🔦 Welcome to this week’s edition of Sector Spotlight!

Every Tuesday we highlight an under-the-radar and often underappreciated industry. This week we take a closer look at the Sandblasting Services sector.

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-Harry & Carter

🔎 We identified 328 Sandblasting Service companies* as strong, potential targets. Click here to access this list.
 
*These companies have verified contact, location, and financial data. We limit the number of downloads for each company list (so we don’t overwhelm the sellers).
Revenue between $1.5M - $20M

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Sandblasting Services

🏢 Size of Industry: $12.15B
📈 Industry Projected Growth: 2.0% (CAGR)
💰 Average Profit Margin: 5.8%

🔑 Key Highlights

• Steady Revenue Streams: Sandblasters cater to a variety of sectors, including residential and nonresidential construction, automobile, marine, aircraft, and general metalwork.

• Certification and Industry Associations: The requirement for certification to secure high-revenue contracts ensures quality workmanship and adherence to standards. Moreover, industry associations like the Association for Materials Protection and Performance (AMPP) provide support, enhancing the credibility and professionalism of sandblasting businesses.

• Essential Service to Construction Markets: Sandblasting services play a crucial role in both residential and nonresidential construction, making them indispensable to downstream construction markets. This reduces the risk of substitution and ensures consistent demand.

• Low Capital Requirements: Sandblasting businesses have low capital intensity, mitigating the need for substantial upfront investment. Leasing equipment, rather than buying outright, offers a cost-effective option for managing the largest expense.

• Localized and Market-Specific: While highly localized, sandblasting businesses serve specific markets, resulting in a low level of market share concentration. This allows for targeted marketing efforts and reduces competition from larger players.

📋 Industry breakdown

Iron and Steel
Sandblasting services for iron and steel are pivotal to the industry, given their extensive use in both residential and nonresidential construction projects. Demand for these services has surged in line with broader construction trends over the past five years. However, the rise in interest rates is expected to dampen residential construction demand, while the easing of COVID restrictions will bolster nonresidential projects, effectively balancing the overall demand.

Aluminum
Aluminum sandblasting is indispensable in crafting cars, airplanes, boats, and various other vehicles. With aluminum finding applications in diverse sectors such as food packaging, electric cables, and home utensils, demand for its sandblasting services has remained steady, making it one of the industry's least volatile segments.

Copper
Copper's versatility, especially as an efficient conductor of heat and electricity, has led to its extensive use in electrical equipment, plumbing, roofing, and manufacturing machinery. Rising vehicle registrations, construction projects, and manufacturing activity have propelled the demand for copper sandblasting, a trend expected to continue amid economic recovery.

Zinc
Zinc blasting, much like other segments, is primarily employed in manufacturing and maintaining motor vehicles. The relaxation of COVID-19 restrictions, coupled with increased travel, has driven demand for zinc sandblasting, particularly for car bodies, with sustained growth anticipated as vehicle manufacturing rises.

 📱 Relevant listen

Thanks for reading and don’t hesitate to reach out! - Harry & Carter

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