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GCC Dacotah cement plant raises prices due to EPA regulations

World Cement,

In Rapid City, South Dakota, the GCC Dacotah cement plant recently announced it will raise its prices by 5% to cover costs associated with new Environmental Protection Agency emissions regulations. The increase in prices is likely to be passed on to consumers and experts fear this could ultimately mean less work for builders and contractors.

Neal Schlottman, president of Rapid City's SECO Construction commented, "the regulations are killer to jobs".  He said business owners might put projects on hold because of rising construction costs. Even small projects, such as a homeowner’s new garage floor, will cost more. "If you don't build the building, there are no jobs for the construction workers," Schlottman said.

A GCC customer, Hills Materials buys cement to create ready-mix concrete. The company's plants manager Tim Foerster, said his company has been quoting the higher price to contractors for a few months now. When asked how contractors responded to the increase, he said, "You take it to the market as best you can," passing as much of the cost along as possible.

Steve Post, the plant manager at Rapid City noted that other cement manufacturers throughout the US are making similar pricing moves in order to pay for the cost of new and updated emissions-control technology.

The purpose of the EPA regulations is to limit emissions considered harmful to human health and the environment. Previously most emissions were not regulated in cement plants. GCC stated that the new standards were not set based on a level of safety to health, but rather according to the lowest demonstrated levels achieved by the “best performing" cement plants.

The company reported an estimated US$3.2 billion cost of capital improvements industry-wide and the necessity to shut down some plants. However, the 92 employees at the Rapid City plant are expected to be able to keep their jobs.

Post explained that the cement plants have to be in compliance with the new regulations by 9 September 2013, and GCC Dacotah will have to spend ca. US$3 million this year alone to prepare for the changes. In total, GCC America, which has two other cement plants, will spend ca. US$40 million to make the improvements by 2013, he added.

Builders and contractors are facing cost increases in other areas too. City public works director Robert Ellis said the rising fuel costs is an even bigger factor than a 5% increase in cement costs, when it comes to street construction in Rapid City. "We see more volatility in gas prices," Ellis said. "Daily they change by 5 – 15%."

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