Manufacturers Trying to Find Their Niche in Oil Industry
Post Date: Mar 30 2015
By The Grand Forks Herald
A product a North Dakota manufacturing company began making for one oil customer is now exported to several states.
The success story of a product from Steffes Corp., with locations in Dickinson and Grand Forks, served as an example this week for regional manufacturers trying to break into the oil and gas business.
Steffes, which eight years ago began making tanks and walkways for the oil industry instead of ag hopper bins, had one customer that wanted a better flaring system, said Todd Mayer, new product development and sales manager.
Steffes developed a natural gas flaring system that burns cleaner, with less volatile organic compounds released into the air, and the company anticipated the customer would order one or two a month, Mayer said during a Manufacturing and Logistics Conference held in Williston.
The company never marketed the product, but word of mouth prompted demand for the flaring system to spread. Steffes now sells it to other companies in North Dakota as well as Texas, Colorado, Wyoming and New Mexico, Mayer said.
Manufacturing companies from the region, including several from eastern North Dakota, attended the conference to learn how they, too, could make products for the oil and gas industry.
“I would say there’s very little that we can’t make here,” said David Lehman, manufacturing engineering extension specialist with North Dakota State University.
The event served as the launch of a new initiative from Williston Economic Development to reduce costs for companies operating in the Bakken by offering more products and services locally.
But it can be challenging for local manufacturers to get a foot in the door with oil companies, which typically make purchasing decisions at the corporate level.
Economic Development Director Shawn Wenko said his office will lead an in-depth study to understand the challenges the oil companies face and identify opportunities for manufacturers.
Oil industry representatives said during the conference that delays getting equipment or parts shipped in from other states often create costly delays.
“Time is money,” said Dave Ruffie, production foreman for Continental Resources.
North Dakota manufacturers have increased how much oil and gas business they’re doing over the past five years, Lehman said. But there’s room to do a lot more.
“What we’re doing is a fairly small percent of the entire supply chain,” Lehman said.
TrueNorth Steel, with corporate headquarters in Fargo, has produced oilfield tank products since the 1980s, said sales manager Scott Johnson. The company tries to stay innovative by spending time in the field to see what’s working and what’s not.
“It’s a lot more expensive to fix problems in the field than it is in our factory,” Johnson said.
In addition to oilfield tanks and catwalks, TrueNorth produces a steel containment system to contain oilfield spills that takes less time to install in the field than competing products, Johnson said.
Other North Dakota companies have begun doing oilfield work more recently.
Brad Odegard, owner of FlexTM in Wahpeton, said he first explored opportunities in the Bakken in 2011, spending the night in the Williston Walmart parking lot because he couldn’t find a hotel room.
Odegard said he found business in the Bakken by listening to what the challenges were and seeking expertise from the industry. One company representative in Denver was impressed that they could do weekly deliveries to the Bakken, he said.
Dana Wiertzema, sales manager for AIM Machining in Wahpeton, said for the past few years the company has manufactured products and reworked tools used by the oil industry. Some of company’s success has come from attending national oil conferences and reading trade magazines to find ideas, he said.
Attendees at the conference said they think the low oil prices and a slowdown in agriculture manufacturing provide opportunities for the two industries to work together.
“In the middle of the economy that’s slowing down, there’s opportunities,” Wiertzema said. “Why can’t we be part of that next success story?”
Manufacturers Trying to Find Their Niche in Oil Industry - The Grand Forks Herald