Sep 26, 2012

Efficient Komatsu equipment provides higher productivity

EBC has long been recognized as a leader in each of its fields of specialty from construction and civil engineering to excavation. Fernand Houle, a 1961 civil engineering graduate of Sherbrooke University, originally founded the company in 1968 as Entreprises Bon Conseil Ltée.

The company’s first publicly awarded contract was for the expansion of the Quebec Academy in Sainte-Foy in 1968. It completed the job below the $1 million budget, which boosted confidence among Mr. Houle’s backers as he was just starting out in the commercial arena.

Riding on its success in construction, EBC expanded into form work and concrete. In 1969, the company obtained its first civil-engineering project, working on the highway exchanges for the Quebec City and Pierre-Laporte bridges. During this time period, EBC also began diversification into all fields related to civil engineering, such as excavation; specialized underwater processes; energy transport via GLR Inc., an affiliate company; and in real estate, through Promotion Immobilière Primum, also an affiliate.

This diversification in construction services allowed EBC to work on $6 billion-plus of contracts on more than 550 projects across Canada, particularly in Quebec, Ontario, New Brunswick, British Columbia and Labrador.

The EBC name was associated with a majority of the large-scale construction projects in Quebec in the ’80s, ’90s and 2000s. They included Metro stations in Montreal and Laval; hydroelectric work in James Bay, SM-3 (Sainte Marguerite), Tulnustuk and Péribonka; wind turbines; excavation and earthmoving; roads; tunnels; waterworks and sewers.

According to Martin Houle, the company’s Vice President of Finance and Administration, 2011 was a year of transition, as he recalled several challenges the company had to overcome this past year.

“The first was to take on new markets, such as the mining industry. The second was to ensure the availability of equipment and personnel required to work in these markets. The third was to maintain our personnel’s technological know-how and their ability to master the technology built into the new equipment.”

Moving toward new markets

From the start of 2000, construction activity has been particularly intense for the industry as a whole, but 2011 proved to be a very important year for EBC’s growth. “We experienced a significant increase in work volume and we sought to develop new markets,” noted Mr. Houle. “We focused on mining in particular because this sector is constantly expanding in Quebec, but we had not had a large presence there. The increase in work load, significantly increased the size of our equipment fleet, as it nearly doubled this year.”

EBC is currently working on projects in Fermont with Cliffs Natural Resources and in Nunavut with Canadian Royalties. At this time, its role is primarily providing mining companies with support services, such as site preparation, clearing mining residue, building levees and embankments, etc.

“What sets EBC apart is that our services are complete and comprehensive,” observed Mr. Houle. “We can offer the entire array of construction services from building completion to site operation, including drilling, dynamiting and tunneling. EBC can do it all, and few companies can claim that.”

A changing environment

“There will always be room for small and medium-size businesses in construction, but we can’t ignore the current trend toward big projects that require vast financial resources,” continued Mr. Houle. “Whether it’s a project like the Turcot exchange or the super hospitals, the reality in Quebec is that public-private partnerships are now the norm and are composed of large, foreign, financial groups with deeper pockets than most Quebec-based companies. If the future is in super-size projects, we have to acknowledge that it’s a serious issue for Quebec contractors like us.

“The companies that own these megaprojects are financing them, and that is something we were not familiar with in Quebec. We will have to master this process because it seems to be the way the markets are going. These are turnkey projects that include planning, design, financing and execution. It’s a shift we must learn to manage. If we want to participate in these big deals, we have to envision partnerships,” he added. “Even large financial groups will need Quebec contractors and labourers to complete the work.”

In addition to projects involving public-private partnerships, the evolving marketplace is also affected by changes in civil engineering and excavation. “Until recently these sectors were the domain of government entities, such as Hydro-Québec and Transports Québec, building dams and roads,” observed Mr. Houle. “But with Plan Nord and the increased presence of mining companies, along with wind-turbine energy production supported by private enterprise, our customer base is becoming more diversified and privatized.”

To meet their immediate needs while working with a fluctuating market value for raw materials, customers must often launch projects quickly. Contrary to Hydro-Québec or the MTQ, whose plans are complete prior to the start of a project, private-sector customers will give the go-ahead before plans are complete. Contracting firms and their customers must work together as a team to develop the project, which is often an adjustment for the contractor as it must adapt to customers’ demands in this new way of operating. That requires flexibility and an ability to adapt to the changes that inevitably arise during a project.

Equipment challenges

With multiple projects coming together simultaneously, the supply of heavy equipment, both in terms of size and quantity, becomes critical. Contractors and equipment distributors alike have to forecast their needs and inventory based on anticipated demand.

Developing new markets, especially in the mining sector, has created some serious challenges for EBC. Purchasing and Logistics Manager Martin Dubé points out the difference between contractors’ circumstances and the big mining companies’ situations. “The latter plan their investments over the long term and can order equipment several months in advance, so they are less worried about delivery delays. The same can’t be said for contractors, who have little time to order their machinery. Sometimes they have less than a month between being awarded a contract and having to start work on it.

