 Regan Davis explains that this young company is banking on a desirable product and the right team to achieve growth.
Founded in 2001 to manufacture and market a newly developed, non-metallic pipelining product for the oil and gas industry, Flexpipe Systems has grown from modest revenues of $2.5 million during its first year to projected revenues greater than $40 million in 2007. According to Regan Davis, president and CEO of the Calgary, Alberta-based company, the growth is simply a result of having a desirable product and the right people on board.
 Regan Davis, President and CEO
The company quickly built a cadre of customers in Western Canada, and realizing the potential south of the border, ventured into the United States. Davis explained that the US oil and natural gas market is several times the size of the Canadian market. “We still have significant and exciting growth potential in Canada, but we see real opportunity in the US, certainly in the short term,” he said. In fact, Flexpipe Systems recently boosted its inventory in the US, added three individuals to its US sales team, and hired an operations manager, service technicians, and project support specialists. “We are very excited about what we can accomplish in 2008.”
Up until now, Flexpipe Systems has been avoiding inter-continental expansion in an effort to effectively manage its organic growth, but that will soon change. According to Davis, Flexpipe will be ready to take the big leap in the next 12 to 24 months. “We will continue to grow our marketshare in the US and Canada, but ultimately, I see Flexpipe in the global arena,” he said.
Although Flexpipe has been focused on the oil and gas gathering and distribution market, the product is suitable for any application that involves moving liquids, and the company plans to begin marketing to other industries. “The oil and gas industry is by far our largest customer, but we see additional opportunities in industrial services, municipal mining, even forest-fire fighting.”
Since Flexpipe Systems got off the ground in 2003, it has significantly bumped up production capacity, reduced physical waste, and increased efficiencies, mainly as a result of a culture dedicated to continuous improvement.
In 2006, Flexpipe Systems brought once-outsourced manufacturing processes in house. According to Davis, when the company was young, outsourcing certain processes was advantageous, but as it continued to grow, it began experiencing quality, cost, and supply issues. “We made a strategic investment to bring those processes inhouse. In doing that, we have improved the quality of our product and enjoy much more control over raw material costs and delivery times.”
Davis also pointed out that Flexpipe Systems achieved ISO:9001 compliance in July of 2006. “As a young organization, we wanted to have a management system in place to provide an accountability and tracking system for every aspect of the business, from price quoting, order processing, and production scheduling to delivery and installation,” said Davis. While many companies take years to achieve ISO certification, the team at Flexpipe reached its goal in a little less than eight months.
Although such initiatives have dramatically impacted the company, small changes have made a difference as well. For instance, Flexpipe Systems invested a mere few thousand dollars to tweak is manufacturing equipment, which has increased line throughput by 20%. It is also looking into recycling initiatives to prevent materials it cannot sell from ending up in a land fill.
Davis also mentioned that throughout 2005 and 2006, the company’s engineering group completely re-engineered its 300 ANSI product line, exploring various raw materials with the aim of improving quality and reducing costs. Other product improvements were achieved in 2006 when Flexpipe introduced a carbon-based additive that extends the product’s UV life from two years to 20.
In June 2007, in response to market demand, Flexpipe introduced a higher pressure version of its corrosion-less composite pipeline system. The 600 ANSI product line is capable of withstanding pressures up to 1,500 pounds per square inch and carries the potential to dramatically increase the company’s marketshare.
Building a team
Because of the technical nature of Flexpipe’s product lines, the company made a conscious decision in the beginning to take a direct sales approach, rather than go through a distributor. But the newness of the product meant it needed to start a sales team from scratch. New members of the sales team go through a one-week training course that exposes them to the production floor, field work, installation, and engineering to give them a full understanding of the product. Once the initial training program is completed, a job shadowing and mentoring program helps get new hires up to speed quickly.
Having manufactured and sold close to 2,500 miles of composite linepipe, Flexpipe has created a team of installation experts who provide onsite field services support. Although the company does not provide installation services directly, support specialists travel from job site to job site helping customers install the Flexpipe product, which can either be trenched, ploughed, or pulled through an existing pipeline. The company also offers a one-day training course to educate and certify pipeline installers on its proprietary joining system.
No matter whether an employee spends most of his or her time building the pipe or selling it, they are all part of a team. “All of our employees are clear on what our priorities are as an organization. We have created a culture that allows them to make a difference when they come to work every day, and they do. The success of this company is nothing more than the result of their collective efforts.”
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