Conference. My name is Julio Romero, and I cover building products, industrials, and engineering and construction at Seaport Global Holdings. We're really pleased to be able to host Gibraltar Industries. Their ticker is ROCK. With us today is Bill Bosway, Chief Executive Officer. The format of this is going to be a presentation followed by Q&A from myself as well as the audience. If you have any questions for Gibraltar, feel free to type them into the Q&A section at the bottom of your screen, and I'm happy to ask at the end if time allows. With that, Bill, very much appreciate you being here, and the floor is yours.
Thanks, Julio. Hey, welcome, everybody. Let me just start. I'll give you a quick overview. Some of you may know us, some of you may not. If you don't, this may be helpful. We have four reporting segments that we talk a lot about: residential, which is our largest segment, probably 60% of the business; renewable energy; ag tech; and infrastructure. I'll give just a little overview of each. In the residential segment, it's probably something that we've been in longer than anything else within our portfolio. There are really three pieces of the business. Two of those three make up 95% of the business. One is our building products group. The other is mail and package. We do some home improvement as well. In our building products group, think about everything that goes on around the roof, not shingles, but trims, flashings, and ventilation.
That is 85% repair. The rest is really new construction. What drives the business is housing stock wears out. You have storm damage, and then obviously new construction. In mail and package, we are the largest provider of single-point mail as well as centralized mail solutions. We've been at it quite a long time. That's a really good marketplace. It's got an actual moat built around it because USPS manages basically everything associated with it. There are some really interesting trends going on in that space, particularly with new home construction as it relates to neighborhoods, as USPS is mandating centralized mail, which we're very strong in. We are excited to see that happen. Our renewable energy business is really solar. We've been in it since 2015 when we acquired into the space.
Those that follow the industry, it's been an interesting ride the last three years with everything going on inside it. Effectively, if you think about the solar marketplace, there's really two large buckets when we think about the end markets. To clarify, we're not in residential solar, nor have we ever been. The other two buckets I refer to as utility scale, and then we would call C&I, commercial and industrial. We're really in the commercial-industrial space. We do very little, if any, in the utility scale space. What we call distributed generation or the C&I space is somewhere around a $2 billion market. That's really made up of racking. It's made up of EBOS and then field installation, all of which we do. That market is really in a size range of, say, between 5 and 10 megawatts.
That's our average size is 7 to 8 megawatt versus utility is probably really more between 100 and 500 megawatt. Competitively, we don't really overlap with the folks that support utility versus C&I. The business model is obviously a little bit different when you've got to design, manufacture, and install in the field a smaller-sized project. We've done about 24 gigawatts worth of business since we've gotten into the business. It's about 5,800 different fields over the last 10 years. We do probably 250 fields a year, plus it can scope up and down. We have 200 different customers in the space. Most of them are developers and/or smaller EPCs. Really, we've got strong leading positions, particularly in the Northeast or East Coast and now evolving in the Midwest.
The strategy behind the business has been to have a portfolio of products that make sense for a piece of land. We are the only real company that has any significance in tracking now, tracking technology, whether it is 1P or 2P, fixed-tilt technology, canopy technology, and EBOS all under one roof. The reason that is important for us is when you get a piece of land that someone wants to develop on, you really have to dig in and understand what type of technology makes the most sense for the return for that investment that that developer is going to make. That could be a tracker, could be fixed-tilt, could be a combination of both. We do not really sell what we make. We sell a return on the piece of land, and that is why we built a portfolio. Switching gears, we also have a business called Ag Tech.
Ag Tech actually came with our solar business when we acquired it back in 2015. It was actually one company. It had solar, and it had a greenhouse business combined. The greenhouse business had been around really for 80 years. At the time, we were not sure exactly what we were going to do with it. Subsequently to that, we have really made a strong effort to build this into something we think is going to be pretty interesting going forward. There are a couple of things about this business that you need to know. One, very similar to renewables, there is a business process associated with structural engineering, the ability to design something for a piece of land, the ability to manufacture, and the ability to install and construct.
We do the same thing with an Ag Tech facility as we would a solar field, except an Ag Tech facility is obviously more complex. There are three businesses within this space, if you will, or three end markets, I should say, we serve. One is the produce space. Think of produce as really food. It is fruits and vegetables. There is our traditional commercial classic space, which has commercial growers for plants and flowers that you would buy at your big box retailer or through a nursery. We do a lot of institutional work, which is either botanical gardens or we work with over 100 different Ag Tech universities in the U.S. building research facilities for the future of Ag Tech and growing environments.
