"It was opportunity that lured Jostin Concrete to do business in Lexington, and it is prosperity that led them to stay. The Cincinnati-based company has opened a permanent Lexington office, and they are already seeing dividends.
"We've been down there doing work for almost eight years," said owner and founder Albert Smitherman. "We've always worked in Lexington, but now we'll just keep a presence there."
Jostin is a concrete pouring company, specializing in pouring floors for general contractors. The company poured the floors for Lexington's new courthouse complex and a stairwell at Bluegrass Airport. Among other things, the company is currently pouring floors, sidewalks, curbs and bike racks for UK's Memorial Coliseum addition.
"It's a good market for us," said Smitherman. "About 65 percent of our growth comes out of Lexington."
Jostin is working to achieve its target of $1.5 million in revenue from the Lexington market this year, and they are well on their way. The Lexington office has also been making significant inroads in Tennessee. This past January, Jostin representatives made a concerted push to generate business in the Knoxville area.
"Eight of us went down (to Knoxville), and we set up appointments. We usually spend two to four weeks on the phone, just calling general contractors and construction managers. We met with a lot of the general contractors we wanted to meet with. And then we called all the suppliers we would need to do business. We just introduced ourselves, and then all of a sudden, we found ourselves receiving bids."
Those introductions panned out. Jostin was awarded a large subcontract, pouring 800,000 square feet on a new building at the Oak Ridge National Laboratory nuclear facility. Work begun in June is nearing completion. On what the building will be used for, Smitherman could not elaborate.
"I don't know. They don't tell you what it's for," he laughed. "We were back and forth for about two and a half, three months, and we were able to strike a deal. We just dug that one out."
Smitherman said the company will beat its revenue estimates for the year, and by a good margin.
"This will be our largest year," he said. "We'll do about $7 million this year. Last year we did about $5.2 million, and a lot of that growth is from the Lexington and Knoxville market. With (the Oak Ridge) job, the Lexington market will beat their target."
The South's warmer climate, said Smitherman, is key to stabilizing Jostin's business cycle.
"In Cincinnati, we usually get snow by January or February, so it can get pretty hard in those months. It gets cold, and it snows, and you get a lot of downtime. But if we can get down into Lexington, Knoxville, and farther south, we can keep our revenue going in those months."
A 21-year veteran of the construction industry, Smitherman attended Bowling Green State University, in Bowling Green, Ohio, where he earned a degree in construction management. He worked for Baker Concrete in Monroe, Ohio, for 13 years, traveling to job sites all around the country, before founding Jostin in 1998.
"I just got tired of traveling," Smitherman said with a sigh. "My wife and I had three young boys at the time, and I made an agreement with her. I was out of town just about every day. At some point, I thought that's just not how I want to live."
And in a way, the company keeps the family close. After working at Jostin Concrete for seven years, Liza Smitherman, Albert's wife, branched out with her own pumping company last September. Brewster Pumping, LLC, also based in Cincinnati, allows Jostin to control pumping costs that previously would have been outsourced at a premium.
"It keeps us competitive in the bid process," said Smitherman. General contractors, he added, find Jostin's ability to handle pumping and pouring attractive; in essence, he said, the fewer subcontractors one has to deal with, the easier the job.
It hasn't been particularly hard to break in to the Lexington market, Smitherman reported. If anything, it has been easier for him to do business here than it has in Cincinnati.
"I always say Lexington's our best market. There are eight concrete companies in Cincinnati, but there aren't many in Lexington. And we do good work for a smaller market. Lexington's a very tight-knit community, and that's good. It's hard to break in if you're an outsider. But we really don't consider ourselves an outsider.""
Why? Jostin has a long work history with Bluegrass-area construction companies, said Smitherman. He credits Lexington's Messer Construction, in particular, with nurturing Jostin's success.
"We do a lot of work for Messer Construction," he said. "We were doing work in Cincinnati with them, and Dan France, their VP, and I developed a good working relationship."
That relationship became a business-mentoring situation. Smitherman said Messer took his company "under their wing," giving Jostin valuable insight into what it takes to make it in the construction industry.
"Messer had identified a need for more minority-owned businesses," said Smitherman, who is black. "They came to us and said, 'Let's teach you how to run a business. And we're a full partner with them.'"
Smitherman said Jostin tries not to focus attention on itself as a minority-owned business.
"We really don't put 'minority-owned business' on our cards. I mean, white businesses don't start up and put, 'owned by Caucasians,' on their card. Why would I put 'minority-owned business' on mine?" he said with a laugh. "We're a concrete company. Period."
And, Smitherman acknowledged, identifying Jostin as minority-owned can create some rather sticky situations.
"I think a lot of people in the construction industry hear 'minority-owned business' and think it's a front," he said. Many minority-owned contractors receive calls from general contractors who have been directed by clients to include a certain amount of minority subcontractor participation on projects, Smitherman said. Some contractors and project managers will call Jostin, or other minority-owned subcontractors, propose that they make out a purchase order for construction materials, and then sell those materials to the general contractor at a small markup. The general contractor can thus show, on paper or in marketing materials, that they have included minority-owned subcontracting firms on their jobs.
"A lot of businesses do that," said Smitherman. "I can tell, because we get a lot of phone calls."
Smitherman estimated Jostin receives such calls about once a week. Though he refrained from implicating any specific company, he did cite a recent phone call in which a contractor wanted Jostin to purchase and flip roofing materials at a five-percent profit. Smitherman said he takes an emphatic stand against the practice.
"We've never done anything like that. A front can scrape by on that. You know, they make $15,000 or so. But we're not a roofing company. We do concrete. Why would I want $15,000 when I can get out there on the site, actually pour the concrete, and make ten times that? If we get a contract, we do create jobs. We put people out on the site, they actually do the work, and they actually take home a paycheck."
For now, he said, Jostin will focus its effort on growing outside the Cincinnati market, and that growth begins here. Smitherman hopes the Lexington office will achieve annual revenues of $4 million to $5 million in the next few years, and there may be more horizontal integration in the works.
"We don't know yet. There are definitely some things we are looking at. Not even construction related. You know, we get down into warmer climates to keep our revenue flowing, but we'd also like to get into businesses that are not so cyclical."
For now, however, Smitherman is finding satisfaction in the work that he has. "I enjoy what I do," he said. "My wife and I make a very good team."
"