we don't have right now. We have hired a director of sustainable development at PCA. His name is David Shepherd. That's the level of commitment that came out of the strategic planning process and is included in the strategic plan itself.

Now, back to your question. There are two fundamental components of our activity in the sustainable development area. First, there's how we manufacture cement by utilizing different techniques and processes such as the use of alternate materials, supplemental fuels, recycled substances, or other co-products. The type of energy that we consume in our kilns and the use of blended cements also are areas of focus.

Then, there's the other major area, which is promotion, where we actually go out and talk to civic groups, specifiers, regulators, and government officials about concrete and how it truly is environmentally friendly due to responsible techniques being used in its manufacture. Therefore, it's the desirable product to use for highway pavement or for a bridge or for a commercial high-rise building.

What is happening is that most of the cement companies are tending to their manufacturing processes. Most companies consider that an individual-company issue. But, the association's role will be more on the promotional side where all of us working together create a united voice and presence on behalf of the industry for the use of cement and concrete.

CA: You mentioned government affairs as another one of the major areas. What's being developed for that plan of attack?

DH: For the most part, we're satisfied with our activities and our lobbying efforts in Washington, D.C. We've been there for many years, and this plan emphasizes the need to continue to have the same successes we've had in the past. However, we have noted and are going to try to react to a need for greater local presence than we've had in the past. Like promotion, legislative activity, and government affairs activity is best done locally. It's hard for a centralized federal approach like we've had over the years in Washington, D.C., to be effective out in Texas or California or Michigan.

We recognize that we have to become more proactive locally. We see the vehicle for that to be the shipper groups, or regional promotion councils, when it's identified as a need and when the local cement companies agree that they should become more politically active locally. Then, they will add that to their goals and objectives along with the promotional activities they're already accomplishing.

CA: With respect to market trends, are there certain sectors — including or beyond the five major areas mentioned previously — where you're anticipating some significant growth in the coming years?

DH: There might be some minor shifts, but frankly, we don't detect any major changes in the consumption of portland cement by market segment.

CA: We talked before about supplemental materials, such as slag and fly ash. In general, outside the importance of their role in the environmental arena, how do these supplemental cementitious materials fit into the big picture? PCA doesn't traditionally cover that area, yet almost everyone producing that material is a cement producer, so there's quite a bit of overlap there.

DH: PCA does not deal with them on the promotional or government affairs levels. We do recognize their presence and address them in education, training, or in some technical work. There's the Slag Cement Association, which has been created to deal with slag and pozzolanic materials. As you pointed out, several cement producers are also in the slag and ash businesses. PCA is a cement organization, and we've got plenty to keep us busy just in educating, researching, product development, and promotion of cement. Certainly, in the next couple of years, I don't think that focus will change.

CA: Still, since it's essentially a replacement — in fact, an enhancement — material taking the place of sometimes 40% to 50% of what used to be portland cement, is cementitious supplemental material such as slag or fly ash viewed as a competitor by PCA's membership?

DH: We think it's a very valuable part of the building materials chain. The concrete industry utilizes it. It adds value to concrete. It gives properties to concrete that make it more workable or give it higher strength. It's responsible to use in terms of blended cements because when it's used in a ton of cement, it stretches clinker a little further, which helps on CO2 emissions for the industry — a positive direction for the environment. So, we don't feel a lot of conflict with fly ash, slag, or pozzolanic materials. They're part of the industry, have been used for so long, and are accepted. We've worked together on promotion issues, governmental issues, and we share customers. Many members of PCA are vertically integrated: they also have concrete companies who use these products in their concrete companies. They're very complementary of each other.

PCA does not promote these products, but recognizes their existence and their value to the industry.

CA: In the last year, certain worldwide cement or construction materials companies have vowed to decrease emissions by a certain level. Is this a sign that companies have realized that they can both be environmentally responsible and be cost-effective?

DH: Absolutely. When you're doing the right thing for the environment, odds are you're running your plants well, because they go hand in hand. For example, when you've got a clean plant and housekeeping is good, which minimizes fugitive dust, it typically shows you've got a very good group of employees being well managed at a site and they're keeping an eye on other parts of the cost structure, like maintenance costs, purchasing and procurement costs, or operating efficiencies of the kiln lines, too.

We've all made investments and will continue to improve our cost structures but these decisions are made in concert with environmental stewardship. Those interests are not mutually exclusive at all. There's technology for the manufacturing process that improves both, not to mention management techniques and the type of people who work in our industry. They are committed to improve our industry in all ways.

CA: One area in which our magazine has been working with PCA is recruiting and retaining of employees. In the last few years, it has become a fairly important issue, mainly because many in the industry aren't able to do those things effectively. What is PCA doing to help its member companies hold onto employees and recruit out of colleges and perhaps other industries?

DH: We tried to get involved in that area during the last several years, and we realized what a huge area it is, because it's not just a cement industry problem; it's a construction industry problem. If you talk to a ready mix operator, he or she might tell you that they're having trouble retaining and recruiting drivers. If you talk to just about every major concrete contractor in America or Canada, they've had trouble recruiting, training, and staffing employees to do concrete work. So, it's an industry-wide problem.

In the cement industry, each company is attacking it a little bit differently. What the association has done is create some additional research grants from our education foundation to reward and stimulate research at the masters degree and doctorate degree levels in the field of cement and concrete. So, we're trying to stimulate research and academic involvement as an association, which hopefully will lead to more folks coming out of schools wanting to be part of the industry.

Another major effort is being made by Manufacturing Technical Committee. This committee has been active in addressing the issue head on with respect to where do we go, what schools can we recruit from, how do we position the industry as a good place to work? So, there has been some activity there. Of course, all of the individual companies have their human resources departments and their engineering and their technical people constantly out searching and recruiting at universities and technical schools to attract folks into the industry. We also have the the Education Subcommittee of MTC still in effect providing member companies guidance with recruiting efforts, and we'll keep moving forward on that one.

CA: Be honest, how much of a pain is it for PCA members that Congress won't pass a new, long-term TEA-21 follow-up? It has to be frustrating.

DH: We're very frustrated by it. You've seen the statistics, you've probably reported them — the tens of thousands of jobs per billion dollars of construction. We are very frustrated as an industry to see the possible job creation that the administration could provide and there is a defined and accepted infrastructure need across the country. So, there's a defined and accepted issue, there's the jobs opportunity, and there's been a very successful track record in the past under existing programs. With that being said, we're frustrated that this administration and Congress will not tend to our country's need for improved highways. An additional consideration is the safety needs of our roads and bridges, too. Each of our member companies is attempting to influence this administration, and our government affairs people are working tirelessly with other trade associations to effect a positive outcome.