The third end market is really a structures focus where we're taking all our knowledge on building structures in general from structural engineering all the way through installation and construction into other end markets. Whether it's car washes or canopies for c-stores or quick service restaurant drive-throughs, travel centers, etc., all of that is very much the same, and we leverage that accordingly. We've been adding more end market exposure opportunities for us in that space. It's an interesting business. Two things to kind of keep in mind. One, there's more people than there is food, and that's kind of a driver of the produce business, as well as all the Ag Tech research facility and work that we do with universities. That's not going to go away by any stretch of the imagination.
Also, secondly, recognize that about 1% of overall farming is indoor or in these controlled environment facilities. We do not need the market, the end market, or we do not need people to eat more. We just need more farming to kind of move indoor. It does not have to be a large percentage. You can take a pretty good size market, increase it 1%, and it becomes that much, doubles in size. We think there is a trend there that matters. It is a well-established space. It has been around for 40 years. This is not vertical farming. This is actual controlled environment indoor agriculture, which has been around for quite a long time. We are excited about the space. A lot more to do there. This is $1.5 billion-$2 billion annualized market.
We think it's going to grow high single digits going forward just based on the investments we know are coming across the customer base, both in the U.S. and Canada and the established business that is existing today. There's probably 750 truckloads of fruits and vegetables going into the U.S. from Canada every day to all your large retailers that I'm sure most of you or many of you shop with. Very similar to renewables, we do a lot of the same stuff. You give us a piece of land based on what you want to grow, then we will design everything from the structure that's required and all the subsystems that go in, and then we'll integrate them, and then we're going to construct the entire thing for you and hand you the keys. It's a full-service type of thing. We do new builds.
We've been doing much more retrofit as well recently. We also do, we're starting to generate some service revenue from operating some of these facilities, which is also relatively new. That's the business model. We're excited about it going forward. Lastly, I'll just touch on quickly is our infrastructure business. That's a business that was once captured underneath our industrial business and reported that way, but it really was never part of it. This business has done a lot of good things in the last three or four years. It's been growing. It's very good margins. Effectively, we are focused on bridges, somewhat of a niche for us, and it's bearings and things of that nature, structural things that matter.
We've probably had some benefit from the infrastructure bill, but I would suggest that it's been more of just our ability to operate a little bit better than we were before on a number of fronts. It's some new products that we brought to the table, which I think have been helpful. We've got some other technology coming as well. It is an exciting business for us. It's contributing a lot to the value of Gibraltar. It's one of those things we think will continue to be funded. If you recall, infrastructure effectively benefits from having bills like the infrastructure bill. The way the bills actually work is they earmark money, but you still have to go fight for what you need every year just as if the bill did not exist. It comes from both state and federal funds.
It is how well you're positioned with the right contractors in the right states that are actually making investments is what drives the business ultimately at the end of the day. That is it on the respective four businesses. I'd say from a balance sheet perspective, very strong. We really do not have any debt. That is not ideal per se. How we deploy capital going forward and what we're looking to do mostly of is obviously M&A. I would say most of that is going to be focused in residential or building products in general, as well as some of the Ag Tech space. We just recently finished or completed an acquisition called Lane Supply in Ag Tech. You will see more CapEx or capital deployed in those two end markets going forward. Why not the others?
In the world of solar right now and renewables in general, I think everybody's in a holding pattern trying to figure out what the new administration may or may not do with the current IRA. I think once those things settle in and we get some clarity, then you'll see more activity from an M&A front as an industry versus the last two years, which has not been a whole lot. In infrastructure, I would say that's probably not an area that we're going to invest too heavy in in terms of building out the platform at this stage. Again, most of our capital deployment is going to go towards sustaining the business and acquiring into those two end markets. We're finishing up a buyback program that we approved a couple of years ago, $200 million. I suspect we'll continue to buy back shares going forward.
We generate a lot of cash, and it's a good problem to have, but it's about deploying it going forward and building the businesses accordingly. With that, I will stop and see if there are any questions anyone might have on the businesses or anything else.
Great rundown, Bill. Very much appreciate it. Just a reminder for folks on the line, if you have any questions for Gibraltar, feel free to type them in the Q&A section at the bottom of your screen. Happy to ask on your behalf. Maybe I'll kick it off here with what you mentioned at the end, which was that Lane Supply acquisition. It's pretty notable, in my view, it's the largest deal you guys have done, I think, since TerraSmart in late 2020. It goes into Ag Tech segment.
If you could maybe expand on the quicker turn nature of the structural canopies business and how Lane Supply complements the legacy Ag Tech segment.
