Up to the Challenge
North American Construction Group
Alberta based North American Construction Group (NACG) has decades of experience in heavy construction and mining services. “We’ve got over 50 years as a company working in harsh northern climates and some very unique [ground] materials such as muskeg and sand,” says Chief Operating Officer Joe Lambert…
Understanding how to overcome the challenges that the northern Alberta landscape serves up is key to the company’s success. Working in soft, swampy muskeg would sink most operations – literally. NACG, however, knows how to navigate these northern bogs without getting swamped themselves. “Our experience in soft underfoot conditions and in the material characteristics of the areas we work is quite unique,” Mr. Lambert adds.
North American’s experience and skill is backed up by one of the largest independently owned equipment fleets in the region. “We have over 500 pieces of heavy equipment and a couple thousand light assets,” Mr. Lambert reports. Ranging from small 45 tonne excavators and D6 dozers to the largest bulk earth mining equipment around, NACG’s extensive fleet can handle “the smallest civil works and underground utilities to the largest bulk mining jobs.” And, by drawing on their extensive experience in the region, the team is able to match the right equipment to the right job for the safest, most efficient results.
The company’s extensive skill set and fleet ensures that the team can service a mine site from beginning to end. “With oil sands mines, mine life can exceed 40 years, which is pretty unique in the resource industry,” Mr. Lambert explains. “Mine sites naturally start with a high construction and heavy civil need as they are being built, but as mines mature the needs change to recurring work in mine services such as pre-stripping overburden, mine operations support, and muskeg removal. We have the skills, the capacity, the people, and the equipment to meet these changing needs and really provide a full life of mine relationship [to] our clients.”
North American’s specialty oil sands mine experience includes niche areas such as the retaining wall system known as Mechanically Stabilized Earth (MSE). “There have been about 50 of them built in the oil sands over the last 30 odd years and we’ve probably built 46 of them,” Mr. Lambert reports. “So we have those core skills in key areas of civil construction, in addition to having the fleet and flexibility to do large bulk work. I think that sets us apart from a lot of our [competitors] who are either one or the other, but don’t necessarily flow through from civil works to bulk earth works.”
The team’s wide ranging capabilities also allow the company to personalize its response to each client and situation, rather than resorting to a one-size-fits-all approach. “It’s not a recipe that can be applied to each client identically, but rather an individual approach based on two basic premises: operating experience and fleet flexibility.”
Regardless of the approach, NACG is committed to safety. “North American sees safety as a core value of the company and a moral obligation to our employees,” Mr. Lambert states. He also points out that, when dealing with some of the world’s largest oil companies, a second rate safety record simply isn’t an option. “Safety is just a license to operate,” he explains. In response, the team continues to strive for a target goal of zero harm. “North American believes in maintaining a focus on continued improvement. We’ve been at the forefront in developing processes such as pre-hire screening, fitness for work testing, green hand programs, frontline supervision, and safety leadership development. We are constantly striving to come up with new and innovative ways to improve our safety performance. Our persistence and commitment to achieving that target zero never changes. We are always looking at how we can improve and never take safety for granted.”
NACG is also a socially responsible business. “Our employees and our company are both very engaged in supporting local charities in the areas where we work,” Mr. Lambert explains. From supporting local children’s hospitals and food banks to participating in Santa’s Anonymous, the team is always actively involved in a worthy cause. NACG is also committed to the involvement and collaborative participation of local First Nations groups on many of its projects. These partnerships not only benefit NACG, but also provide significant and long lasting benefits to local First Nations communities.
The team’s focus on protecting the environment is also notable. “We do a lot of reclamation work for clients,” Mr. Lambert explains. In other words, the team does not just remove earth – they also carefully return it, restoring the local environment to its original state. “Reclaiming lands – that is an exciting thing for us to participate in,” Mr. Lambert says. NACG also strives to reduce emissions by focusing on operational efficiency in order to minimize fuel burn and by utilizing new emissions reducing technology in its equipment.
NACG has dealt with its fair share of challenges over the past five decades, but has learned how to end up on top. “The oil sands heavy civil mining environment is a competitive marketplace,” Mr. Lambert admits. “There is a lot of equipment and a lot of competitors. But we are overcoming that by driving operating performance to become the safe, low cost provider and offering added value to our clients through our extensive experience and fleet capacity.”
Ironically, one issue that is not bringing much of an added challenge are current oil prices. “Although oil sands mining projects are major capital projects that can be in the tens or twenties of billions, their operating cost is fairly low,” Mr. Lambert explains. “And they have 40 or 50 year mine lives, so although near term fluctuations in oil price may certainly trigger a cost consciousness, these mines and their operations are set up for long term oil pricing. They don’t react as much to the near term fluctuations like some areas that have shorter production profiles.”
Tangible evidence of NACG’s ability to overcome current industry challenges is found in its recent financial statements. “Over the past few years, North America has made significant improvement on our debt level and improved our amended debt agreements,” Mr. Lambert reports. “We had a net debt of $424 million in December 2011 and [at the end of] our most recent quarter in 2014 it was $145 million. The company has also recently implemented a dividend and a share purchase program that is seen as adding shareholder value.”
Looking ahead, NACG continues to expand its presence, particularly in oil sands mining. Most recently, the team has begun new activities at the Fort Hills and Kearl oil sands projects. “We are very active at Fort Hills and Kearl,” Mr. Lambert shares. In fact, the company is active “on most every oil sands mining site in Alberta.” Always on the lookout for new opportunities, the team continues to tender for new work, even on sites where they have long been active. “Although we have been on the Base Mine site for over 30 years, we do have a new MSA that we are tendering for 2015. So even though that is a longstanding client, it is another area of exciting opportunity for us.”
The team is also mindful to maintain a safe level of diversification and, in response, has begun involvement with some of Canada’s most ambitious infrastructure jobs, including British Columbia’s massive Site C Hydroelectric project. The company is also eyeing LNG related opportunities on Canada’s west coast. A form of oil sands extraction called Steam Assisted Gravity Drainage, or SAGD, is another area of potential expansion with lots of promise. “Those are construction areas that fit our skills and our capacity well,” Mr. Lambert explains. “We try and look across the resources industries in Canada for areas where our fleet and skills and experience match up to see where we can find areas of diversification potential.” With over half a century of success already behind it, NACG certainly appears to be positioning itself for an equally bright future.