In 2017, the owners of Silver Valley-based Ritchie Bros. Construction decided to wind down their business and retire after operating the earthmoving and road lease construction business for close to 40 years. Big-ticket equipment, including compactors, dump trucks, dozers, trucks, and trailers were sold in the auction market. Although much of the equipment used in the business were snapped up at auction, there was enough tools and equipment left – not to mention skilled employees, some of whom have worked for Ritchie Bros. Construction for decades – to start a new business. Silver Valley Mechanical Ltd was born.
Greg Heinricks was one of the long-time employees of Ritchie Bros. Construction, having worked in the company for about 20 years. He now manages Silver Valley Mechanical. We sat down with Heinricks and asked him about how Silver Valley Mechnical has fared so far since it began in January 2018.
Question: Could you cite a scenario that demonstrates well how Silver Valley Mechanical has answered the need of a customer?
Answer: There’s a 1977 – yes, it’s 41 years old – Ford grain truck on our shop floor right now. There were a few issues with it, but the clutch is the main one. The clutch will not shift very good anymore. We took it apart, put in a new clutch and got it working again. You see, in this case, the real challenge is not the job itself; rather, it is in finding the part, which, in this case, is the clutch. For some of the older equipment, sourcing for parts is really hard. I phoned around to our contacts, and we’re lucky we found exactly what we need. Now that it’s harvest time, everything is time-sensitive.
The efficiency in our sourcing method determines how quickly we can get customers in and out of our shop. For the most part, I think our timing is fairly good, meaning, our customers come in and out a little quicker. Not that we don’t have issues with some things being in too long. If we can get the parts here quickly, we can get customers in and out also fairly quickly.
There’s also a truck used in the oilfield that’s sitting in our shop. The truck is due for a commercial inspection, but we are getting its brake components fixed before we carry out the inspection. We are a licensed inspection facility for commercial vehicles. And, in this case, we also provide pre-inspection mechanical troubleshooting for a customer.
Who are your customers, and where are they from?
Most of our customers are fairly local, within 70-80km radius from us. For our local customers, it’s very convenient for them to have equipment that otherwise could not be easily taken to the nearest town centers in Grande Prairie or Dawson Creek – for example, tractors or haying equipment – brought to us to be worked on. Our out-of-area customers are mostly those who have come to the area for work and who happen to be needing some kind of mechanical repair. I would say that approximately 40% of our business so far is generated directly or indirectly by the oil-and-gas industry. The remaining 50-60% is accounted for by agriculture.
How are you dealing with some of the challenges in your day-to-day operation?
Our biggest challenge has been sourcing for parts and logistics, getting the parts in our shop from our suppliers within Canada or in the US. We have a few dealers that come out to us on Mondays, Tuesdays and Fridays. But we also make the needed trips in between those days to source for parts.
There is a lot of government regulation involved in your line of business. How tough is it to comply with government regulations?
We were already doing inspections before but only with respect to the fleet of Ritchie Bros. Construction. We obviously need to jump through a few hoops when we decided to do commercial inspections as a line of business. Our facility as well as our technicians are certified to do commercial inspections.
Your business relies on technical expertise to be competitive. Has manpower ever been an issue?
So far we haven’t had any problem. We’ve been very lucky. One of our technicians came to us two months ago from Lethbridge. He had a relative up here, likes to hunt, and plans to move up here anyway. He is certified to do the inspections, so it just works out pretty well for what we needed.
Where do you plan to take the business in, say, the next five years?
As you can see, our shop is full. We have been very fortunate that we haven’t had any downtime really since we started in January. Our shop is full, and there’s more that wanted to come, but we do not have more room in our facility right now. For now, we will see how our business unfolds and adjust as needed. We thank the community for the support they have shown us since we started.