By Eric Peterson | Oct 09, 2018
Mining and drilling tools
Industry: Industrial & Equipment
Products: Mining and drilling tools
Jay Copeland launched his namesake business in 1980 with a focus on the mining industry. An investment group bought it in 2013 and pivoted to oil and gas, a secondary market until that time.
"At that point in time, oil and gas was really booming," says Anderson. "They told all their mining customers to go pound sand."
Anderson bought the company in 2015, after working in distribution and logistics in the oil and gas industry in Vernal, Utah, and elsewhere. A headhunter recruited him to Copeland, then it foreclosed and he snapped it up. "I got tired of building up businesses for other people, and they ended up selling out on me," he says.
"When I stepped in, I said, 'We've got to go back to the old way of doing business with mining and water wells as our focus.'"
He quickly launched a brand, Spartan, and revamped the catalog of tools, bits, and drilling pipe. But then he needed to go patch things up with the mining industry. "We had to rebuild trust with our old customers," says Anderson. "I put about 40,000 miles on my truck in four and a half months."
The mileage paid off. Copeland Supply won back some of the customers it had lost under the previous ownership. "That kept us afloat in '16 to '17," says Anderson.
"2018 has taken off like a rocket," he adds. The catalyst? "We really diversified."
When Anderson bought the business, mining had declined to just 10 percent of the business and the catalog was pretty skimpy. "When I stepped in, they had four main products they were building," says Anderson. He added a number of new rig tools along with the rebranding to Spartan.
Oil and gas, along with water well, drilling tools now represent 23 percent of the business. Mining reclaimed the plurality of sales, about 47 percent, and OEM manufacturing for other brands has driven growth and now accounts for about 30 percent.
With the diversification came a reorganization of the 11,000-square-foot facility around Lean principles. "We stepped in and reorganized the entire shop," says Anderson. "We had to bring in a lot of new equipment." That task was accomplished by buying CNC lathes and mills, a plasma table, and other equipment at online auctions. Anderson says he was able to acquire about $400,000 in equipment for $140,000.
The top-line result? A 40 percent increase in production and staff size in three years. Drill pipes, swivels, plugs, and deck bushings are among the top-selling products. Sales have risen from $1.5 million in 2015 to a forecast nearly double that for 2018. "We're on the cusp of the $3 million mark," says Anderson.
He says there's good reason the trajectory will continue. "We're one of the only manufacturers left in the western United States building the tools we build," he explains. That distinction is complemented by the experience of the staff: Two employees are grandsons of founder Jay Copeland who have been with the company for more than a decade.
Challenges: "Supply is getting more difficult with the tariffs," says Anderson, noting that the steel Copeland Supply uses has few or no domestic suppliers. The tariffs have led to a 35 percent uptick in prices, which the company has passed on to customers.
Rising shipping costs are another challenge. As trucking freight has jumped from roughly $2.50 a mile to $4.50 a mile in the last year, Anderson is looking to ship by rail. "The problem is Grand Junction doesn't have the facilities right now to handle cargo containers," he says, so trucking is a necessity to get product to and from Denver or Salt Lake City. "We've got to ship it in and ship it back out, and it goes by truck."
"Our challenge is the same challenge as anybody else in the manufacturing business: finding quality people with experience in machining," says Anderson. He's looking to cast a wider net and recruit new hires from the Midwest and other manufacturing regions. "Grand Junction is a great place to live and a lot of people would love to live in Colorado," he says.
Opportunities: A line of RC (recirculation) pipe is set to launch before the end of 2018. "We're hoping that pushes us to that $5 million mark later on," says Anderson.
Another is "expanding our OEM manufacturing," he adds. "With the downturn in the economy, we had quite a few competitors fall off."
"The mining industry is making a pretty significant comeback," says Anderson. "Definitely with the Trump administration, there's been a big turnaround and a big push for the coal industry and the mining industry."
Needs: "More hours in the day would be great," jokes Anderson.
In the longer term, space might become an issue. "We're sitting on five acres," says Copeland. "When the time is right, we can expand the facility."