This chemical pump exporter relies on brains, not size

[Figure 1]

Not many hockey fans can match the drive of Darren Preece, who's cheered for the Boston Bruins since he was a kid, perched on his dad's knee in front of the family television. "Our company is named after the team," says the president of Bruin Instruments Corp. With a staff of about two dozen, Bruin itself is no larger than a hockey team. Despite its peewee size, though, the chemical injection pump manufacturer is moving aggressively to sell its equipment across the United States and around the world.

Its 12,500-square-foot facility is located in Sherwood Park, Alta., where Preece grew up. "In western Canada, we've competed through making constant improvements to our pumps, and now we're applying that same capability to other markets," the 49-year-old entrepreneur says. "We were the first guys out with a low-pressure pump that's specifically designed for shale gas. A typical pump operates at an inlet pressure of 35 psi [pounds per square inch]. This model works as low as 2 psi without sacrificing durability."

Bruin has also come up with a low-volume chemical pump that can feed just cubic centimetres per day into the wellbore. "Many pumps are hard to adjust for really low volumes," Preece explains. "Chemicals are very expensive and a pump in the field operates 24 hours a day. By reducing the injection of unnecessary chemical, the low-volume model in our 5100 series can reduce an operator's costs."

Beyond entirely new products, Bruin takes pride in making dozens of small but cumulatively significant improvements. For instance, nitriting main rods improve their durability. A priming valve can be shaped so it won't inadvertently catch on the coveralls of a passing worker. Or suppose a pump diaphragm breaches-natural gas will then leak into the structure housing the pump. In response, Bruin provides a connection that permits the operator to easily attach an exterior venting tube to the pump.

Then there's the plastic lid. "We found that operators would remove the steel lid over a chemical pump's mechanism to see what was happening in there. Then the lid would often be left off because screwing and unscrewing it is a nuisance," the company president says. "Of course, it's better to leave the lid on. So our pumps feature a clear plastic lid-the operator can see the mechanism and liquid flow without removing the lid."

Looking to the future, Preece says, "The big trend is solar. Any pump that burns wellhead gases will release emissions, so producers are turning to solar power as an environmentally superior alternative." In response, Bruin has nearly completed a "cool little controller" that combines the control and regulation functions in a single device. Its features include simplicity, ruggedness, lower cost, and finely tuned electricity flow from solar panel to pump batteries.

Well-established in the West, Preece thinks his firm is ready to take on dozens of competitors in the international arena. Teamwork is a passion for this hockey enthusiast. On display at the Bruin plant are a Boston hockey jersey and other paraphernalia signed by the best-known Bruin of all time, defenceman Bobby Orr. "As a teenager, I got a try out with the Victoria Cougars, which made me realize that professional hockey wasn't for me," he says. "I heard the oilpatch paid the best money around here, so I got a job driving a truck for a local oil and gas industrial supply store."

The young contender had found his game. Working for Bishop, Turbo, and Vonco in oilfield distribution, Preece quickly rose to manager, opening a store in Bonnyvville, Alta. Ironically, his most educational experience in service and supply came from working for an actual producer. "BP hired me as an operator at its cyclic steam bitumen project [near Cold Lake, Alta.]. I read gauges, I twisted wrenches, but most of all I learned how buying power is distributed from the field to head office," the Bruin CEO says. "Until then, I'd focused on purchasing agents. BP was a huge eye opener."

In 1990, not yet 30 years old, Preece launched Bruin, selling his home to raise capital. The fledgling firm repaired valves, switches, various types of pumps, and more. "There's a vast amount of instrumentation products and we went for pretty much all of it," the entrepreneur says. "Gas prices were very low at that time and everyone was grinding each other down on price. Margins were terrible. I was on the road myself for five or six years, almost to the point of burning out, but we survived."

As times got better, Bruin persistently accumulated cash reserves. "Getting started in a downturn made us careful, which turned out to be a good thing," Preece says. Due to its strong balance sheet, the company coped well with the energy sector slowdown of the last couple of years. Meanwhile, several competitors in Western Canada have shut their doors. "Those companies began when making money was easy and the owners bought the big fancy trucks and so on," the Bruin founder says. "Everyone learns sooner or later that this industry is cyclical."

Years of repair experience taught Bruin the limitations of existing pumps and sparked ideas for improvements. Preece persuaded an American-based manufacturer to make a raw gas-fuelled, CSA-approved "trash" pump capable of dealing with solids-contaminated liquids. "We got the western Canadian sales rights, which was fine as far as it went," he says. "But the real money was made by the manufacturer, who still sells that model internationally."

To get into manufacturing, the Alberta company needed more bench strength. Two executives were recruited from a far larger competitor, using the classic lures of partnership and promotion. Since 1998, Darrell Hughes has handled Bruin's marketing while Ken Shapka came on board in 2000 as a design-oriented engineer. "Our manufacturing and repair operations now account for about 80 per cent of our revenue. We also sell American pumps that complement our own models," Preece says.

International sales presently generate nearly 15 per cent of revenue, a figure that has grown annually for the past five years. To boost its foreign income further, the company naturally looks south of the border. Its full line of pumps will soon be carried by an oilfield supply house with 14 stores that serve oil and gas producing regions in the United States. "We're now training their people on sales and repair, which takes time," Preece says.

Hughes, who heads Bruin's overseas marketing push, says it usually takes two to five years to develop a new foreign market. "You need plenty of time to train a good agent or representative and get your name known," says the Bruin sales manager. Besides coming up with customers, a good agent will help create effective sales materials, provide reliable after-sales service, and make valuable suggestions on how to adapt a pump design for his market.

Independent producers, including Canadian operators, are increasing their activities in many foreign oilpatches, as are oil and gas service providers. (The independents generally follow in the wake of multinationals like Exxon and Shell, who leave a region once its potential for elephant oil and gas discoveries has been exhausted.) "North American companies know our products are reliable and that's a big help for us overseas," Hughes says. "But these companies are demanding. In many markets, delivery times have shrunk from many months to a few weeks."

Some of Bruin's competitors have laid off the engineering and marketing specialists who previously handled export business. "The economic downturn of the last couple of years has led to cutbacks, which provides us with opportunities," Hughes comments. "We've made a long-term commitment to our international business." Foreign cash flow, although difficult to get started, tends to be stable, precisely because lining up a new supplier takes so much time and expense. Equally attractive, foreign oil and gas activity is often less violently cyclical than the North American petroleum sector.

When it comes to foreign markets, Preece says he's not especially concerned about his company's lack of size. Sheer quantity, in his view, counts for much less than having motivated, well-trained people who know how to identify and exploit opportunities. "Can your team deliver leading-edge products at a competitive price?" queries the Bruin CEO. "If the answer is yes, you can find your niches. Wherever oil and gas are produced, the door is open."