Yeah, it's a good question. Guys, when you look at those three end markets I talked about, the produce in particular, these are much larger projects. If you got to stack them over a period of time with a broader customer base to give you this clearer cadence going forward on revenue and profitability, right? Because if one of those projects were to move out a quarter or two, it can be impactful quarter to quarter, but it washes out over the course of a year or so. The Lane business is a little bit different in that regard.
It's the same type of business, except for if you think about some of the large customers that Lane's been with for quite a while, they'll get a plan for, say, 40 stores over the next 45 weeks. The average project length of time is going to be anywhere from seven, maybe to 10 days, maybe two weeks. Year one, you're going to get a backlog that's kind of laid out in the near term with a cadence that is not dependent on one large project. It gives you, I think, a better foundation going forward to build off of for more predictability, etc.
I think outside of the end market being where we want to be, that's a nice addition to the business to where we can complement the large projects as well as the cadence that we get out of a Lane-type business across the end markets that it serves. We are excited about that. It really does leverage what we have been doing for 80 years. If you think about structural engineering, stamp drawings, manufacturing, construction, installation, that is exactly what Lane does. They are going to bring some things to the table that will help us and vice versa. There is some nice synergy there, but there is some technology in what they do, which is kind of interesting. People will say, "Well, it is a canopy. I mean, how hard is that?" What you may not think about is the technology that goes into just water management alone.
You are running power through those canopies as you see them lit up. There is a lot that goes into how to actually design based on what the customer is looking for, the look and feel, and how you actually accomplish both those things effectively. Another way to think about it in the quick-serve world is we partner with Chick-fil-A. That is kind of interesting. What we really partner with is how you move people through their store or outside their store in a much more efficient way than they have in the past. The trend is people do not even want to go inside the fast food anymore. You probably have all seen where those drive-throughs are becoming two-lane, three-lane. They may be up to six-lane. When we sit down and design with them, it is all about flow of traffic.
It's all about how do you protect more employees that are outside than inside the four walls. A lot of interesting things happening there that we get involved in early on that I think matter relative to the solution sets that come in moving traffic through things. That's why that canopy business for us is kind of interesting. There's a marketplace that's growing. There's investments going into these types of end markets. The good news is there's plenty of room to run, whether organic or inorganic in that space as well. We're excited about Lane. It's accretive day one, and they've got a very strong backlog as well. More to come as we get into that. They've now been part of Gibraltar about a month. We're excited about what we've seen.
You said something interesting there, which was water running through these canopies. There's efficiency aspects with Chick-fil-A too. Kind of like thinking about smart canopies of the future, so to speak. Can you talk to potential cross-selling opportunities over the longer term, not near term, but from maybe adding some of the solar tracking products from your renewable segment to those Lane Supply canopies?
Yeah, there's a couple of different angles here. There's one. Almost every c-store has a car wash or a lot to do, and we build structures there. That's kind of an interesting connection where you're on site doing that. You think about the broader site picture, that's one thing. Secondly, we're doing a lot of EV charging stations right now for a lot of these travel centers. There's a solar component there.
Thirdly, there's the idea of you got customers that are thinking about how do you integrate solar into canopy. We do that and have been doing that for years in our core solar business. Our solar team and our renewables team and our Lane group have already connected on that front. There's some interesting opportunities, I think, collectively. Because it's not just about the technology and how you bring it together. It's how do you do it really cost-effectively from soup to nuts so that the return ultimately comes together. I'll give you an example where we just finished up the last phase at Cincinnati Zoo, which is, I think, the second largest zoo in the U.S.
We have effectively turned all its parking into a canopy solar structure to where now that zoo, 90% of its power comes from the canopies to run the zoo. You can apply that to a lot of different things, whether it's a c-store or otherwise, but how do you actually do that cost-effectively? Yeah, you have more and more people thinking about that. There are a lot of interesting dynamics around having different customer bases that you can pull together, but having some technology and some ideas of how to combine some things that maybe no one else is doing today. More to come on that as well. Everyone's kind of chomping at the bit to get started. I'm trying to tell her, "Hey, guys, settle down. Let's run the business.
Let's get Lane on board, and then we'll take off from there. Yeah, more to come on that front. Absolutely. Definitely looking forward to it. Maybe just to touch on the legacy Ag Tech side, you talked about the three end markets that are the broad categories historically, but if you can just give us some color as to the range of kind of sales outcomes over the next 12 to 18 months. Yeah, listen, I think Ag Tech in general, even without Lane, is going to be a pretty big contributor to Gibraltar's success over the next couple of years and beyond. Part of that is we've done a pretty good job in the last two years of expanding our customer base, particularly in our produce world, where there's been significant investment continuing to flow into that.
