Gaining Access –

TerraPro Group

In 2007, Richard and Colin saw a demand for access mat products and services in the resources sector. While TerraPro’s customer base includes construction, utilities, engineering and mining industries, the largest market it services is the oil and gas industry. Drilling has been done for over a hundred years so most sites with easy access have been exhausted – oil companies must now go further into wetter terrain to keep drilling.

Both Richard and Colin had some peripheral oil field involvement and recognized an opportunity as well as the need to treat the ground on these projects better with regard to environmental considerations. Originally the business was intended to be a rental company for another company’s mat, but the inventory wasn’t available, so TerraPro built its own wood mats. The company also transports, places and manages them.

Wood as a supporting structure for access to remote locations has been in use since the early 1900s albeit in a much more primitive form than today. Termed corduroy road construction, the technique takes logs and stacks them like toothpicks perpendicular to the line of travel, providing support over soft areas, muskeg, and the like. “The Alaska highway was built using this method as temporary access for construction vehicles,” Colin explains. “It was in the late 1900s (‘80s and ‘90s) that mats in their current form were developed for oil field access in the south east U.S.” These modular access mats have been in use in Canada since the late 1990s and are transportable from job site to job site.

Matting can range in price from $450.00 to $800.00 per mat depending on the quality of wood used. The lightest and cheapest form of mat is the fir mat, which is made of fir softwood. Then there is the hybrid mat, which is fir and oak, followed by the more durable all oak mat. The mats are all constructed in the same three layer fashion: “14 footers on top; in the middle are eight footers going across and then 14 footers on the bottom.” TerraPro has also developed interlocking composite mats which, although far more expensive, are lighter and float which allows them to span short stretches of open water.

Alberta has different kinds of terrain ranging from mountain and muskeg to native prairie so different products and strategies are needed. “For native prairie we typically use a fir mat simply because the ground structure is there. However, we don’t want to harm the native prairie grass under the mat, so we put a mat in to take the tires off the ground. If you have a sheet of plywood on the highway, a thousand vehicles can drive over it with no damage, but one truck on soft ground driving over that sheet of plywood will turn it into splinters as it is not strong enough to support that weight. So, when we go into really soft ground we will put multiple layers of mats down.” The joints are staggered at different intervals so the mats form a road system that can be up to 24 inches thick to support vehicles as they travel across the muskeg.

Before matting really found its place in the resources sector, access to remote areas was restricted to the winter months when frost hardened the ground, allowing vehicles to travel across. The drilling cycle for oil and gas in some remote areas would be done on a four month cycle; freeze up in October, break up in March. “You had to get in after freeze up and out before break up. What matting has done in that industry is what’s called load leveling. It has really taken the workload in these industries and distributed it more evenly throughout a twelve month period. The benefits are pretty significant in terms of labour force management, safety efficiencies in the workplace, etc.”

Efforts to travel in times when the ground was not frozen would result in damage to the terrain. Yet without mats, if there was a need to go into these areas on a year round basis, it would require the construction of roads – even though these roadways would generally only be in use for a finite period of time. “That would disrupt not only the vegetation and vegetation growth, but also wildlife and waterfowl, fish, habitat disruptions, etc. But when the temporary roadways are using mats, it’s much easier to get the work done and to move out, removing the support for travel without disruption to the ground underneath.” And, unlike with traditional roads, once work at a site is complete, the mats can be reused elsewhere.

TerraPro is involved in ongoing research with some of the industry’s leaders in developing and improving the methodologies and technologies needed to clean mats for reuse. “Our environmental efforts are first and foremost in the product we provide and the way we provide it. Second to that is an initiative that we are undertaking currently which is the development of the capacity to clean and disinfect matting products as they move from site to site. One of the most significant advantages is related to the agricultural world in western Canada. Clubroot is a fungal disease that attacks canola crops in Alberta. The whole movement of products that come into contact with the ground is critical to ensure that the fungus is not transferred from site to site. We must ensure that the mats don’t infect the next target destination.”

How does one even track 25,000 pieces of product without serial numbers or tags? TerraPro developed a proprietary mat tracking system for its inventory – The Mat Tracker. “What we do is equip our field operators with mobile devices that allow them to input into the device every tracking movement that describes the product, types, the location from which it moved and the fashion in which they got there. That info then finds its way to a wireless device, a data engine manipulates the information and produces graphical mappings on where the mats are located and how many are located at any given site.” The technology allows clients and employees to track the mat inventory and deployment online.

The importance of being able to track mat location becomes obvious when the required logistics are examined. The nature of the industries using the mats is such that TerraPro’s product is generally used in remote locations and stock needs to be readily available. The company will typically look for storage locations close to some of the primary areas needed and will rent storage space for short periods of time. Mats are constantly being relocated.

From a business perspective, it is primarily a rental business model and the main product for rental is the access mat. An inventory of 25,000 mats takes a pretty significant amount of capital and, in order to grow at the pace the market demanded, TerraPro had to move pretty quickly to acquire it. “Once we used up our own internal capital we realized that it wasn’t adequate to meet the market demands. We engaged a small boutique investment house and initially set out with a limited partnership model that is fairly unique in its approach. It was our intention as we moved forward to create an investment model which was not fraught with the obligations and liabilities of conventional debt regarding securities and all the bank conditions. Nor did we want to give up any equity in our business, so that took us out of the world of angel investors and private equity.”

The company ended up creating a limited partnership investment that takes its top-line revenue and distributes it to investors who are willing to participate in the ownership of its inventory. TerraPro fulfilled the requirements of its first limited partnership and actually ended up over subscribing by getting more interest than targeted, bringing in about $7 million of capital. Subsequently, it also generated a vehicle that allowed investment in a similar fashion, but is also RRSP and TFSA eligible. This brought TerraPro into the world of the market dealers who distribute its product and attracted additional capital to its business.

The company is currently expanding into Vermont and is chasing not only the oil and gas industries but also power transmission line work. “Based on President Obama’s comments on the U.S. being a large provider of oil and gas, we are going to capitalize on the drilling programs that they’re starting to push. We will fight tooth and nail to get involved in the pipeline if it goes through. We are doing work for some major players on the pipeline integrity side. Expanding into the U.S. can be seen as strategic in order to garner the contracts necessary to work on the pipeline in both the U.S. and Canada.”

By providing its clients with a unique service, and with its Mat Tracker making it more efficient and more organized than much of the competition, TerraPro is using its technology, logistics knowledge and products to solve any access problem with which it is challenged. In an amazingly short period, TerraPro has grown to become a major player in the matting industry and is well positioned to remain at the top of its game as the preferred supplier for terrain protection and remote access products.

June 19, 2018, 8:19 AM EDT

A Proactive Approach to Resolving a Longstanding Debate

About forty skilled Central and South American workers from Ecuador, Peru, Columbia and Costa Rica came to British Columbia, Canada as temporary foreign workers (TFWs) in 2006. This story incited Labourers’ International Union of North America (LiUNA) call for reforms to Canada’s TFW program (TFWP) and the International Mobility Program (IMP). LiUNA, a powerful voice within the construction industry with over half a million members – 110,000 of whom are in Canada – has been the only Canadian union to address the issue.