CONSOLIDATED MINERALS INC. THE RESILIENT LEADERS OF THE POOL AND SPA INDUSTRY WWW.CMINERALSINC.COM
CONSOLIDATED MINERALS INC. THE RESILIENT LEADERS OF THE POOL AND SPA INDUSTRY AT A GLANCE CONSOLIDATED MINERALS INC. WHAT: A 100% employee-owned company and a leading player in the pool and spa industry, known for its vertically integrated operations and commitment to product innovation and quality. WHERE: Headquartered in Leesburg, Florida with operational facilities in Orlando, Fort Worth, and Texas. WEBSITE: www.cmineralsinc.com 1 BUSINESS VIEW MAGAZINE VOLUME 12, ISSUE 07
ESTABLISHING MARKET DOMINANCE THROUGH EMPLOYEE OWNERSHIP With a rich history spanning decades, Consolidated Minerals Inc. (CMI) embodies what it means to be an innovative, dedicated top player in the aggregate processing industry. This 100% employee-owned ESOP operates with a model that has already yielded astronomical growth in share price and share distribution since 2018. 2 BUSINESS VIEW MAGAZINE VOLUME 12, ISSUE 07
This is thanks to the company’s unique spirit, carried by team members who are all deeply invested in the company’s collective future through their individual equity growth. CMI’s refined, strategic approach to materials production and business is undoubtedly the driving force behind its impressive and profitable trajectory, which continues upward year after year. This is because CMI consistently pushes the boundaries of raw materials processing and product innovation within its already well-selected pool and spa niche. By leveraging its subsidiary, Universal Aggregate Solutions (UAS), CMI has been able to strategically diversify its market reach into broader aggregate fields and optimize every facet of its invaluable, vertically integrated supply chain. In fact, CMI’s leadership exercises comprehensive supply chain oversight to leverage incredible foresight over the ever-changing dynamics of its market. Practically, this means identifying emerging trends in adjacent construction sectors and making informed capital expenditure decisions for facility upgrades and potential geographical expansion. Within the operation, CMI is committed to a multistep, multi-stage quality control process that ensures every raw material and every final product, including private label products, is meticulously processed and consistently exceeds expectations from raw materials sourcing through final production at all facilities. The company actively combines attention to detail with proactive measures in sourcing raw materials to mitigate potential supply chain challenges. That degree of processing and thoroughness forms the bedrock of CMI’s production and profitability. That foundation is topped off with a confident and well-prepared team of employee-owners who understand their vital role, creating an environment ripe for sustained success. As an ESOP, those employee owners are the most important factor, as CMI’s success has been realized not just in expanded market share or increased revenue, but in the enduring prosperity and equity growth of its employee-owners. Its position as one of the few companies taking products from natural raw material out of the ground and processed to superior pre-blended finishes is a large contributor to the company’s continued dominance and this is a glimpse into how the entire operation comes together to pull it off. 3 BUSINESS VIEW MAGAZINE VOLUME 12, ISSUE 07 CONSOLIDATED MINERALS INC.
CMI was initially a significant subsidiary of the company, and upon the sale of Florida Crushed Stone in 2000, CMI continued in its stead. Everything changed in 2018 when CMI transitioned into a 100% employee-owned ESOP. This transition concept occurred from 2014 to 2018 and was guided by the company’s employees who acquired the company from the charitable trust to which Mr. Brown had bequeathed it. MASTERS OF THE POOL AND SPA NICHE Consolidated Minerals Inc. is a venerable company with roots tracing back to the post-World War II era. The rise of this company tells a compelling narrative of growth, savvy market adaptation, and non-negotiable commitment to quality. The company’s journey began with Greg F. Brown, a decorated World War II veteran and local icon in Leesburg, Florida, who founded Florida Crushed Stone. 4 BUSINESS VIEW MAGAZINE VOLUME 12, ISSUE 07
While CMI encompasses a transportation arm, a raw materials processing arm, and an internal samplemaking department, CLI stands, according to Johnson, as CMI’s largest “bell cow.” Still, even with such a strong main offering, CMI has become quite savvy in expanding and diversifying its services. The early 2000s marked a significant turning point with the widespread adoption of upgraded preblended finishes in the plaster industry. CMI, with its early forays into basic finishes and stucco in the 1990s, was perfectly positioned to capitalize on this trend.As the swimming pool market evolved, so too did the demand for sophisticated finishes incorporating quartz, pebble, crushed marble aggregates, and glass. This is where CMI’s internal raw materials processing company, Universal Aggregate Solutions, became instrumental in meeting this burgeoning demand, “And here we are, already seven years later, which is hard to believe. Since then, we’ve had astronomical growth in our share price and in the shares we distribute to our employees and teammates every year,” says CEO Blaine Johnson, emphasizing how this move fundamentally shifted all equity, ownership, and responsibility back to CMI’s dedicated employees. And while the efforts of CMI’s employees were a significant reason behind that growth, another factor lies in the astute selection of the pool and spa niche; it was an incredible lane for the company to grow into. Central to CMI’s success in that lane was its subsidiary, CL Industries (CLI), which specializes in plaster pool finishes, bonding agents, and building materials for both commercial and residential pools. To give a clearer picture of the subsidiary’s contribution,CLI’s revenue accounts for approximately 85% of total sales. 5 BUSINESS VIEW MAGAZINE VOLUME 12, ISSUE 07 CONSOLIDATED MINERALS INC.
