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Winter 2009

www.canadianexecutivejournal.com

APPALACHIAN PIPELINE, LLP Any Terrain, Anywhere

THE MAGAZINE FOR ENERGY & POWER EXECUTIVES


Appalachian Pipeline, LLP Any Terrain, Anywhere Written by Shelley Seyler & Produced by Brandon Roberts “From the frozen north of Alaska to the bush country of West Africa, this management team has overcome unprecedented obstacles to successfully complete pipeline projects to the satisfaction of our clients.” This describes the experience of Appalachian Pipeline, LLC and its principals. Founded in April 2003 and headquartered in Hendersonville, Tennessee, Appalachian Pipeline grosses an impressive $40 million in annual revenue with eight full-time employees. As a national pipeline contractor, the company is currently working on projects in Mobile, Alabama and Fort Lauderdale, Florida. Their reach stretches even wider having worked in Sakhalin Island, Russia. Though a relatively new company, the leaders of Appalachian Pipeline have a combined experience of 140 years in the industry. “From the frozen north to the swamps of the south and from the mountains of the west to the metropolitan areas of the east,” Appalachian has worked across tough and diverse terrain around the country.

Some Examples In 2008, Appalachian completed approximately 29,000 feet of new refined products P/L for South Florida Materials Corp, a subsidiary of Vecenergy in Florida. Also in 2008, the company laid 18.72 miles of 36-inch OD New Natural Gas P/L for Bay Gas Storage in Alabama. In Mississippi and Tennessee, Appalachian served Columbia Gas Transmission by completing 24-inch and 30-inch anomaly replacement; and this was just 2008.

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Their Strategy “When we are in the ‘bid phase’ for construction projects, we have superintendents, engineers, accountants and upper level managers who work shoulder to shoulder to produce our bid proposals,” said Bobby Crotts, President of the company. Since 1989, Bobby has served the positions vice president or president of major pipeline construction companies. With 40 years of experience in the pipeline construction industry he has acted as laborer, surveyor, estimator, project engineer, project manager, and general manager, with international project experience in West Africa and the Middle East.

The company is strategic in their bidding and construction schedules. They typically bid and win their projects early in the season, from January through March, and execute the contracts from April through December. As they are awarded projects, the superintendents, engineers, and accountants who worked on the bids are transferred to their field for project management. “This plan has made us very efficient and profitable,” said Bobby. Appalachian’s diverse staff is capable of performing the unique tasks their industry requires. The company recruits staff through college and university programs within their region, tracking “certain students who display a potential for recruitment,” said Bobby.

Power Associates International, Inc. was established in 1978, with the primary purpose of building and servicing hydrostatic testing equipment for the pipeline industry. We are proud of our association with the industry and our commitment to the highest quality services. Customers and friends like Bobby and Jimmy Crotts at Appalachian Pipeline Contractors have made it possible for us to celebrate our 30th anniversary in 2008. We look forward to working with them in the future.

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Young graduates begin their tenure with the company at their headquarters under the apprenticeship of senior managers, mid-level managers, superintendents, and senior engineers who work with the new graduates to educate them on their company’s business model. The new hires are then dispatched to new job sites where they can see first hand how the company performs each project and what is required for equipment, craft workers, and staff to make sure a project runs smoothly. Experienced foreman, superintendents and project managers are recruited from within the industry. Senior mangers and owners work with these new recruits to ensure they understand the company’s philosophy and expectations are met.

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Investing this much time and energy in each staff member gives Appalachian even more incentive to retain their employees; and retain they do: “[By] making each employee feel like they are part of the plan for the success of the company,” said Bobby. “Most of the people that we lose move on to other companies that recognize the quality of the employees we build.” Appalachian also has a core group of suppliers and contractors they can turn to who understand the requirements of the industry and their particular business. The company has specialists for select aspects of the work, such as horizontal directional drilling or intelligent pigging. APC outsources 90 percent of their heavy hauling, or transportation, requirements. Appalachian then handles distribution of materials and equipment on site with their craft and company equipment. To manage their IT requirements, Appalachian has an in house IT supervisor but also retains a third party consultant. The company has employed various computer-aided processes to better the communication with their clients. They communicate mostly through email and use their clients’ servers to flow information regarding project drawings and specifications, occasionally placing bids online with their clients. Their managers also have one of Apple’s

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latest toys, the i-Phone, to stay connected both to the telephone grid and to their email. Given the nature of Appalachian’s projects, there is the ever-present requirement for investment in equipment such as bull dozers, excavators, pipelayers, truck tractors, pickup trucks, pipe bending equipment, welding equipment, water pumps, hydro testing equipment, and communication equipment. Providing all of this new would have a price tag of approximately $50 million; although the company has a substantial investment in construction equipment, each specialized subcontractor brings their own equipment to the job. Appalachian then augments their needs with equipment they have leased for the duration of each project. Often, these are lease/ purchase agreements allowing this to become another form of investment.

in our government and the general negative outlook on the world economy will have serious effects on the American population for some months to come,” predicted Bobby. “However, the American people are industrious, hardworking and will overcome diversity in their lives. This is an opportunity to show this kind of stamina and the willingness to work through the problems that we face as a nation.” That said, Appalachian Pipeline has no intention of slowing down. With their experience in the industry and ability to work in any terrain, the company can rest assured that they will thrive in the current turmoil of the global markets, becoming even stronger in the midst of the crisis.

In Today’s Market “Our market seems to be holding steady in this rocky time of the economic downturn. Our company builds more natural gas pipeline infrastructure than either crude oil or refined product pipelines. Although crude oil and refined products have been very volatile, the demand for natural gas seems to be holding its own for the near term. “I believe that the lack of confidence in the stock market,

COMPANY AT A GLANCE

Established : 2003 Employees : 8 Full Time Annual Revenue : $40 Million CEO : Bobby A. Crotts

www.appalachianpipeline.com

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US

Winter 2009

www.canadianexecutivejournal.com

Appalachian Pipeline, LLP, TN 170-D East Main St, PMB 280 Hendersonville, TN 37075

CAEJ__AppalacianPipeline_1  

Any Terrain, Anywhere THE MAGAZINE FOR ENERGY & POWER EXECUTIVES Winter 2009 www.canadianexecutivejournal.com

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