You have pretty large companies that are now jumping in, Cox Communications, which I think probably most people know. I know they're private, but they're a $60 billion company, and they have gone full tilt into this space and now are the largest controlled environment agriculture company in North America. They've done all that in the last two years, maybe three years, sorry. It is an investment of just in that short period of time, maybe close to $3 billion. I think that, one, you've got this in-demand product where people want more of it, and you see that every day. You've got investment coming in in a big way, and you've got an installed base of growers that have been around for four generations that really invested in doing this and I think are going to make more and more investment.
I do think that produce piece is going to be a big contributor. When we get through Q1, you'll see the type of activity that's going on. I mentioned in our earnings call, we just signed up another $40 million or so of new contracts. That wasn't all produce. We had some pretty big projects with universities that we're doing for research facilities, for Ag Tech. Since that time, there's been even more activity. It is just a matter of just keep the churn going and stay connected with your customers, broaden your customer base. We got to do more than just new builds. A big chunk, I'd say relatively big chunk of some of our new business is going in major retrofits.
We're working on a project now that's an existing facility that we're going to retrofit over multiple phases over the next couple of years. The greenhouse itself is five miles long, and it's a mile deep. To give you an idea of the magnitude of that type of opportunity to win that project, but to then do that from a retrofit perspective, it gives you a lot of other things that maybe a new build wouldn't. One, you learn a lot, but secondly, it broadens the customer base. Your name gets out there pretty quickly that you can go help people transition from one crop to another. That's not as easy as people think. All the subsystems can change and so on and so forth.
I think it's new builds, it's retrofits, and now we're getting customers asking us to come actually perform day-to-day maintenance or be their operating maintenance kind of group. That's early, but that's an interesting development as well. That just comes from the guys that run our business. We were once these growers in these controlled environment facilities. They understand what our customers are going through and what they need to consider or how they should consider. They are experienced indoor farming people. That makes a difference when you're thinking about retrofitting or new build or actually maintaining something. That's new to us in the sense we built that team up the last couple of years, and it's really been impactful. There's more folks like that out there, I think, that will join the team going forward.
That is meaningful when you think about trying to drive the business. I am excited about that. I think in our core business that has been around for a long time, that is more steady eddy type of stuff, but there is still a lot of investment going on at the university level that matters. There is a lot of expansion that comes in. It more ebbs and flows a little bit on the expansion for commercial growers that are doing plants and flowers. That is a good steady business for us that we like, that is profitable. We have been in it for 80 years. I just mentioned the structures business. It is not just the Lane acquisition, but we have been in structures for some time. We have been doing car washes and kind of unique applications, and we are seeing that also pay some dividends.
We have simplified the business, believe it or not, even though we have three segments, we used to have six. How we are focusing the team, the type of talent we need to run or to be involved in each of those segments has been a lot of work. By no means do I want to paint a perfect picture. We will never do that. The opportunity to drive margins north of 15%, to drive growth at a much higher rate, are going to be here sooner than we think with Ag Tech. We are pretty excited about that.
Really helpful. On the renewable segment, you talked about solar as kind of in a holding pattern of sorts. Can you just talk about what kind of needs to change to get more community solar projects in the future?
Yeah.
If you step back and say, "Well, what's going on now?" The biggest thing that people are thinking about right now is what is the new administration going to do with the IRA? When we built our plan this year, the one thing that we wanted to do is put some bookends around what could happen with the IRA, what would that mean to the business? We came out and said, "Look, the business is going to be flat or down." I'll explain that in a bit if people are interested. We don't think it's going to be a nuclear option, and we don't think it's necessarily going to be status quo, but it also may not be any impact in 2025. If any change comes to the IRA, it's going to be through some reconciliation bill. We get updates every day. It's being worked on.
If it's being worked on or not, what's going to fall under the purview of that? I think people also need to keep things in perspective. There's a number of red states that are very supportive of solar. People may not realize the largest state that the most solar that we have in any given state is the state of Texas. It's important, and you've got a lot of people supporting it on both sides of the aisle. I think I break it down into real simple ways. I'm not suggesting I know anything what's going on in D.C. Maybe I'm not smart enough to be there or don't know how to play that game. Regardless, think about 45X as a benefit today. It's really a tariff.
It's a tariff in a positive way for those that are in the industry because you get the benefit if you're local with what you're making with Tracker. You get a tax benefit for that, right? Think about the ITC benefit, same thing. What they may want to do to that is tie it more to domestic manufacturing. If they do so, it's effectively a tariff, which fits within kind of the framework of where the administration's thinking right now. Those are the two big ones that I think matter. The PTC matters as well for a lot of our customers. If those kind of get worked out, then I think things will be fine. That all being said, if there's some changes to it, I think we'll still be fine. The reason for that is think about two things.
