Estevan– A focus on customer service and a change in the marketplace has created sales numbers for Sterling Chemicals over the past few years that most companies in the oilpatch, or anywhere for that matter, can only dream of.
Sterling Chemicals Ltd. is located in Estevan, with a satellite in Carnduff. Its parent company is Camber Resource Services Ltd., and its sister company is Camber Technology Corporation (CTC), based in Edmonton.
Sterling had been a long-established but small operation in Estevan, operating since 1986, according to Bill Matheson, president and CEO. He’s also one of four co-founders of Camber, which is privately held with about 50 investors. Matheson comes from the exploration and production side of the business, having run two companies of that variety. He spoke to Pipeline News in Estevan on Aug. 2.
Camber was founded in 2011, and bought Sterling in December 2012.
“Sterling’s been part of Estevan since the 1980s. It was started by Arnold Scott of Estevan,” Matheson said. The company had tried to grow, but with limited success, and had remained a two- to three-man operation. Matheson and his partners made the offer to purchase in 2012, when the oilpatch was booming.
“That was $110 oil, for sure. The oilpatch was rocking,” he said.
Sterling, in its limited market, was very well-regarded, according to Matheson. Blaine Fallis, general manager, who has been with the company for decades, “has an exceptional reputation,” he added, but the company had stayed small.
Another company in the market, long-established and local, Prairie Petro Chem, was purchased by Clariant around 2011, adding the weight of a multi-national company behind a company with a great reputation.
Matheson is all for competition, adding, “The one thing little guys must bring to the table over and over is service. Sterling has always been known for service, as well.”
“Little guys like us, we base our business on service. We develop product as well as any of the big guys, just not as much of it. For the first 27 years Sterling was around, they knew how to treat wells to make sure they kept flowing, and exceptionally well. Blaine had a great track record. There were formulas that had been developed over 27 years”.
“When we bought the company in 2012, we wanted to establish the why. Why does this work? Only by establishing the why can you scale it up,” he said.
That’s where CTC comes into play. Its business is to provide solutions for Sterling Chemicals. Camber’s head of technology and engineering was familiar with The National Institute for Nanotechnology (NINT) at the University of Alberta. In 2013 Camber opened its laboratory at NINT and now employs three full time scientists and 2 technologists, as well as two senior technical managers in the field. CTC focuses its research and development on solving oilfield problems including treatment and prevention of corrosion, scaling, paraffin, emulsions and polymer applications.
NINT is a joint venture between the National Research Council, Government of Alberta, and University of Alberta. It has four floors of labs, with cutting edge equipment. CTC has access to all of it at a “friends and family” rate.
“We also work with different companies on various studies,” Matheson said. At any given time there will be one or two PhDs working with the Camber team as part of a funded study.
“We see Camber Technology Corporation as the future of our company, the place we’re going to bring on better and less expensive products,” Matheson said.
Strong growth in down times
The numbers Sterling has posted in recent years would have been envious in boom times, never mind during a downturn.
Matheson said, “We’ve grown more in the past year than any year prior to that.”
In 2013, their first full year of operations under the Camber umbrella, revenue grew around 20 per cent. In 2014, that number was 55 per cent. The next year, it was again 55 per cent revenue growth. So far in 2016, the number is approximately 60 per cent.
Where is that coming from?
“We’re stealing market share,” he responded. “From 2012 to 2016, we’ve increased our market share in SE Saskatchewan sevenfold by focusing on service and technical excellence.”
Customer service and better products are two reasons for the growth, he explained. “Everybody in the specialty production chemical business has corrosion inhibitors, demulsifiers, paraffin inhibitors… We have an infinite number because we develop a product for them (the customers).”
That means Sterling employees aren’t afraid to “get in the mud” with their customers.
“My job, Camber’s job, is to make the field operator’s day easier. If I can make Sterling’s job easier they will make the field operator’s day easier.”
Future expansion
There are realistic limits to how much one chemical company can grow in a region like southeast Saskatchewan and southwest Manitoba. They’ve already lined up visas for a couple of their people to work in North Dakota. “Where we can attract the best talent, we’ll go there next,” he said. “After Saskatchewan, Manitoba and North Dakota, we’ll go back into Alberta.”
Matheson doesn’t want to get too large, however.
“I don’t want to have more than 100 people, but I think we can take over the world with 100 people by being scientifically perfect and providing customer service.”
While sectors like drilling are greatly affected by the downturn, production still needs to be maintained. “Our sector, production chemicals, is healthy. Although we’ve had to give up some margin, our ability to do business is better than it’s ever been,” Matheson said, adding that at some time in the life of every well, chemical intervention is needed.
The growth of horizontal wells means more and more access to the reservoir, and therefore a need for more chemicals. Longer well legs means more contact area. “This is the new reality,” he said.
Marketing differently
Sterling and Camber’s marketing strategy is more community focused than what might have been seen in the sector in the past. “We focus on the community and how to help kids in the community,” Matheson said.
In Alberta they run a golf tournament for kids, raising approximately $80,000 in the last two years for children’s charities. They took part here with the Don Narcisse football camp, as well as food hampers for less fortunate citizens of southeast Saskatchewan.
“That’s how we market our company. Sterling is here to help the community in good times and in bad times. It’s a core value with the entire team that we contribute to the community first.”
