Canadian Rental Service

Features Profiles
Riding the boom

According to Tony Canevaro, director of service and marketing for Calgary, Alta.-based Cameron Equipment Rentals, growing a startup company from nothing into a four-location operation


September 21, 2012
By Patrick Flannery


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According to Tony Canevaro, director of service and marketing for Calgary, Alta.-based Cameron Equipment Rentals, growing a startup company from nothing into a four-location operation with three distinct operating divisions and equipment inventory in the tens of millions in a year has been simple. “We have built our reputation on doing things other people think cannot be done,” Canevaro says.

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Infra-red heaters are a popular item for Cameron’s commercial construction customers. From left to right, Tony Canevaro, Lance Brucklmyer, Jamie Pierce, Derek Seymour and Ali Borhot.


 

As a business plan, it is hard to beat. Where others turn away, you grasp the opportunity and find ways to go forward. Cameron has to come to the table with more than just an outstanding inventory of earth moving equipment, 400 barrel tanks, rig and swamp mats, temporary heat, temporary shelters and on-site fueling solutions. Canevaro leverages one of the principals’, John Cameron’s, long list of relationships in the business with a commitment to total “yes we can” service to grab the work others miss. With these tools, Cameron has been able to generate landslide success in places like Fort McMurray, Alta., where other rental operators might throw up their hands at the challenges and demands.

Cameron Equipment Rentals is only a year old, but John Cameron and Kent Peters, the founders and principals of the company, have assembled a team with much more experience than that. Canevaro’s experience spans Dry Air Industries, Innovative Climate Solutions and Western One. Larry Flunder was also brought aboard as a key member of the management team. He brought 31 years in sales and marketing in and around the Alberta area, including 19 of years running his own commercial retail stores in southern Alberta and B.C. and 12 years in sales and rentals in the commercial and energy sectors of  Alberta, Saskatchewan, and the Northwest Territories. He was joined by Randy Wilson, an old friend of Cameron’s with 25 years in the oil and gas industry, mainly on the earthworks end of things. Wilson started as an operator then moved to foreman and supervisor working on road and lease construction, pipeline and facility construction, and also residential water and sewers.

Strategy
The company was formed when John Cameron and Kent Peters joined forces to create a rental company that initially focused on heavy equipment. This was due to the natural fit with Cameron Construction Services, owned by John Cameron, as it is a full service building and earthworks construction company. Cameron Equipment was able to bring Canevaro and Flunder into the fold to drive a temporary heat and power business and diversify the company. “From an investment perspective, the idea of being able to create revenue from the same capital asset over and over is pretty attractive,” Canevaro says. Canevaro and Flunder’s background and connections  coupled with the high ROI on temporary heating equipment, got the attention of Cameron and Peters. They came up with a strategy to create a blended fleet of energy services rentals (heavy equipment, rig mats, tanks and temporary buildings) combined with contractor rentals including everything from reach equipment to climate control and hand tools. At this point, they brought in Wilson, who had extensive experience and contacts in this space. At the end of the day, this structure makes the ROI on the equipment inventory sheet look very solid because the contractor rentals benefit from the higher dollar amounts of the oil and gas rentals, and the oil and gas rentals benefit from the high-margin cash flow of the contractor rentals. The heavy equipment and energy service rentals place a firm foundation of steady cash flow under the whole operation because Cameron’s relationships in that field guarantee some big-ticket, long-term contracts. That is helpful in case the more volatile contractor market takes a wobble.

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Temporary heat rentals to Calgary commercial construction projects is a major part of Cameron’s business.


 

Cameron Equipment Rentals employs 16 full-time workers. Peters  and Cameron direct the overall strategic direction of the company, along with finance, acquisitions, and referring people in their network for potential business. Wilson is the director of sales for the heavy equipment and oil field rentals, while Canevaro and Flunder deal with the contractor (heat and power) side.

Cameron Equipment has three locations across Alberta and one in Saskatchewan. The main office and headquarters for the contractor operations is in Calgary. Heavy equipment and energy service rentals are stationed in Winfield, Alta. There are two sales offices without fleet, one in Estevan, Sask., and the other in Fort McMurray. And Cameron works through a sales affiliate in Wainwright, Alta., that also holds consignment fleet. Winfield is the largest location with the most land where Cameron Equipment Rentals keeps most of its fleet and takes overflow from Calgary.

The company’s rapid growth has created something of a scramble to find space. Canevaro is looking forward to the extra room the new arrangement in Wainwright will give him. “We are very excited about it,” he says. “We are not a retail rental house at this point in the game. We do not currently deal with residential rentals or homeowner rentals or even small subcontractor rentals. It is not our model. So we have no storefront at this time. We have offices, shop and yard where we are, and within about 30 days of our moving in we had outgrown that space. So we finally found about an acre of yard space and about four times the amount of shop, warehouse and office space. We are going from about 1,000 square feet of office to about 3,200 square feet of office and about 6,500 square feet of shop, warehouse and a nice drive-through yard. So everybody feels much better at this point.”

