Piping and Equipment Co.
Building heavy industrial plants for a variety of industries – such as petroleum refining, power generation, railcar loading and chemical processing – requires a high degree of experience, training and quality control. That is the level of work that Piping and Equipment Co. Inc. has been providing to its customers for 68 years.
“The three officers combined have over 120 years with Piping and Equipment,” President Tim Farnham declares. “Not just 120 years in the industry, but specifically 120 years with Piping and Equipment, and of those three, I have the least experience.”
In 2003, CEO John Wadsworth bought the company from Farnham and his two partners; his brother, Senior Vice President Art Farnham, and CFO Sue Pearce. “The management has been pretty consistent throughout these years,” Tim Farnham adds. “No employees left when the ownership changed. We just added a little more depth, dimension and opportunity for growth.”
Piping and Equipment Co. Inc. provides services such as process piping, structural steel and pressure vessel fabrication, skid units and instrumentation. Its competitive advantage has always been its quality. “I think that we bring value to our customer, not necessarily in the low price, but in the fact that we provide a very high-quality, very safe workforce, and statistically considerably better than the average construction company,” Farnham asserts.
Safety and Quality
The company recently celebrated completing 1 million man-hours without a lost-time accident and has a weld failure rate of approximately 1 percent. Its shop supervisor is a certified welding inspector (CWI). “We currently have five CWIs in the company,” Farnham says. “Typically, when we go out on a job, instead of just having someone who’s essentially recording information, we have certified welding inspectors who can actually support our work and ensure that our customers are getting a quality product.
“If you can’t bring value to your customer, then you’re nothing more than a commodity,” Farnham continues. “Once we get a customer brought on, they’re a long-term customer. We’re not in the business of short-term or one-time customers. So many of the places we’ve worked, we’ve worked there as long as I’ve been with P&E.” Farnham, who has worked at Piping and Equipment Co. since the 1970s,estimates that more than 90 percent of its projects are repeat business.
“There are a few new clients a year that we go after and try to bring in, but when you’ve been in business for 68 years, you’ve worked for a lot of people and a lot of them come back,” Farnham maintains. “We have gone through name changes with our clients, but no name changes here at Piping and Equipment Co.”
Bakken Business
Piping and Equipment Co.’s revenue got a boost in 2013 from its construction of several crude-oil-to-rail facilities in the Bakken Shale region of North Dakota. These facilities can unload 100 railcars filled with crude oil at the same time into holding tanks and then into trucks for transport to refineries.
“We actually got involved in crude-to-rail about three years ago up in the Bakken region,” Farnham says. “We’ve been involved in three or four different projects up there. We’ve been working continuously for one customer and been associated on a smaller basis with a couple others; then we built another complete facility for another customer. It’s fueled a lot of growth for our company and has been a significant boom in the last couple years up there. I’m not sure that’s a continuing thing in the Bakken, but there are definitely other parts of the country that are having similar types of projects. We’ve been looking at other projects and having conversations in Utah, Wyoming and Texas about doing similar things to what we’ve done in North Dakota.”
No matter where the company’s projects are located, a strong competitive advantage for Piping and Equipment Co. is having its own steel fabrication shop. “We’re not waiting on someone else’s schedule,” Farnham points out. “The customer is not paying for us to buy components and mark them up – they are getting the direct cost. But the key is really controlling the project, and in the case of these crude-to-rail projects, getting them up and running quickly is of the essence. Our success there has been by providing an integrated project involving the engineer, the other contractors and the owners all in the beginning. We spend a lot less time getting the project done.”
Farnham estimates that the crude-to-rail projects have been completed usually in nine months to a year from the time they receive the go-ahead. “Our specialty is giving our customers what they want or need,” Farnham concludes. “We do so many different things that we aren’t tied to one specific specialty. I think what we bring to our customers is unique and based on what each specific customer and project requires.”