Edmonton invention
New oilfield safety device takes inventor all the way to China
Safer way to carry hoses selling like hotcakes.
Present Dale Gregg with a problem, and he’ll find a solution.
Over the past 22 years, the local software engineer has created dozens of computerized management programs to help hospitals run more efficiently. In the process, he and his partner have built a successful mid-sized, Edmonton-based software firm with about 35 employees.
But Gregg’s urge to invent sometimes leads him in unexpected directions. So when a friend’s son injured himself last year after dragging a heavy hose by its metal camlock fittings, that sparked Gregg’s curiosity.
Surely, he thought, there must be a safer, easier way for workers to lug heavy hoses and pipes around oilfield work sites than by simply dragging them along.
“You can imagine what that’s like out in the field, when it’s been sitting in snow or mud and ice. In order to grab it, you need to pull it in against your body. And when you start dragging it, you’re off balance and usually walking on slippery surfaces. Workers end up hurting their backs and getting filthy,” he explains.
So Gregg rolled up his own sleeves and went to work. Barely 11 months, seven prototypes and $750,000 of his own money later, Gregg’s patented invention — the Handle-Tech Handle — is rolling off a local contract manufacturer’s assembly line on 50th Street and selling like hotcakes all over North America.
“In September, we expected to ship about 500 units and we ended up shipping about 1,100. In October, we were supposed to ship about 1,100 units, but it looks like we’re going to be around 6,000,” says Gregg, barely suppressing an incredulous giggle.
“My distribution network has doubled in size in just 30 days. Two master distributors in China are coming on board and we’re about to go to a show in Abu Dhabi where we hope to pick up distributors all over Europe.
“I have no idea exactly what’s going to happen, but our production system is only running at about 30 per cent of capacity so we’ve got lots of room for growth.”
Handle-Tech’s portable handle is a lightweight, ultrastrong, hand-held device that easily clamps onto hoses and pipes of various sizes, so they can be carried around like a suitcase.
Made of long glass nylon, and designed to operate in frigid winters or scorching summers, Handle-Tech’s gizmo can carry up to 400 pounds of weight, and with a “breaking point” of more than 1,100 pounds, it’s virtually indestructible.
The units sell for $180 apiece through local outlets like Red-L Distributors, and through dozens of distributors in the U.S. in states like California, Texas, Wyoming and Florida.
Simple math shows that Gregg’s new startup venture is generating monthly revenues of about $600,000 right out of the starting gate, net of distribution fees, which can run as high as 50 per cent of the product’s end price.
Although Handle-Tech’s initial focus is on the energy industry, Gregg is working on new product designs aimed at utilities and telecom companies. But more than anything, it is Gregg’s clever China strategy that really demonstrates his uncanny ability to think ahead of the curve.
Gregg had never travelled to China until last month, when he joined a trade delegation led by Premier Alison Redford. On his very first trip, he landed two master distributors — one in Hong Kong and another in mainland China— and a deal to manufacture a cheaper, knock-off version of Handle-Tech’s product, to be sold in China and throughout the developing world.
“In Canada, we do R&D, as in research and development. But in China, R&D means research and duplicate. They basically find things and duplicate them,” Gregg says. “I’m fully aware that our product can be copied very easily, and that was the reason I went to China.
“I asked some pretty pointed questions when I was there. I said, ‘If a Chinese company had a patent, would you protect it?’ And they said, ‘Oh yeah, by all means we would protect it.’ So it just made sense to me that I should sell the rights to manufacture the product to a manufacturer in China, so I can control my own knockoff product,” he explains.
“What that allows me to do is to control the product leaving mainland China. In return, they will pay me a small royalty. It will likely be made out of plastic so it won’t have the same lifting capability of this one,” he adds.
“But I can see a day when we’re competing against our own knock-off. It’s sort of like Huggies and Pampers. I mean you see them fighting in those TV ads, but when you learn the background, you find out that Procter & Gamble actually owns both of them.”
To Stuart Bergman, assistant chief economist at Export Development Canada, Gregg’s approach exemplifies what other Canadian manufacturers must do — extend their gaze beyond the U.S., and toward markets like Asia.
“For us, diversification is a theme we’ve been hammering on for years. Brazil, Russia, India, China, Mexico and Indonesia alone represent about half the world’s population but only about seven per cent of Canada’s total exports. So that’s problematic from a strategic and a growth perspective.”
Gregg’s simple advice to other homegrown manufacturers who are wary of going abroad: “All I can say is, embrace your fears.”