Built to Last
An insistent customer’s request gave rise to Modus Inc. five years ago. Now this accidental company’s products are known as the Cadillac of portable buildings
by Malwina Gudowska
As they say, even bad press is good press. But the team at Modus Inc. was not happy its products were christened “trailers” in a recent newspaper article – and in the first line of the article, no less. “We are trying to change the perception,” says Mitz Simonelli, the company’s chief financial officer.
“Historically, a trailer is something on wheels, so that is totally passé,” adds John Verhagen, president and CEO. “Our basic building system is completely outside of what everyone else does. We’ve revolutionized the trailer, portable market and made it better.”
Modus Inc. produces steel-frame (in contrast to traditionally wood-constructed) modular units that are used by schools, telecommunication companies and the oil and gas industry. Stacked, stand-alone or attached to a permanent structure, the units are a far cry from trailers used to house workers at remote locations or wonky portables children of previous generations had to learn in when registration was up. The units produced by Modus also resemble, both inside and out, more of a permanent residence than a temporary one.
“Typically, the relocatable product was not as good as a permanent product, but now we are offering a relocatable product that is just as good, if not better,” says Simonelli. Even the Government of Alberta, one of Modus’s largest clients, has shied away from calling temporary classrooms portables lately. And since 2004, when the company was founded, Modus has been fighting the name game while expanding into three plants (Crossfield and Airdrie, Alta., and Swift Current, Sask.) and posting outstanding growth in revenues, assets and profits. Between 2004 and 2006, the company increased revenues by 700%.
“I think my partners were a bit surprised to see the numbers and the fast growth rate that was envisioned,” says Verhagen of the business plan he drew up. “There were some eye-openers for some people [like] for vendors… they were very hesitant in believing at the onset because our plan was very aggressive.” But the company met its yearly goals with gross annual sales last year reaching over $30 million, double the previous year and 10 times more than in 2005-2006, while the number of employees has nearly quadrupled. The company estimates $80 million in revenue this fiscal year. “It was never our intention to be a small company,” says Verhagen.
Rewind to just five years ago when the company (which will remain nameless) that Verhagen and Simonelli worked for un-expectedly went into receivership on a Friday afternoon. “We were all shocked. It seemed to be a very viable company,” says Verhagen, 53, who decided to retire as a result. But on Monday morning, he got a call from a client asking for a quote on a project. Even after Verhagen explained what had happened, the client insisted on moving forward. “He wanted a quote no matter what company letterhead it was on,” says Verhagen, who put together a proposal and had purchase orders at his home the following day. And that’s when he called Simonelli and Joe Dotto, now the company’s vice-president operations, and they decided to get back into business immediately.
The trio set up a temporary shop in Crossfield, where Simonelli’s father owned a company and gave them space to work. “We threw our tool belts on and we started building,” says Simonelli. “And it started steamrolling from there.” Through previous contacts in the telecommunications industry and with Alberta Infrastructure, Modus continued working for clients within both the telecommunications and education sectors, building their first classrooms for the Government of Alberta in April 2005.
The units meet LEED (Leadership in Energy and Environmental Design) compliance standards – something rare in the modular building industry, the partners say – and put emphasis on factors such as sustainability, health of the occupants and energy efficiency. The building block of the modular units is the company’s proprietary technology, Structural Insulated Panels (SIPs), used on the exterior walls, roof and flooring. Built in one of four factories (there are two in Swift Current) and shipped to wherever the clients need them, the units have the same qualities as ones built on-site, only without the hazards of mold and pests as well as other construction costs and risks that come with building on location, often in inclement weather.
Pages: 1 2
Follow Alberta Venture On: