Potential on Tap: Supplying to Major Projects

These are exciting times for entrepreneurs in Newfoundland and Labrador. You’ve probably heard this before but I’ll say it again, the economy is BOOMING. You can thank all of those oil and gas, mining and hydroelectric projects that are in development around the province for this. Even better, it looks like this boom is set to continue well into the future! The time has never been better if you’ve been thinking about diversifying or starting a business of your own.

These projects can be summed up in one word: massive. They have huge skilled labour and material requirements, not to mention everything that goes into them before they even start construction. Because of this, to some, the thought of doing business with these major projects seems unattainable. They are just too big or you don’t think they need what your business has to offer. As with any business venture, the path is never easy but when you look at doing business within these industries you might be surprised to find that the potential for business opportunities is also huge.

What you have to keep in mind is developing your understanding of this market! Understand what a project needs, who the key players are and who you’ll need to know in order to do business with these industries. Being knowledgeable is half the battle.

1. Understand what the project needs.

Think about this in terms of materials, services, and labour.

  1. Materials
    When I think about major industrial projects, the first thing I think about is all the steel products that are used. But the materials needed entail more than just the literal nuts and bolts. Projects need everything from concrete or steel products, to cleaning products, to the styrofoam cups that are used by the coffee station.
  2. Services
    Who doesn’t need a service from time to time? The major projects are no different. They require everything from unique consulting services, to health and safety training, to professional development services.
  3. Labour
    Keeping with the trend, labour is another one of those needs that is just as massive as the project itself. Major projects require skilled labourers like pipe fitters, engineers, electricians and heavy equipment operators. However, projects such as these need more than just skilled labour for the construction and engineering. Look beyond the construction phase and you’ll find that they also need individuals to staff their kitchens, housekeeping for camps and janitorial personnel.

2. Understand who the players are.

These industries have a tiered structure. Understanding how to navigate this kind of supply chain and how you can fit is crucial.

The best way to explain this is by giving you an example. Take for instance the Hebron offshore oil and gas project. ExxonMobil is the project operator who finances the development of the project. However, instead of doing all the work needed for this huge project themselves they contract out work to be completed by subcontractors with expertise such as WorleyParsons and Kiewit-Kvaerner Contractors (KKC). These subcontractors then have more subcontractors and those subcontractors will have more subcontractors beyond that. The work contracted out originally, as it goes down the line, will be broken off into smaller more manageable parts so that companies who for example may specialize in producing a certain kind of bolt or a company who produces promotional mugs will end up supplying to that project.

By knowing who the key players are you’ll also be setting yourself up to take advantage of spinoff opportunities like supplying to a catering business that just received a contract to cater regular meetings for a project. These spinoff opportunities have immediate results but have the potential to span beyond the life one project and into the future.

3. Understand who you need to contact.

When placed in a position where you have the ability to network you need to think of it strategically so that you can optimize your success. If you were in a room with the CEO, a procurement official, or an office manager and only had time to speak to one of them, who would you speak to? Each person available to you absolutely has something of value to add, however depending on your product or service it may be more pertinent to make a connection with one person more than another. The most important person to connect with in the room may not be the obvious choice.

Having put the major projects in the context of understanding project needs, key players and who to contact, I challenge you to think about how this is any different than beginning other business ventures. There’s tons of potential for success – go for it!

Melissa_FieldMelissa Field is the Industry Liaison with NLOWE.  If you have any questions regarding supplying to major projects or are interested in learning more about NLOWE’s Exploration Series, a four-part series designed to provide relevant information to women business owners regarding supplying to major projects, you can contact her by phone: 709-754-5555 ext. 224, toll-free: 1-888-NLOWE-11, or by email: mfield@nlowe.org

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