Pipeworx Ltd.

A NUDGE INTO BUSINESS LEADS ALBERTA PIPELINE CONTRACTOR TO MASSIVE SUCCESS

Aug 21, 2012

Quality, fuel-efficient Komatsu dozers

When Kelly Gillam, President and CEO of Pipeworx Ltd., describes going into business for himself, he jokingly says that he was pushed into it by the oil company representatives for whom he was working. Twelve years later, Kelly heads one of the largest privately owned pipeline and facility companies in western Canada.

“I worked for a few select companies for a long time, and I talked about firing up on my own for quite some time,” recalled Gillam, who originally founded his own company under the name of Kellam Pipelines Inc. in July of 2000. “One day, an inspector called me up wanting me to do a small pipeline and facility project for him. I told him that I was not ready to take on a project just yet. He swiftly replied, ‘I’ve heard you say that you are going into business for yourself for two years now, it’s time to step up to the plate,’ so I took the plunge and did it.”

Even before he took the initial swing, Gillam and his wife, Tracy, who is the Office Manager for Pipeworx, prepared for the transition from employee to employer. They had saved money to purchase supplies and materials required to perform the work, as well as developed their required safety manual, quality control manual and weld procedures. In short order, Gillam was working on his first $1 million-plus project.

Today, Gillam says projects of that size are the norm for the Acheson, Alberta-based company and states that they have completed single projects in excess of $17 million within tight time frames. Pipeworx is a leader in its industry, performing work for many of the established oil companies and specialising in three-inch- to 20-inch-diameter pipelines. Peaking at 500 employees, Pipeworx typically runs 17 crews or “spreads” and attributes most of its success and return work for its customers to the high standard of quality, safe work that all of its employees strive for on every project.

Pipeworx is currently performing projects in all of the western provinces. In addition to its head office located in Acheson, Alberta, Pipeworx has offices and fabrication facilities in Aldersyde and Grande Prairie, Alberta. Pipeworx also has a shop in Hinton, Alberta, and field offices in Dawson Creek, B.C., Stoughton, Saskatchewan, and Waskada, Manitoba.

“Our niche is working in tough conditions like muskeg, rock, and mountain-like conditions, which separates us from many of our competitors, as only a few specialise in such rugged-terrain conditions,” noted Gillam. “For instance, last year we installed 105 kilometres of eight-inch pipeline in an area where the water table was only inches from the surface. During the bitter-cold winter months, we installed 25 kilometres of 18-inch pipe through the hills, with multiple water crossings. We have also been involved in the construction of some rather large tank-farm and oil-battery facilities within the past several years.”

Acquisitions bring strong partners

One of the reasons Pipeworx can handle such large projects today is because of the acquisitions it has made. In 2007, Gillam merged his very successful company, Kellam Pipelines, with another successful venture, Horseman Energy Services, essentially doubling the company in size. The two companies rebranded as Pipeworx. One year later, the Pipeworx Group acquired another very reputable facility-based company, Wolf Projects. Pipeworx continued to grow both through acquisitions and by expanding services from within. The acquisitions brought new partners into the business, including Kevin Kutschinski, Garth Grubisich and Jason Ortt, who heads up Pipeworx’s facility operations. “They are not just my partners, they have become my close friends,” Gillam stated.

“Pipeworx is an amalgamation of three companies,” he pointed out. “Each brought additional expertise, including very key people, such as our three General Managers, Chad Johannsen, Shane Cyrenne, and Darren Ward, who collectively have made our business unit much stronger. Our annual revenues have increased substantially during the last few years due to our reputation and quality of people. While other companies were downsizing due to the economic conditions in our industry, we were growing.”

Sold on Komatsu

With growth came the need for additional equipment, much of which is Komatsu excavators and dozers, purchased through SMS Equipment with the help of Territory Manager Kelvin Godin. Gillam began buying Komatsu machinery about five years ago with an initial purchase of three excavators.

“Three major factors came into play in buying Komatsu equipment,” Gillam said. “The warranty was better than on the competitor’s machines we were previously running; the overall purchase price was right and the dealer service was outstanding,” he recalled, noting that the latter factor played the biggest role at the time. “What we have found is that Komatsu machines also give us outstanding production, even in the toughest ground conditions in which we specialize, so it all adds up to being extremely cost-effective equipment. The acquisitions brought several brands of competitive machines together in Pipeworx’s fleet, and we are currently weeding those out. Our plan is to be exclusively Komatsu.”

With about 100 pieces of heavy equipment in Pipeworx’s fleet, keeping track of them can be quite challenging. To assist in handling this task, Gillam turns to the KOMTRAX remote machine-monitoring system. “I can pull up a machine on our secure Web site at any given minute and see where it’s at, how many hours are on it, idling time compared to operating time, and the work mode in which it is operating. It also makes scheduling maintenance, which I am very aggressive about, much easier. It’s a great fleet-management tool. I am so impressed with the KOMTRAX system that I am currently having the same tracking tools installed on my sidebooms.”

Pipeworx handles service work on its equipment, with help as needed from SMS Equipment. “Kelvin has been terrific about sourcing us the right equipment, whether we need to purchase or rent a machine. Our Product Support Representative Trent Daviduck offers us great service as well. SMS really stands behind the equipment and takes pride in its products, and that is the largest reason we continue to contact SMS for Komatsu machinery.”

Still growing

“Pipeworx is not done growing yet,” Gillam stated. “We recently started our own trucking division, which has taken right off. We are specializing in pipe and heavy-haul capabilities and already have eight of our own Kenworth units, along with 20 hi-boy trailers and a wide variety of low-boys, jeeps, and boosters to service all our own needs, as well as a rapidly growing outside customer base. In addition, we are currently looking into expanding our business to incorporate directional drilling services to assist in filling our own requirements for this scope of work.”

“Our growth will be organic, meaning it will come from adding services ourselves, rather than simply acquiring a business,” explained Gillam. “The other way we intend to grow further is geographically. We have had requests from select customers offering us opportunities in the United States, so that is an avenue we are evaluating now. Along the way, we have developed strong relationships with many of our clients, and because of those relationships, we perform a large amount of prenegotiated work on top of all our bid projects. If our customers are asking us to expand into new geographic areas, and it makes sense, we will accommodate those requests to further expand on those already ‘premier’ relationships. After all, that’s how I got started on my own in the first place.”