“We are using equipment that we already had in our fleet, such as Komatsu 50-tonne (45-metric-tonne) trucks or PC750 and PC800 excavators, on current projects,” said Mr. Dubé. “However, as we expand our field of operations, we will need bigger and higher-performing equipment. In 2011, we added a Komatsu PC1250 excavator to our fleet, and the next machines we plan to purchase will be a PC2000 and several HD785 haul trucks. Now we just need the contracts to warrant the investment.”

“This is the type of situation we come up against continually in construction,” reported Mr. Houle. “We’ve dealt with it on other projects, such as the Romaine River Dam, wind-turbine farms or the Ultramar pipeline, where we and our partners were able to manage a quick turnaround to get the equipment needed to complete the work. We were able to do that, thanks to SMS and our Sales Representative Michel Charest. It was a big challenge for us and SMS because we required quite a few pieces of equipment, many of which are hard to find in Quebec. Plus, the deadline was very tight. For EBC it’s critical to be supported by an equipment supplier that can meet our needs quickly, and SMS definitely fits the bill.”

The need for skilled labour

Faced with more complex tasks, contractors must invest in training employees in new skills. “We live in an increasingly technological environment,” Mr. Houle pointed out. “This holds true for our machine operators as well, who must have the proper training to operate the highly sophisticated machinery used on our jobsites. We definitely need properly trained personnel and training centres that provide them with the newest techniques.

“However, the main issue is the general lack of available labour throughout Quebec,” he continued. “We also have to take into account the difficulty of hiring in remote regions, especially because of the quality of life young workers are seeking. Most couples are two-income earners, making them more independent and reluctant to leave the city.

“Mining companies that want a quick return on their investment also compete for workers,” Mr. Houle explained. “They raise the pay scale to attract the labour needed for their projects. That puts huge pressure on contractors’ employee salaries. For example, health and safety inspectors are in high demand in the city and are very difficult to attract to remote regions. These are very important positions nowadays as the No. 1 priority on jobsites is safety, and inspectors must be involved from the planning stage on. Starting in 1989, EBC put a program in place that goes beyond prevention; it is a safety management program we use on all our sites. Our objective is to have zero lost-time accidents. We believe safety and prevention go hand-in-hand.”

Employee training is important

According to Mechanical Service Manager Sylvain Lortie, another challenge is making sure employee training keeps up with the latest technology. That’s where SMS’ support is vital to machine operator training. “In the last 10 years, technological innovation has revolutionized construction machinery,” he acknowledged. “From the introduction of Tier 4 engines in all new equipment to the KOMTRAX remote equipmentmonitoring system, SMS has been essential in keeping us up-to-date.

“These technologies require information and training for our operators,” noted Mr. Lortie. “The improvements are necessary, but it takes a while for us to be entirely comfortable with them. Developing new markets brings the need for a large quantity of new machines with new technology. My role is to maintain all of this equipment and to find qualified technicians to do that or train them ourselves.

“EBC’s objective is to start and complete a project as quickly as possible,” he continued. “An issue for me is that the period between the beginning and end of a contract is often too short to completely master a new technology. We’re always playing catch-up with technology that evolves faster than we do, which makes it difficult to recruit qualified personnel quickly. More than ever, we need the support of our equipment distributor, where previously we were much more autonomous, working on machines we knew well.”

To manage maintenance and repairs on a continuously expanding fleet of equipment, EBC has implemented specific maintenance systems, first in Quebec City on a trial basis, and then on other jobsites. Given that the fleet includes more than 750 motorized units and grows to almost 4,000, when counting all of the accompanying equipment in inventory, an efficient inventory control is absolutely necessary.

Nearly half of the excavation equipment fleet, such as excavators, wheel loaders, trucks, and dozers, is Komatsu. SMS keeps a service truck on site at all times to help manage the rapidly changing equipment technology. Mr. Lortie points out that he purchased three similar excavators at three different times during the past year, and each one had different technology. “I can’t emphasize enough the importance of our relationship to SMS and making the most out of its technical support services. SMS also keeps us informed on the latest technological developments, especially with the Tier 4 engines.”

A Pan-Canadian relationship

Martin Dubé isn’t shy about complimenting the SMS staff who work with EBC. “The quality of service has kept pace with our company’s growth curve throughout the last 20 years. Because we work not only in Quebec but across Canada, having a Pan-Canadian distributor like SMS is important for us. SMS offers the entire range of products we need, whether for mining or construction.”

“We are very pleased with the relationship we’ve built with SMS,” Mr. Houle added. “Our expectations were very high, and they have been able to meet our difficult demands.”

SMS Sales Rep Michel Charest pointed out the satisfaction is mutual because Komatsu chose EBC to participate in its Brand Management program. The program targets strategic markets, such as mining and companies working in that field, focussing on Komatsu’s excellent high-value-added services, including accelerated product delivery, parts and service.

Mr. Houle emphasized that EBC is entirely Quebec-owned and remains a family business that upholds the values ingrained by its founder. “The Houle family is no longer the sole owner, as several key employees are now partners,” he explained. “But the original founding values, such as respecting our word, respecting people, planning, thoroughness and maintaining budgets and time lines, are still what guide our operations. These are the values we pass on to our employees and we will retain those values as we grow.”