Before the IRA, all we had was an ITC. It went away every three years, and it reduced every three years before it had to get renewed again, right? You are living in that world, but that is all you had, and we were growing at 15%-20%. That is great. If we got stripped back to something like that, maybe it would be okay. The only difference is the panel cost is higher today because of the DOC investigations. Ultimately, I think those are the three things that matter most. Once we get some clarification on that, great. If those things get phased down sooner than the 10-year cycle, that is probably okay as well. People just want to know what the rules are, then they can go. Here is the thing you always got to remember.
We were sitting with a customer just a couple of weeks ago, and he said, "We're like, well, what do you think about the IRA and what's going to happen?" He goes, "Yeah, I don't really care as much as you might think." He goes, "I care, but I can't worry about it." We're like, "Well, why not?" The project that we're signing today, I've been working on for four years. I've got $5 million invested in a project I started four years ago when I bought the land. I've been tied up in doing permitting and all this other stuff. The average length of project for a C&I type project is six years. For utility, it's even greater. These guys aren't going to pack up their tents and go away just because.
They would have done that over the last three years based on everything that was thrown in their face. I think people will navigate through whatever comes. That is one thing. Secondly, there are a lot of incentives at the state level that people may not remember or realize. As you track where those are in each of those states and what they are doing, that is kind of a roadmap too, from a C&I perspective, that you would follow and go forward with. I would say our view is we are going to continue to work the Northeast and the East Coast where we have always been strong. We have been moving more in the Midwest, but we are doing it state by state based on the local incentives those states have put in place and the mandates that they have.
Those probably do not change as it relates to the IRA, but there are still attractive benefits there that were not there five years ago, right? You might have higher cost of panels, but you have incentives in place at the state level that were not there five years ago. The IRA gets moved or changed and so be it. When you throw it up on the wall and you go, "All right, let's wash it out and see what it looks like," is it really going to be a bad picture? I do not think so. The last thing I would say in the whole front, just as people think about tariffs right now, and I know there is a lot of noise around that, and I understand it. Here is the deal. Two and a half years ago, hot rolled coil steel was $2,100 a ton. It is $900 today.
That has gone up from $700 in the last month because of the pending tariffs that are coming. We are not going to see $2,100 a ton. On top of that, the supply chain issues associated with the high cost two and a half years ago were extraordinary. They do not exist today. There is an inherent global demand situation now that probably does not support, even with tariffs, stuff running through like we saw two and a half years ago. Guess what? We got through two and a half years ago. There is a playbook out there that says, "Here is what you need to do for each of your respective businesses.
Dust it off, button it up, and apply the new inputs, and then work it from there. That is effectively what we did in January, kind of how we thought about the levers we were going to need to pull and when. As things evolve, we will evolve with it. Boy, it is uncertain , believe it or not, and I cannot believe I am saying it out loud, as much as it is causing people anxiety, I was thinking about the $50 a week increase for 50 straight weeks that we were seeing with steel and aluminum two and a half years ago, and we got through that. I am not saying I like the situation right now. I do think it is causing some pause, and everyone reads about that every day. It is not as extraordinary as what we saw two and a half years ago. We will be ready.
We'll work through it. I'm sure it'll be bumpy along the way for everybody in some regards, but we've been there, done that. Let's focus in. If it's 25%, that probably floats through to your product cost, something less. There are levers to pull once you understand that, and you go work it in the industry or you work it with your customers. It's not rocket science. The question is going to be, if anything, does it do anything to end demand? I think ultimately, no, not as much as people might think. I think there are other forces that will impact demand that we're already dealing with and have been dealing with more so than this. I do think it's causing people right now to wait and see because they don't know.
They just need to know what is it going to be, what's going to happen on April 2nd, and if anything's going to happen after that. We'll work through it, but that's how we're attacking today's environment. You know what you got to do, put your plans in place, be ready to roll. Can't control what you can't control, so focus on what you can. We're kind of back to two and a half years ago or when we went into COVID for, honestly, it was a very similar feeling with what's going to happen, right? We'll work through it, but we're fairly confident in our ability to manage it.
Excellent. Bill, thanks so much. Lori, everyone at Gibraltar and the LHA team as well. Really appreciate y'all taking the time.
Yeah, anytime. Appreciate everyone joining us as well. Reach out if you want to talk anymore.
Take care. Thanks.