Innovation

You don't have to travel alone

Written by Eleanor Beaton

Prairies & Territories Winner: AMR Process Inc.
Location: Leduc, Alta.
What it does: Engineering-process designs and equipment for oil and gas extraction
President: Ashley Robbins

Ashley Robbins’ clients might be among the world’s biggest and richest companies, but that doesn’t mean they don’t like a bargain. That’s why keeping costs down without sacrificing service quality has helped to make Robbins’ company, AMR Process Inc., a supplier of choice of engineering-process designs and equipment used by oil- and gas-extraction firms worldwide.

“We’re now recognized as a major player, even though our competitors have 10 to 20 times our turnover,” says Robbins, president of the Leduc, Alta.-based firm. Last year, its revenue grew by 81% to $1.8 million, and Robbins says it’s on pace to double this year. Not too shabby for a company that has been in the export game for only five years—and employs just nine people.

Launched in 2002, AMR secured its first contracts close to home. But three years after AMR’s inception, Robbins looked farther afield.

He put together a list of the top 10 oil- and gas-producing and reserve countries, then identified the extraction projects in those countries in AMR’s sweet spot: small-scale projects in the $1 million to $2 million range. But Robbins quickly ran into a chicken-and-egg quandary. “Everyone wanted local references,” he says. “But back then, we hadn’t done business in those markets, so we didn’t have references to provide.”

To overcome this hurdle, Robbins employed a strategy that has since become instrumental to AMR’s ability to punch well above its weight: forming strategic alliances. Good partnerships are symbiotic. AMR’s contribution comes in the form of technical know-how that is lacking in the countries the firm targets, especially among local fabricators who themselves want to win more oil and gas business. Robbins has pulled out several stops to find such potential partners, including a search-engine optimization program on AMR’s website to attract foreign fabricators. With those leads in hand, he then enlists the help of in-market Canadian trade commissioners to check out the fabricators’ client lists and project history.

“If [the fabricators] have the right contacts, then we do business with them,” says Robbins. This strategy creates a win-win situation: AMR secures a local reference, and its proprietary designs help the local fabricator produce millions of dollars worth of oil and gas process packages.

Such was the case in Indonesia, where Robbins joined forces with a local manufacturer. “We went to them and said, €˜You don’t need to buy equipment from someone else,'” he says. “€˜You can use our designs and fabricate the equipment yourself.'”

The fabricator took the bait, and it soon became a local reference for Indonesian prospects (the country now generates 4% of AMR’s exports) and signed an agreement to become a licensed supplier of AMR’s designs. AMR has repeated this manoeuvre in all its major export markets, including Iraq (45% of its exports), Tunisia (27%), Nigeria (12%) and China (4%). Says Robbins: “Once you get your foot in the door, it becomes so much easier to win more business.”

Of course, winning the business is just the beginning. Shortly after getting into the export game, Robbins discovered a fiscal challenge that threatened to put him at a disadvantage against his deep-pocketed competitors. As a small company with limited resources, AMR initially struggled to finance the bid bonds of up to $500,000 demanded by project owners as security against the winning bidder violating the terms of its bid. “That wouldn’t faze the companies I go up against, but it tied up far too much capital for us,” says Robbins.

And if AMR did win a bid to supply, say, $1 million worth of product to an international client, it couldn’t be sure that the client would pay up. Robbins therefore secured accounts receivable and surety bond insurance from Export Development Canada, helping AMR to borrow the funds required to post bonds and fill orders.

If AMR’s technical ingenuity and street smarts have helped it penetrate new markets, it’s the company’s ability to manage expenses that keeps it there. Teleconferencing and document-control software, which ensures consistency among the hundreds of drawings required for a single engineered process, are crucial to keeping costs down and quality high. “We’re able to provide excellent service and results with a small fraction of the manpower of our competitors,” says Robbins.

The company regularly uses web-conferencing software to conduct clarification or even kickoff meetings with customers and partners, who may be in as many as four locations at the time. The software allows each participant to “share” a computer screen and review materials on their computers simultaneously.

Of course, some things can’t be done over the web or by phone. Robbins says he’s quick to hop on a plane when his gut instinct tells him that a face-to-face meeting is warranted: “We just always try to make good use of technology wherever possible.”

Originally appeared on PROFITguide.com
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