North American Construction’s president and COO (chief operations officer) Joe Lambert sheds his corporate identity when he walks into the storied Spruce Grove company’s enormous, new, state-of-the-art repair/re-build facility in the Acheson Industrial Park.
Lambert’s like a kid in a sandbox, showing off several of North American’s 240-ton to 400-ton earth-moving trucks in the shop for refurbishment and rebuilding.
These are not just trucks, they are TRUCKS — some of the biggest in the world.
With its most significant expansion since 2012, the publicly-traded company purchased all of former competitor Aecon’s contract-mining division, including its entire dirt-moving fleet, in November.
The 26 240-tonners added from Aecon has bumped North American’s dirt-hauling fleet to 300 trucks, from 100-ton carriers to 31 of the world’s largest 400-tons-at-a-time monster haul trucks
North American now has the largest fleet of heavy haulers on the continent, almost all working in the oilsands. Its gross revenues are expected to grow by 70 per cent in 2019, to over $700 million.
The quiet industrial giant has come a long way since 2012, when new chairman/CEO Martin Ferron stood in front of his employees and told them the truth.
That, contrary to the false optimism of previous management, North American was in dire straits. Seven years ago, the company was carrying an unsustainable $400 million debt load. In just one year, its shares had tumbled by 80 per cent, bottoming out at $2.60 a share.
In 2012 Ferron and Lambert set out on a courageous right-sizing of North American. It lasted six years.
North American sold three of its four divisions — pilings, pipelines and industrial. Debt was paid down with the proceeds from each divestment. An extravagant corporate head office in Calgary was abandoned for modest administrative offices back in Acheson.
All that remained was North American’s heavy construction and mining operations — and most of that consisted of being a major earth-moving contractor at oilsands surface mines, removing, storing and replacing the “overlay” atop the bitumen deposits.
“The oilsands are our bread and butter,” says Lambert. “Once a mine is operating, there’s no on-off switch. Moving overlay is a non-stop operation.”
The executive team then set about becoming the best and most efficient dirt-movers in North America.
The new Acheson refurbishment facility was the result of the realization that extending the lives of the heavy trucks through overhauling and re-building would be considerably more cost-efficient than the previous practice of simply buying new, selling used.
Looking back, the timing of North American’s re-sizing couldn’t have been better.
When the great 2015-17 oilsands slowdown happened, the company was already lean and mean. “We had already restructured and done everything possible to be ultra-competitive,” says Lambert. “All resource extraction is cyclical. Through the downturns, if you are the lowest-cost service provider with a good safety record, you get the work.”
While the rest of the industry was diving headfirst into the dumpster, North American had already right-sized and refocused on its core operation. It had plenty of work orders, had shed debt and restored its credit-worthiness.
With other companies shedding assets at fire sale prices, North American Chair/CEO Ferron pushed the BUY/EXPAND button.
It easily financed the $200 million Aecon equipment purchase. A backlog of work orders had grown from $100 million at the start of 2018 to $1.2 billion in contracted work scheduled through 2023.
For the first time since Ferron took on North American’s leadership, last year the company also diversified with a $42.5 million purchase of 49 per cent of Nuna Logistics, an Edmonton-based, majority Inuit-owned road-building company in the far north. “We saw operating synergies, long-term profitability and a slight reduction of our dependency on the oilsands,” says Lambert.
When the Gouin family sold the then-private North American in 2003 for $400 million, the family kept the real estate, leasing the yard and buildings back to North American.
Last year the company, having purchased its own Acheson property beside the Glowing Embers RV Park, moved into a new, custom-built four-storey $28 million corporate, administrative and maintenance/rebuilding facility.
It’s been a tough haul, but North American is clearly out of the woods and starting to soar.
Its assets and revenues are growing, its prospects glowingly described by industry analysts. Its stock, currently around $15 a share, is at a 10-year peak.
As a long-time area company, with 150 employees here and 1,800 employees throughout Northern Alberta, North American’s revival is nothing but good news for metropolitan Edmonton.