After just two years in business, Heavy North is already making waves. The Fort McMurray based civil construction company greatly exceeded its projected earnings in its second fiscal year – and the business continues to grow.
Founded by industry insiders, Heavy North was set up for success from the get go. President Steve Bolen and Vice President of Operations Raj Sawh spent decades managing projects for a leading multinational and brought their expertise – and connections – to their new start-up.
The team spent the company’s first year carefully setting the groundwork for success. “We spent 2012 just getting our systems in place,” Mr. Bolen recalls. “We bid and performed very little work that year; our revenues were minimum. We spent most of 2012 getting our safety, quality and environmental programs in place, as well as our finance, estimating, and operating systems in place.” Heavy North invested in top talent, including a CFO with experience managing hundreds of millions in revenues. “In our business plan, we always anticipated growing the company,” Mr. Bolen explains. “It cost us much more money upfront to bring these high level people onto our team, but it gave us that opportunity to grow our organization the way we did.”
Once the foundation was laid, Heavy North was ready to get to work – literally. The team took on major oil sands projects right away and “went from limited revenues in 2012 to over three times the revenues forecasted in our 2012 business plan.” As a heavy civil construction company, the firm specializes in a wide scope work, covering everything from site grading and underground utility installation to concrete foundations and road construction. With strong relationships already in place from decades in the industry, the team had little trouble winning bids. “Years of working in the oil sands, and living here in the community obviously opened up a lot of doors,” Mr. Bolen points out. “We developed a lot of relationships with the major players up here in the oil sands, and that was key to kicking off Heavy North and experiencing the level of growth we have seen in the last year.” Word got around fast, and soon the company was forming new relationships and winning more work with other clients that we have not worked with in the past. “We are not tied to one client,” Mr. Sawh adds. “We work for a number of major players here in the oil sands and elsewhere in the province.”
The team’s experience on major projects gives the company a huge advantage, particularly when bidding on relatively small jobs. “When we compete with other contractors we have an edge because we treat [smaller jobs] no differently than if we were building a billion dollar job,” Mr. Sawh explains. “The way we manage the work, the systems and procedures that we have in place, are the same used by much larger companies on bigger contracts. That is something that our competitors struggle to do – not to that level of detail.” Not surprisingly, this level of skill and professionalism can make a real difference. “We are taking that big project experience – scheduling, cost control, invoicing, and so on – and we are driving it down to the smaller sized projects,” Mr. Bolen points out. “A lot of competitors don’t have that depth.”
Heavy North has also used the team’s expertise to create a top notch safety program. “When we set up the company, one of the first things we did was get our safety program set up,” Mr. Sawh shares. “We did that before anything else, before we looked at any job at all.” Again, the team’s experience running multi-million dollar jobs paid off. “We have developed a culture [based on our] past experience,” Mr. Sawh says. “We try and manage [every job] to the highest level, so whether it is a small project for a local client or a large project for a big oil company, we treat it all the same.” This focus on safety is absolutely crucial, particularly in the oil sands. “The oil sands work is very safety oriented. You have to have systems and procedures in place to even get on these sites, and once you are on that site you have to hold up your end, manage your safety program and respect the standards of that client to ensure everyone goes home safe.”
Many of the companies operating in the oil sands are large multinationals such as Exxon and Shell, and “they have really raised the bar as it relates to safety,” Mr. Bolen explains. “You can have the best price, you can have the best people, but if your safety performance is poor you just won’t work for them. We have seen a number of competitors in the past be removed right in the middle of the project [because of safety lapses]; they were asked to pack up their bags and haul their equipment offsite because they were no longer welcome there.”
The company’s commitment to its employees – and the community as a whole – does not stop at safety. In fact, Heavy North’s support for the local community is a foundational part of the company culture. After living in Fort McMurray for 15 years and raising two kids there, Mr. Bolen is deeply invested in the region. Unlike many of the larger corporations operating in the area, “we are embedded in the community,” he points out. “This is home.” From sitting on the board of the local Chamber of Commerce and the Fort McMurray Construction Association, Mr. Bolen works hard to support his neighbours – and the entire company has followed suit. The team volunteers in various community charities and strives to hire local talent and work with local suppliers whenever possible.
This commitment to working with local talent has led to the creation of Mikisew North, a limited partnership between Heavy North and the Mikisew Cree First Nation. Mr. Bolen had hoped to formally partner with the group for some time, and the launch of Heavy North provided an ideal opportunity. “We wanted to put together a partnership that would grow our organization and at the same time give opportunities to the First Nations people in the region here through employment, training, and development,” Mr. Bolen says. “We felt it was important to give back.” Mikisew North will supply a range of services, including clearing and grubbing, site services, and other general construction services.
Heavy North is optimistic about the future, despite obvious challenges. “With the oil prices taking a significant drop, there are going to be corrections,” Mr. Bolen points out. “Things are going to tighten up – but at the same time, we are expecting even more growth in 2015. Our goal is continuous revenue growth year after year throughout the life of our company.”
It will take a considerable effort to stay ahead in a tough market, of course, but the team is well prepared to do what it takes. “We will have to work smarter to make sure that we are still able to capture those increased revenues in these tighter markets,” Mr. Bolen explains. “We have to make sure that we run lean and that we are giving the best value to our clients over and above what our competition is doing. But I believe we have already proven that we can do that.”
Indeed, Heavy North already has a roster of happy clients who are spreading the word about the new company. “We’ve opened the door,” Mr. Bolen summarizes. “People who we haven’t worked with us in the past are now picking up the phone and giving us a call and asking us if we are interested in bidding work to them. For a new company that is barely a year on the ground, we have obviously left our mark.”