Like so many eureka moments, Greg Kyllo, President of TA Structures, had his while enjoying a beer with an old friend in the great outdoors.
However, the story really began long before that day, when Kyllo was born in Fort St. John, British Columbia. He subsequently lived in nearby Taylor, where his father was the mayor, until 1979. Although he hasn't lived in the area since he was about twelve years old - Sicamouse is now his home - he still has strong ties to his old stomping grounds, including the old friend with whom he was relaxing that fateful day.
The duo was sitting on one of the houseboats that had been the foundation of Kyllo's business since 1993. The old friend, an oilfield consultant, was complaining about the "decrepit, old shack" that was his home for 326 days that year.
"And he said, 'Why can't they make them look like the interior of these houseboats?'" said Kyllo. "These houseboats are beautiful.' I looked at him and said, 'I don't know. Maybe we can.'"
That was how his company started to branch into manufacturing trailers for the oil and gas industry that are now being used in Mexico and Columbia in Latin America, Texas, Arkansas and North Dakota in the United States, and extensively in northern Canadian locales such as Fort McMurray and Fort Nelson.
"It was a really good fit for us," Kyllo continued. "The U.S. dollar was continuing to decline as far as the strength of the U.S. dollar against the Canadian. And we knew that we needed to diversify and start building more Canadian product, because the exchange was really hitting us. So, back like ten years ago, a $100,000 US houseboat would fetch about as high as $143,000 Canadian. And today a $100,000 US houseboat is only worth about $97,000 Canadian. So, huge swing in the pricing. So, it was very difficult to remain competitive."
The houseboat business took a big hit during the early days of the recent economic downturn in 2007 and 2008. That segment of Kyllo's operations has declined by seventy per cent in that time."
"So, we were looking at increasing our Canadian sales," he said. "We already were Canada's largest houseboat rental company. There weren't a lot of other houseboat companies or [more] houseboat market in Canada. We couldn't just start pushing more of our houseboat product into Canada. So, we determined that we needed to find another product that we could manufacture at our facility that could be sold in Canada. And at the same time we were looking for product that physically fits in the confines of our two production lines and also required skill sets of all the major areas within our plant. To just starting building, I don't know, say, steel skid assemblies or something like that, that would be great to keep the weld shop busy, but that wouldn't necessarily help keep our carpenters and our electricians and our plumbers busy."
Ultimately, the trades that Kyllo had at his disposal were the very trades necessary to build wellsite trailers to satisfy individuals like his old friend who had lost patience with the status quo of work camp accommodations.
"Obviously, there are different certification requirements and that sort of thing, but we already had all of our major skill sets in place," he said. "So, for welding for the skids, and the construction department, and the interior finishing, and the cabinets and millwork. All those departments and all those skill sets already existed within our facility. It was just a matter of applying for the different certifications. And away we went."
The work began just prior to an oil and gas trade show in Calgary in 2005.
"It was about four weeks to the show," Kyllo recalled. "We called and were able to book some outside space. And we built our first unit in about three and a half weeks, start to finish, and had it in the show in Calgary. That first year, we only built three units and obviously it's continued to grow since then."
Kyllo and his crew have used their expertise as manufacturers of high-end houseboats that can range in price from $200,000 to over $1 million to produce unique trailers that are easily identifiable as their own work.
"On most of the wellsites that you see out in the industry, until you get up and see the nametag, you can't tell the difference between [the different manufacturers]," Kyllo explained. "They all basically look the same. Also, one of the items that we'd heard from some of our perspective clients was that there's a lot of maintenance on the exterior as far as rust. So, lots of painting and sanding, and it's just ongoing maintenance."
"We have a really good welding facility," he continued. "And we do a lot of aluminum work, obviously, with the hulls and our railings and spiral staircases. So, we basically decided that we'd use aluminum for all of our exterior accessories and trim. There's no rusting, obviously. There's no painting. There's no ongoing maintenance. And, plus, it's a little bit lighter."
Kyllo admits that he has moved into a "very competitive" market in his effort to diversify his business, but he also feels that TA Structures is developing a strong relationship with the energy sector.
"Obviously, we haven't been at it forever," he added. "So, we're the still the small guys. But we definitely build a very high quality product."