The challenges of the north
Having an established presence in the Fort McMurray oil fields is not something Canevaro feels just any rental operator could do. “The safety requirements you have to achieve to even be considered a supplier are pretty onerous, to be honest,” he says.  “For most traditional rental houses, especially a smaller Mom-and-Pop type, they just would not do it. I almost need a full-time person just shuffling paperwork for safety.” The learning curve on the northern safety requirements has been another challenge, but Canevaro feels he has made the right moves to address it. “We hired a man who is an older gentleman who has spent the better part of his working life in Arctic camps on remote jobsites, and also a journeyman millwright who understands how things have to work and if you have to spend an hour in the morning and an hour in the evening on paperwork, that is just part of the job.”

The safety regulations may be tough, but Canevaro says the booming market in the area makes it all worthwhile. “The thing you need to know about Fort McMurray is, it is a very simple mantra, he who has the equipment wins the deal. There is an extreme equipment shortage out here right now. Price is always a consideration, but availability and your ability to provide secondary services is what wins you contracts.”

The strength of the oil field rental markets has not escaped the notice of the bigger players in the industry, and Canevaro admits those players have sewn up the largest contracts for many job sites. But Cameron Equipment Rentals has been able to find growth in the niches they do not serve. “We will do things like package together a large fabric building and as part of that package we will supply the temporary heating rentals, the power generation rentals and the ventilation fans to complement that structure,” he explains. “So we are not always in a competitive environment with the larger players that have contracts for that jobsite. We are kind of working in parallel with them.”

Canevaro says one of the company’s significant strengths is its ability to react quickly to whatever the market demands. “Because we are nimble, it allows us to move and change,” he says. “We went from zero on August 9 of last year to having a significant amount of heavy equipment fleet to having camps we rent, trailers, 400-barrel tanks, rig and swamp mats, temporary heating equipment and aerial gear. They employ iPads, mobile ticketing, Point-of-Rental Systems software and the skills of office manager, Evelyn Hickey, to keep everything organized.

Cameron Equipment Rentals shines brightest when it comes to reacting strongly to market and customer demands. Canevaro says most of the company’s fleet was simply evolved by getting whatever clients were asking for. He has used the organization’s agility and ready access to capital to wait until customers demand something before moving to pick it up, which has avoided expensive miscalculations on fleet size and composition.

But the true innovation has been Cameron Equipment Rentals ability to offer full-spectrum solutions.  “Everyone talks about customer service and, frankly, that to me has become such a vanilla statement in today’s day and age,” Canevaro says. “Everyone expects your equipment is going to come out in good condition and it is going to work and if it breaks you are going to come and fix it. To me, that is not the definition of good service any more. That might have been the case 10 years ago, but not any more. So we provide very complete, turn-key services. We rent operators, we rent manpower, we do site monitoring for our clients, temperature control systems complete with remote access and log-in from databases and tracking. All those sorts of value-added services where our customers really look to us as a subcontractor or a real, valued partner.” Cameron Equipment Rentals takes this commitment to serving the customer all the way to a level rarely seen by supplying staff to run the equipment it rents, if that is what the customer needs. “If we are talking about heavy equipment we have a group of subcontractors we can access. Top-shelf, good quality operators who can operate heavy equipment for the client. For example, we had a very large project with an oil sands company in Fort McMurray where we supplied all the temporary heating and HVAC for the project, but they also wanted us to supply 24-hour monitoring and supervision of the heating equipment, so we did that.” In a region where skilled labour is in desperately short supply, it is not hard to see how Cameron Equipment Rentals’ ability to provide such services would be in very high demand.

Canevaro has another example of the company’s comprehensive services. “We do ground thaw work where we give the client a package price,” he explains. “If there is five feet of frost over this many square feet, this is what it is going to cost you to thaw it. Then we take care of everything. We take care of diesel fuel delivery because we have a brand new 10,000-litre diesel truck. We supply the power, the heating equipment, the propane, the tarps, the labour to put it all down, to pick it all up and so forth. The customers we work with love that. There are no surprises, this is my cost to get the job done.”

Caught up in the frantic pace of the last year’s growth rush, Cameron Equipment Rentals is now focusing on ensuring the premises and support staff are in place to continue this journey. They are looking for ways to keep improving and focusing on efficiency. Everything from safety, human resources, administration and service practices is being reviewed to ensure that it can remain nimble without dropping the ball as it grows its customer base and operations.

For the future, Cameron Equipment Rentals will focus on expanding the equipment inventory in its three divisions in the short term and will turn its eye towards acquisitions in 2013. Cameron and Peters would like to see the company be a major player in the western Canadian rental market within three to five years. Clients have been asking Canevaro to do business in the Lower Mainland of B.C. and as far east as Sudbury, Ont. “We will go where the opportunities are,” Canevaro says. So far, Cameron Equipment Rentals has shown a remarkable proficiency at doing just that.