Smart Growth in a Key Industry
Ron Lee Construction
Sometimes, success is found in the most unusual of places. Ron Lee had an idea for a company that revolved around the housing market, but the recession of the early nineties put a halt to his progress. Instead, he entered the pipeline industry, utilities and hydro sector…
What began as a smaller company then grew rapidly as it expanded into the oil and gas industry. Its success is in part due to overcoming the challenges in reinventing itself. We spoke to Kevin Lee, the president and son of the owner, to learn more.
1989 was the year that Ron Lee started this family business by working on subdivisions, basements, water and sewers. Ron had been the general manager of another excavating company, so when he decided to branch out on his own, he already had some contacts in place. Unfortunately, it was not long before the recession hit which adversely affected the housing market. Instead of giving up, Ron redirected his goals to include the pipeline industry along with utilities, hydro and also some local quarry work.
“That is when he branched away from the housing work,” says Kevin. “He weathered the storm and did not go back to the company’s original focus. He kept on the present course which led him to the oil and gas industry as well as pipeline work, which is what we specialize in to this day. Once he shifted focus he knew this was the direction the company needed to go in, and was very passionate about that. In a way, you can say that the recession was one of the vehicles that steered it towards this industry.”
Ron Lee Construction’s speciality is investigative digs. If there are any anomalies or indications of potential problems with pipelines in Ontario, the company digs them up, makes any necessary repairs, restores the pipeline and backfills to bring the site back to its original or improved state.
Before even acquiring permits to dig, the team performs a thorough assessment of the site and manages the fleet, equipment and any sub-contractors required. After all the permits and approvals are in place the site is accessed and the pipe undergoes a hydro vac procedure to safely expose it and any foreign crossings. The topsoil is stripped and separated and the pipe is excavated and sandblasted. A third party company performs the inspection and Ron Lee Construction welds or repairs the pipe as required. Next, a two part coating is applied to the pipe. It is then backfilled, reinstated and the ground is reclaimed. It is all part of the maintenance of the pipeline.
“We also do site and land reclamation for pre and post construction activities. If there are any washouts, exposures or depth of cover issues from washouts, agricultural plowing or illegal crossings we make all necessary earthwork repairs with environmental consultants and engineers. We do various station work projects, excavating or hydro vac work inside stations, upgrades for piping and electrical, and are MOE licensed to properly remediate contaminated sites.”
Ron Lee Construction’s priority is safety. In the last two years, it has accumulated over 300,000 hours of work and attained a total recordable incident frequency (TRIF) rating of less than 1%. (TRIF is an industry benchmark for statistical incident analysis.) It has an excellent safety rating and a safety culture that is second to none.
Employees of the company go through a rigorous regimen of training courses that are not limited to union requirements but include many internal training courses. Employees receive pipeline construction safety training, ground disturbance training, health and safety training for supervisors, confined space training, respirator training, traffic control, fire extinguisher training and, of course, Workplace Hazardous Materials Information System (WHMIS) to name a few.
Ron Lee Construction’s services presently cover all of southern Ontario, but there are plans to deal with pipelines in northern Ontario. “We would like to expand further north and eventually outside of Ontario; there are a lot of pipelines in Manitoba, Saskatchewan and Alberta. However, the timing has to be right with regards to the challenges the oil industry is currently facing. But, we do have clients working in these other provinces, so we will be expanding our way out.”
PROFITGuide.com publishes a list of the 500 fastest growing companies in Canada every year and Ron Lee Construction has been on the list for three years in a row. In 2012, it ranked #106; in 2013, it was #110; and for 2014, it sat at #100. It forecasts being on the list for a fourth straight year.
“We were a smaller company up until a couple of years ago when we doubled in size, and then doubled again. The demand was here as there has been a lot of focus on pipelines and pipeline safety. It’s prevalent in the media, which means that there is a lot of pressure on pipeline companies to keep up the integrity and maintenance of their lines.”
As a small company, Ron Lee Construction found that it needed to grow its capacity to attain desirable contracts. This became a test of the company and its management. The execution of the expansion was successful; production increased while budgets were maintained.
When the newly expanded company began its first large pipeline maintenance contract in 2012, there were doubters. “It was the first time that we had the opportunity to expand into a larger company. Most thought we would falter and fail. The project itself was not as difficult as a lot of others, but it opened up some doors and gave us the recognition that we could work on large-scale projects.”
The company went from a workforce of twenty-five to forty people to a project that needed one hundred to one hundred and fifty including subcontractors. It was a huge pool of personnel, equipment, supplies and trucks that had to be purchased. There was not simply the challenge of managing the work, but managing the financing to make sure that it was not financing more than it could make back. It was a logistical test that included budgets, production and quality with safety maintaining a key focus and overall management.
“We pulled it off. This is what started to form our reputation as a company that could handle larger projects – growing from our smaller roots. From there, we continued to improve in all aspects of the industry, and now we are amongst the top performing companies in Canada.”
As with any industry, it is difficult to find the skilled labour necessary to facilitate such an expansion, and this one had to be accomplished swiftly. To help the process, a search was done across the country starting with the unions. At the same time, it found qualified supervisors and management from other companies that were going in the opposite direction and downsizing.
“We also drew from out of the province in places like Alberta. There was a also a large pool of locals who were from Ontario, who had moved to Alberta for work and desired a relocation back to Ontario to be closer to their families.”
Twenty years ago, Kevin did not imagine that this is where the family business would be today. He jokes that in a further twenty years, he will “hopefully be close to retirement but most that know him don’t believe that.” He does, however, foresee that Ron Lee will be bigger and taking on more business as it expands into other provinces. The company is also looking at avenues within the oil and gas industry and possibly sectors such as utilities and energy.
Kevin emphasized how important it is to Ron Lee Construction to maintain the family-run enterprise in a hands-on fashion. “There are a lot of benefits to a family business and smaller operations, because they are more hands-on and available. We are involved in every detail along the way. Clients are surprised that they can still get that same attention on a larger scale without compromising the work.”