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Off to the races

OfftotheRacesEnergy boom propels Knife River Western North Dakota Division

By Don Marsh

Widely recognized for having the country’s lowest unemployment rate, 3.2 percent as of June, North Dakota fittingly harbors one of few hotspots in construction, a sector where the state has seen employment jump 17 percent in the past 12 months. Bismarck-based MDU Resources Group and construction materials subsidiary Knife River Corp. are well positioned for a home-state building boom, with a strong presence around their headquarters and three other markets, plus this year’s addition of the Knife River Western North Dakota Division in Williston.

“As the energy industry continues to expand its reach in northwestern North Dakota, construction demand and the need for ready mixed concrete and aggregate is also increasing,” said Knife River CEO Bill Schneider in announcing the division launch earlier this year. “One of the biggest critical needs in the area is to rebuild the highway infrastructure. We excel in highway reconstruction and rehabilitation, and will be ready to make safer, stronger roads that can handle the increased truck traffic.”

Until recently a hamlet of 12,500, Williston is on track for a population increase of five-fold or more as workers flock to opportunities in oil and natural gas production. The migration has proved more than sufficient to support the greenfield business of a company which, over the past two decades, has emerged as a major aggregate, asphalt, ready mixed and road-building operator on the strength of acquisitions—from Minnesota and Iowa to Washington and northern California, plus deals for Alaska and Hawaii market leaders.

Knife River Western ND began to take shape in February 2011 on a 120-acre plot outside Williston and along the Little Muddy River. A conditional-use permit made way for work to begin on the agriculture-zoned property, with sand & gravel reserves across the acreage, plus land suited to ready mixed and asphalt production, office and maintenance shop. “We figured there was tremendous opportunity for growth. Demand for materials and road-building is even more than we projected,” says Division President Brad Arntson.

Formerly Central Minnesota Division operations manager, he has overseen ramp up of aggregate, ready mixed and asphalt production as Williston experienced record precipitation—12.5 inches of rain from April–July, against 14.6 inches in an average year. Rain has hampered sand & gravel processing, presently targeted for a 150,000-ton/year output; start up of ready mixed production through a 120-yd./hour, portable dry plant that a sister Knife River division had deployed for a North Dakota wind farm; and, asphalt production with equipment shifted to Williston from a Knife River property in Idaho.

Staffing of aggregate, concrete and asphalt plants and fleets, plus one paving and three road base crews, has brought the Williston site payroll toward 50. Most employees are transplanted from other markets and housed in mobile homes or trailers Knife River Western ND set up amid the area’s strained real estate and lodging profile.

With a fleet of eight mixers mustered from sister divisions beyond North Dakota, the concrete plant commenced ready mixed deliveries in early June as weather permitted. The company has added four mixers and mostly targeted work within a 10- to 15-mile radius. Strong demand for new homes, plus attendant infrastructure and commercial building, has equated to 60- to 70-hour workweeks for concrete staff and their Knife River Western ND colleagues.

Longer term, Arntson sees more concrete, aggregate and asphalt deliveries to energy customers balancing the current load of foundation, slabs on grade and state or municipal road work. With a winter idling in sight, he adds, “We’re hoping weather will keep the building season continuing past Thanksgiving—maybe enough to clear the backlog.”

Fargo-Moorhead expansion

As the Western North Dakota Division approached a first-year peak in mid-summer, the Knife River Eastern North Dakota business opened a second ready mixed plant to pace Fargo, N.D.–Moorhead, Minn., market demand. General Manager Jeff Eberhardt says Knife River continues to grow its customer base in the region, increasing ready mixed and aggregate sales considerably in the last two years. In addition, the Fargo-Moorhead market hasn’t seen the major decrease in construction the remainder of the country has experienced.

“Within two days of opening the new plant, product demand has exceeded our expectations,” Eberhardt affirms. “With the housing market continuing to remain strong, I’m encouraged to see an increase in sales. We’ve increased our staff nearly 20 percent over last year, [and] anticipate we will have to add even more people next year. This is good for Knife River and good for the communities.”