Achieving a business turnaround in just two years is a significant accomplishment. Doing it amidst a major market downturn is another level of achievement entirely, but one that Force Inspection Services can lay claim to.
Dealing with the Downturn
Since 2003, Alberta-based Force Inspection Services (Force) has been an essential niche service provider to the oil and gas industry, inspecting drill pipe and tubular casing used by oil producers and drilling contractors. But by early 2015, low oil prices and increasing competition were creating concerns about the company’s future prospects. Force recognized it needed new strategies that could help it succeed in a more demanding environment, as well as investment financing to implement necessary changes. In Resource Merchant Capital (RMC), Force found a partner that could provide the full range of support it needed.
“RMC is not your typical capital provider,” said Dave Joinson, Force’s President and CEO. “They’re incredibly good at drawing out the passion and the direction of a company…they’re great listeners. Together we looked at problems and opportunities in the industry, and we took an honest look at our company as part of a gap analysis. RMC helped us define our vision and five-year plan. Then they provided the financial and process support to help us execute on it.”
Investing in New Equipment and Capabilities
An immediate opportunity lay in expanding Force’s service lines and in-house capabilities. Previously, the company had focused exclusively on inspection – bringing in drill strings made up of hundreds of lengths of pipe, cleaning and inspecting each section, and sending out those that needed repair to third-party machine shops. Although only a portion of the pipe required repair, the need to outsource this work was delaying projects and relinquishing a value-added service to subcontractors.
With RMC helping to secure financing, Force was able to invest in two state-of-the-art DMG-MORI lathes. The new technology enabled Force to expand its service offering with high-value capabilities and become the industry leader in quality and turnaround times. The new machining capabilities also gave Force access to the tubing and casing market, which helped to broaden its customer base. The expansion of services and markets played a key role in helping the company thrive through the downturn.
Getting Better at Everything
Simultaneously, Force began working with RMC to instill a culture of excellence across the company. “There wasn’t anything that Force didn’t want to get better at,” said Kevin Rowand, Managing Director of RMC. “We worked closely with Dave and his team to identify and implement the processes and people that could transform Force into a leading competitor in its field.”
- Creating a safer workplace was a first priority and efforts to advance a new safety culture and procedures yielded rapid results: Force has been injury-free for the past two years.
- To enhance quality control, the company underwent API certification for all of its operations, achieving the petroleum industry’s most rigorous credentials for inspection practices.
- A comprehensive ERP (enterprise resource planning) system replaced paper-based systems, greatly enhancing efficiency while also increasing the speed, accuracy and flow of information to customers.
- RMC helped Force strengthen its sales organization, which in turn, helped to further expand and diversify the client base; and,
- Drawing on RMC’s marketing resources, Force completed a professional rebranding that helped increase market awareness, while also creating consistency between how the company saw itself and how others see it.
Joinson says RMC’s involvement has helped the company “out-service its competitors.” RMC’s large network of companies and contacts have also opened doors and led to new business opportunities for Force. But one of the services Joinson appreciates most is the provision of a CFO to handle day-to-day forecasting, budgeting and financing for the business. “It’s been a huge burden taken off, particularly through the downturn when we had to closely manage our cash flow. I’ve been able to keep my focus on creating the vision, sharing the vision with customers and employees, and growing the business,” said Joinson.
The results have come quickly. Force’s business today is larger, better diversified, and significantly more profitable than before the industry downturn. In April 2018 the company will move to a new facility in Nisku, Alberta that will house
another two lathes and double capacity. It’s a timely expansion with oil industry activity starting to pick up and Force’s list of blue chip customers continuing to expand.
Says Joinson, “RMC stood behind us in the slowest period in the oil patch. They’ve been a great support and sounding board, and they’ve been instrumental in helping us scale up our business and become more efficient. With RMC on our team, we’ve become a better player.”
About Force Inspection Services Inc.
Force Inspection Services is a Canadian privately owned company that specializes in the inspection, repair and storage of oilfield tubulars with two inspection facilities located in Leduc and Grande Prairie, Alberta. In addition to in-plant inspection, Force also provides mobile field services and repairs, including bottom-hole assembly (BHA) inspection, transverse electromagnetic (EMI) drill pipe inspection, re-facing and straightening.
About Resource Merchant Capital
Resource Merchant Capital is an Alberta-based private capital firm focused on energy, product and service companies. Its strength lies in working with entrepreneurs and owners to evolve and expand their businesses with the right strategy, financing, people, systems and process required to execute growth plans and out-compete peers.