Welcome to the oilfield lumber yard: Steffes Corp. increases sales 400 percent in 4 years
Ten years ago, Steffes Corp. focused on making snowmobile skis, hopper bottom storage bins and furniture frames. Now the business manufactures just about anything needed for oil production.
“We’ve consistently had a philosophy that we have to reinvent ourselves every five years because the only thing you know for certain is that there will be change,” Steffes CEO Paul Steffes said. “Basically everything on the oil side — except for the pump — is some of the things we are making for the Bakken.”
The Dickinson manufacturer has been changing since it opened its doors in the 1940s. With the exception of snowmobile skis, Steffes makes everything it always has while adding other items to its assembly lines.
The bulk of demand comes from the oilfield, said Joe Rothschiller, chief operating officer and president.
“As Paul said, can we be a site-solution provider?” Rothschiller said. “What on that site that is made out of metal can Steffes provide for you?”
Steffes first started producing oilfield tanks in 2007. The company became a leader in tank production, pumping out 33 tanks a week. Steffes said that is 20 percent of the company’s business.
But requests didn’t stop there, Rothschiller said. Oil companies began to ask for a flare system, one that would burn “very clean” and met Environmental Protection Agency requirements, Rothschiller said. Steffes had the solution.
The business engineered a system that would limit the amount of natural gas flared. The annular orifice controls the mixture of air with gas and emits smoke-free combustions.
Another request was the heater treater systems. Standing at six feet in diameter and 20 feet tall, the system effectivly separates oil, water and gas, Steffes said. It took companies two weeks to put the plumbing manifold together on-site. Now the manufacturer assembles the heater treat system, and it can be up and running at the oil pad within a day.
“We even got into building … cattle guards out front,” Rothschiller said. “We have to build a cattle guard that can take a pounding for 2,000 trucks.”
Steffes, however, does not restrict itself to oilfield manufacturing.
One product it has focused on in the last 25 years is it electric thermal storage for space heating. An ETS contains heating elements that are capable of storing large amounts of heat. The company has 13 pilots across North America, Steffes said.
The manufacturer also makes components for Bobcat, including steel frames for the cab cages.
“We just continued to listen,” Rothschiller said. “Tell us what your problems are, let us help you solve them.”
With a growth of demand comes a growth of expansion. The company experienced “a down year” in 2009 when it had 116 employees, Steffes said. But the next year brought huge jumps in business, Rothschiller said.
“We happen to be in transition at that time of building a warehouse on our north facility because we were already renting 20,000 square feet in town,” Rothschiller said. “It was time to move north. If you went to that warehouse today you would see it is not a warehouse. It is a completely refabricated, craned-up manufacturing facility for oilfield products.”
Steffes made $400,000 in expansions in 2011, which includes welders, fixtures, cranes and painted booths. It also purchased 60,000 square feet west of Grand Forks in 2011 to help produce material for the oilfield.
“We knew we needed to get outside of the Bakken in order to grow at the rate that we were seeing in front of us,” Rothschiller said. “And we will continue that.”
The company has also become a landlord, Rothschiller said. It owns three manufactured homes and a house for employee use.
Today, Steffes has almost 300 employees that work between the two facilities. Rothschiller expects to add 20 to 40 employees in 2014.
“Since 2009 to the close of 2013, we have grown 400 percent in sales,” Rothschiller said.
Steffes may not know what requests will come next, but it will be ready to adapt to the ever-changing business, Steffes said.
“You always underestimate your long-term goals. You always overestimate your short-term goals,” Steffes said. “We’ve grown to a point that we didn’t conceive 15 years ago.”