of scope needed to meet demand, but it also cuts down on some of our costs,” Johnson explains. This in-house processing ensures a consistent supply chain, allowing CMI to precisely monitor and maintain optimal inventory levels. Additionally, the benefit of vertical integration also yields the benefit of greater foresight and capability regarding CMI’s growth strategies. By controlling the processing of its raw materials, CMI can proactively plan and forecast its preblended product output, directly contributing to its competitive advantage and industry leadership. The ability to manage this entire process from raw material sourcing and processing to final product is a distinction that CMI prides itself on. “It’s been invaluable to our growth and where we are in the industry,” Johnson says. Another perk of this higher degree of control, and one propelling CLI and, ultimately, CMI to an undeniable leadership position within the industry. THE POWER OF VERTICAL INTEGRATION AND MULTI-STAGE CONTROL One thing that UAS’s presence allowed for was strategic vertical integration, which has proven invaluable to CMI’s operational agility and scalability. UAS began by processing its sands, a base material for CMI’s pre-blended quartz finishes. This process involves drying the sand in kilns, screening it to precise sizes, and packaging it for finished goods production in CMI’s facilities in Texas and Orlando. UAS also processes and crushes marble aggregates for polished pool finishes. “So, the vertical integration that happens by processing our raw materials is that it allows us to take care of what we use for materials and know where it is within our pipeline, and then project and forecast accordingly. It not only gives us that kind 6 BUSINESS VIEW MAGAZINE VOLUME 12, ISSUE 07
of CMI’s most significant competitive advantages, is its rigorous, multi-stage quality control process. The journey begins at the raw materials plant, where materials are quality-controlled (QC)- checked upon receiving the materials, during production, and once again before leaving the facility. Upon arrival at the pre-blended facilities in Orlando and Fort Worth, these materials undergo another round of quality checks. Subsequently, as these materials are combined with other sourced components like cement, marble aggregates, etc., they enter the mixing process. The final pre-blended products, typically packaged in 80-pound bags, undergo a final QC check before shipment. “So, we have a multi-step, multi-stage, multi-facility process from original sourcing to the final product,” Johnson confirms. Each bag is meticulously tracked with batch numbers and QC codes, ensuring complete traceability. This comprehensive system enables CMI to trace any product to its original raw materials, production date, and shipment details, allowing for a thorough investigation in the event of a market concern. This granular oversight, from bulk material to the final product applied to a pool, sets CMI apart from its competitors, providing unparalleled product quality and consistency. MARKET ADAPTATIONS FOR FUTURE GROWTH CMI actively balances its established position within the pool and spa niche with a proactive exploration of new opportunities in adjacent construction sectors. As a pioneer in polished pool finishes and mini7 BUSINESS VIEW MAGAZINE VOLUME 12, ISSUE 07 CONSOLIDATED MINERALS INC.
pebble products, CMI has a deeply entrenched market presence. “But even with the entrenchment we do have, we’re always looking for better opportunities with different-sized aggregates and accents that we put in there,” Johnson confirms, explaining that beyond the pool industry, CMI is expanding its raw materials offerings from the UAS facility into broader aggregate fields. While the pool construction market has seen some contraction in recent years, CMI remains optimistic about a stronger second half of the current year, anticipating a rebound in discretionary backyard spending and a potential decrease in interest rates to further stimulate real estate activity and growth. To prepare for that, CMI is actively developing new product innovations and expanding its private label market presence, recognizing the growing trend of private label branding across industries. “We anticipate that part of the market will expand too, as we go forward… I believe private label products are going to continue to grow in the pool industry just like it has been in other industries as well,” Johnson says. Looking ahead, CMI is keenly focused on the vast potential of the residential pool remodel market. With over 6 million residential pools in the ground, and more being added annually, the demand for replastering and remodels is projected to escalate significantly. Estimates are, for every new pool built, three or four existing pools require replastering. This dynamic presents a substantial growth opportunity, particularly for higher-end polished 8 BUSINESS VIEW MAGAZINE VOLUME 12, ISSUE 07
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PREFERRED VENDOR/PARTNER n Bag Supply Company, LLC www.bagsupply.com – (800) 722-5790 “Bag Supply Company is high quality bag manufacturer, with a state-of-the-art multiwall paper bag manufacturing plant in Alabama. We provide bulk bags (FIBCs), small textile bags, industrial polyethylene bags and multiwall paper bags for a wide variety of commercial applications. With warehouses in Alabama & Texas, we provide fast delivery on various bags and packaging products. finishes as homeowners seek to upgrade during remodels as compared to their original finish. Recognizing the finite nature of certain raw materials, the company is also being proactive in identifying and securing alternative aggregate sources, as well as refining its processing techniques. Significant investments have been made in upgrading facilities at UAS Orlando and Texas, with a focus on expanding storage and production capabilities. The company’s long-term strategic goal includes potential expansion across the country, particularly the West Coast, contingent on market dynamics. This meticulous preparation and focus on long-term sustainability position CMI to not only meet but also capture the majority of future market share as the industry continues to evolve and grow. As Consolidated Minerals Inc. looks to the horizon, poised for an anticipated surge in demand, what unseen challenges lie ahead that could test the limits of its preparation and foresight? That remains to be discovered. However, the company’s decisions will certainly be guided by the collective investment of its employee-owners, ensuring that every strategic move is made with the benefit and sustained growth of the entire organization in mind. 10 BUSINESS VIEW MAGAZINE VOLUME 12, ISSUE 07
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