Rod Ruston spearheaded this company’s dramatic turnaround and subsequent rapid growth.

Talk about a turnaround: when he came to North American Construction Group two years ago, Rod Ruston’s primary goal was to help get the financially troubled company back on solid ground.

To say he has succeeded would be an understatement. Not only is NACG once again profitable, but revenue has nearly doubled, and the company went public in November of last year. NACG is now listed on both the Toronto Stock Exchange and the New York Stock Exchange.

North American Construction Group is an Edmonton, Alberta-based provider of mining, site preparation, heavy construction, piling, and pipeline services. Ruston, president and CEO, says the company’s revenue will top $600 million this year, up from about $350 million when he came on board in May of 2005, and the company’s payroll has surged from 1,200 to 1,800 over this same time. Just as amazing, almost all of NACG’s growth has been organic—there have been only a handful of small acquisitions during the past couple of years.

Ron Ruston

“In most turnaround situations, the first moves are to cut back on capital spending, attack costs aggressively, and then strive to grow,” said Ruston. “But we saw a lot of capacity out there in the marketplace and felt we had to claim our share of it. Otherwise, we would have sacrificed our competitive position. We’re four times bigger than our largest competitor, and we decided we didn’t want to restrain growth while getting the finances under control.”

As you might imagine, NACG’s business is extremely capital intensive: serious growth requires a large commitment to buying lots of heavy equipment. So to prepare for growth, the company (which already maintained one of the largest independently owned equipment fleets in Western Canada) bought five new 240-ton trucks within the first few months of Ruston’s arrival, without any new contracts to support them.

“The trucks weren’t idle for a single day,” Ruston said. “We ended up making $29 million in capital expenditures my first year, and more than $100 million this past year. I believe this commitment to seizing the opportunities before us while they were there was the key to quickly regaining the confidence of our customers and realizing the rapid turnaround and growth we’ve experienced since.”

Unique processes
First established in 1953 as a road equipment and construction company, NACG now boasts diverse expertise in industrial and heavy construction, mining, piling, and pipeline. This diversity, Ruston explains, gives the company a competitive edge.

“One hundred-ton trucks are standard in the construction industry, but we use 330-ton trucks in our mining operations, so we can use these to do a heavy construction job faster and less expensively than our competitors. Our engineers and technicians have developed unique procedures and processes that provide a complete management system for our clients,” said Ruston.

Throughout its history, NACG has significantly contributed to the Western Canadian landscape. Major projects have included various mining, grading, and site preparation jobs for Canadian Natural Resources, work on the TransCanada Pipeline, site preparation and haul road construction for DeBeers Canada, and work in the oil sands of Alberta—the largest non-conventional source of oil deposits in the world.

In fact, 75% of NACG’s revenue now comes from work associated with the oil sands. “We’ve been the suppliers of civil construction services for every major plant built on the oil sands during the past 30 years,” said Ruston. Suncor Energy began its Millennium project in the oil sands in 1999 and contracted with NACG to perform all the civil construction work, including excavation and backfill, underground piping installation, and piling work.

“It took Suncor 20 years to make money in the Alberta oil sands because the technology for extracting oil from the sand is so complex,” said Ruston. “The technology is still evolving, which is why extracting this oil is relatively expensive compared to drilling for oil. But as conventional sources of oil begin to dry up and this technology continues to improve, oil from the sands will become more cost competitive.

“It costs significantly less to transport this type of oil into the US than oil from overseas,” Ruston noted. “And there’s always the issue of political stability—the ability of the US, the world’s largest user of crude oil, to source oil from countries with stable governments will always be a driver.”

Organic growth
Looking ahead, Ruston says he prefers to keep the company’s focus on organic growth, at least in the near term, with the goal of reaching the $1 billion sales and 2,500 employee marks by 2009.

“There’s still plenty of work out there for companies like ours, so we want to make sure our investment in heavy equipment is fully utilized to capitalize on our buying power to improve our margins. Our rate of organic growth has been so strong that we don’t want to start making major acquisitions and end up back where we were a couple of years ago.”

To this end, NACG has invested significantly in systems during the past two years. “This has been a big part of fixing the business,” said Ruston. “It allowed us to implement proper cost controls and reporting systems and processes. However, we still have a lot of paper in our systems that we want to automate.”

As a public company, of course, NACG now also has a commitment to its shareholders. So far, so good: the company’s stock price, which opened at about $16, was trading near $23 only six months after the IPO.

NACG’s vision is to be the construction and mining contractor that everyone wants to work for, everyone wants to hire, and everyone wants to own. “This means providing the highest possible level of service to our clients, an outstanding work environment for our employees, and a strong return on investment for our shareholders,” said Ruston. “As the leader of this company, those are my goals each and every day.”

Don Sadler is a writer and editor specializing in issues of interest and relevance to businesses and executives. He can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .