Host Taylor White is joined today by the dynamic duo of James O'Connell and Joey De Athe who run Soil Cycle, a subsidiary of Contour Group, that was established in 2020 to provide additional support to Contour’s earthworks division by delivering cost-effective services for the disposal of excess soil. Known for brilliantly transforming the landscape of soil management, our guests discuss the intriguing world of bulk excavation, soil management, and their innovative approaches to navigating the complex regulations of Ontario’s construction industry.
Delving into the crucial role of relationships and strategic business decisions in the challenging yet rewarding field of soil management, our guests share their journey from the grassroots level to becoming leaders in the industry. They emphasize the importance of integrity and transparency in their operations as they explore how recent regulations have shaped their business strategies and the innovative solutions they've implemented to stay ahead. The discussion also highlights the significance of land ownership, the complexities of acquiring permits, and the financial intricacies involved in running a soil management business. You do not want to miss this episode filled with inspiring tales of perseverance, a veritable wealth of business acumen, and valuable insights into the evolving landscape of environmental responsibility in construction.
Topics:
- The evolution of Soil Cycle
- How it has adapted to and capitalized on Ontario’s strict soil management regulations
- The challenges and rewards of establishing a trustworthy reputation among developers and builders
- Insights into the permitting process for soil management
- The importance of relationships in the construction industry
- Strategic business decisions that establish market dominance and trust
- The future of soil management, focusing on sustainability and the potential for rehabilitating land for agricultural use
- James and Joey's proactive approach to education and advocacy in improving industry standards and practices
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Episode transcript:
Taylor White: Oh, what? We can take 10,000 loads here. What's the process of finding a dump site? Obviously, finding Pori's funding for finding a dump site that can take material. And then what's the process like between, “Okay, then now we got to spend $250,000, get a permit for it, to be able to take it and open it up.” What's that timeline like? And then what's that process like?
James O'Connell: The beautiful thing is now it's coming to us.
Taylor White: Nice.
James O'Connell: So last four years, we're just boots on the ground, knocking on doors, leaving no stone unturned relentlessly. And now it's just kind of all paying off and which is great, great.
Joey De Athe: And now we're able to provide a low truck and dump to these developers and builders. So us putting an excavator on the pile and providing the trucking and the dump, it's pretty hard for people to compete with us when we've got the– So trying to provide a service and also trying to make these developers realize that maybe they're not getting a fair deal sometimes and maybe that they've been getting hosed for many years. And there are ways for us to help these developers save money. So we're getting really trusted in that way. Now, these building pads, in the past, people were charging hourly for the machine to sit there, hourly for a roller to be on site, plus, these people are making an income from dump loads coming in. So we allow, as long as it's a certain amount of loads we can get in a day, we'll provide the dozer and the packer at no charge because we are making a coffee, we are making money from the loads coming in. And we're straight up and honest with all these developers on that and also other large construction companies. So they're actually calling us to actually remove their loads or vice versa, do a place and pack if it's an infill. So, yeah, so it's just kind of working with what we got and adapting and trying to be innovative as well, too.
Taylor White: So lands are really important, but it's really sounding like relationships are even probably the most important.
Joey De Athe: It's relationships. And again, I mean, to own the land, that's a big cost, right? So if other people own the land and. And you can share the wealth and not be greedy and everyone– Yeah, I think that's a really good way of doing business rather than thinking you need to be the king of the castle. I don't need to be the king, but we can follow the king around.
Taylor White: Welcome back, everybody, to the CONEXPO/CON-AGG podcast. As always, I'm your host, Taylor White. Podcast is brought to you by our good friends over at Komatsu. Thank you so much for supporting this podcast. With me today, I have two guys, actually, double J, James and Joey. I actually had an intro for Joey, but it probably relates to both of them. So it's the guys that essentially move dirt like it's their day job. But I would highly think that this is their day job, and that's why I'm excited to talk with you guys today. So, Joey and James, thanks for being on here today.
Joey De Athe: Thanks for having us, Taylor.
Taylor White: Yeah, I appreciate it. So, Joey, obviously, me and your relationship, we've been talking for quite a while. You're not too far from here. You're about four hours south of Ottawa here. And James, I'm assuming you're from kind of the same area. Thinking about it obviously with the podcast and people that we want to– I always wanted to have a chat with you because I find it really interesting, especially with the changing regulations here in Ontario regarding excess soils. We don't need to get heavy in the regulations and all that stuff because this audience is all over. But I think they would be interested here just how different and I guess complicated our regulations for moving dirt are. But you guys want to give a brief kind of explanation of, “Hey, this is what we do, and this is why we are here.”
James O'Connell: Yeah. So we specialize in bulk excavation site operation, permits, pit and quarry rehabilitations, and engineer building pets. So we have great synergy between our excavation and grading division and our soil management division. And in addition to that, there's a landscaping division. So it's pretty like it's a full package developer.
Taylor White: You guys would be best at prefixing, like, okay, so soil cycle, management of dirt. Now, why is that a need in where you guys are? Was that a business before these regulations come in and maybe give a brief description of the regulations in Ontario?
Joey De Athe: Yeah. So prior and how we kind of met is James had his own dump truck. He was an owner operator. I was doing a big job at the airport there, moving a ton of dirt. James was the first guy on site, last guy to leave every day. Shoveled his box out of his dump truck. I just seen something in him. I'd be loading them and he'd be reading self taught books and books that'll, , improve his day to day skills. And so he came to me, he said, “Hey, have you ever thought about having a business moving dirt?” I said, “Well, we already are doing it. Not to a crazy scale, but every excavation company, in a way, is in the same boat.” So we gave it a shot. We had a site that came up and we did well on our first one, and we started to see something come from it. So right there, James was giving me Cole's notes on all these books he was reading, telling me what we should be doing, how we should be doing it. And I just believed in them, and we went for it. And last year, we moved close to 80,000 loads of dirt. So between brokering, having our own dumps, or providing a load truck and dump, so we were very efficient. We've got two quarries now that we have the rights to fill. So we've been using those as our winter and wet days. And we do a lot of building pads, looking after any load truck and dump to these building pads, and then doing a place and pack as well. So kind of providing a one stop shop for a lot of the developers in our area.
But, yeah, so, I mean, prior to the regulations, I think there were a lot of, we call dirt bandits. So, they would be knocking on farmers doors saying, “Hey, we got material. Would you like to fill your field?” The farmer says, “Absolutely.” Not knowing what's the characteristics of the soil, accepting these loads that are most of the times contaminated or not suitable for these sites. So we're trying to make an awareness to these farmers and make it show them that, “Hey, guys. You can't just take any dirt.” And unfortunately, it wasn't the excavation side's problem. It was the farmer who accepted the dirt, who had to deal with it. So these dirt bandits would come in, they'd fill this guy's place up, they'd have the city show up. Now all that dirt that was contaminated, remediated, some farmers would lose their farms because they couldn't afford to get rid of it. So, yeah, it was just a total disaster. So we spent the first three years of soil cycle. We walked away from a lot of people that didn't want to do permits and they didn't want to do it properly. And we've seen people making money on these sites that we could have, but we didn't want to have that name of not doing things properly. So we spent a couple hundred thousand the first year just on working on permits. And finally the permits started to come in and now we're rolling, we're thinking about multiple years down the road on permitting, not just tomorrow. So, yeah, that's kind of a little bit of a gist so far.
Taylor White: That's awesome. You did a great recap there. So essentially, people, the regulations in Ontario are like, “Hey, if you're hauling off anything more than x amount of cube or it's in an urban area, you need to get rid of that proper site that can take that table of material,” right?
Joey De Athe: Yeah, absolutely.
James O'Connell: And that's the challenge. Just because a pool job that has eight to ten loads is not getting soil analysis. So what do they do? So they have to find another backfill or some small job to take it to. And although they're under that threshold for testing, our sites are required to take the testing. So there are major challenges with the regulations right now. And what's going to change is unity across the board with all of the governing bodies. I mean, there's no correspondence between them. But most importantly, us, the community, the guys on the front lines need to start voicing our concerns and being a part of these amendments instead of these groups of people who aren't on the front lines putting together these amendments, and then a year or two later changing them because they don't work.
Taylor White: I think it's just like people need education, right? People need to be educated on it. Like Joey was saying, it was a good point. You get these dirt bandits that are going and filling the farmers. Yeah, that's great. Dirt bandits, but it's the receivers and they're the ones that are getting screwed. And although the farmer's getting a low lying area filled in or he's building up an area that he needed a thousand loads in all purpose got it for nothing, it’s 5, 6, 7, 8 years down the road, when somebody comes down, it's like, “Hey, where did all that material come from? All right. We're going to go in and test that.” Oh, now you got to get rid of a thousand loads of material at your expense or a fine or a penalty or whatever. That sort of stuff still goes on, although it's regulated, there are still dirt bandits bombing around, dumping loads there.
Joey De Athe: Well, a lot of the problem is, too, these farmers are filling these areas with contaminated dirt and then they're farming up in there. So we're technically eating this contaminated soil, vegetables, crops, whatever you have be. So the awareness of just the dirt going in there is just a minor problem. It affects everybody, anyone that buys stuff at the local grocery store is eating this from the soils.
James O'Connell: Absolutely. And another challenge is the municipalities and the bylaws make it impossible for these farmers to afford a site alteration permit. But every farmer needs soil, so they're going to go to the black market. And that's what we're trying to get across to these municipalities is like guys that you need to make it accessible for farmers to do this financially. And right now it's ridiculous. So they go to Facebook. The farmers will go to Facebook, get hooked up with Bob, Dick and Harry, and the next thing , we get the call to remediate it. But again, it all comes down to the guys sitting at the top that are refusing to listen to the guys on the front lines.
Joey De Athe: And the capital that's needed for these permits. At my farm, I got a permit for 10,000 loads to bring in and I was over $100,000 for this permit. Well, most people can't afford to spend $100,000 on a permit without no income coming in. So our game plan or our way of doing things is we go to these farmers and as long as they need over a threshold of loads, we will pay for the permit. So we'll provide all the tests they need, all the geo testing, everything needed to get these permits. So basically we go out on a limb paying for these permits and then we are recuperating once the loads are coming in. So, it's not something that we're making quick money on. We're spending a ton of money to get these permits. And then by the time we've got our money from filling this site, we were already thinking of five other permits down the road.So like the money is just continuously going towards permits.
Taylor White: So your business model– It's a super interesting business. Essentially, you guys are strongly capitalizing on the new regulations of excess soil. That's what you guys are doing.
Joey De Athe: At first those regulations came out, everyone was complaining. All this is baloney, whatever. We saw an opportunity. We thought, “Well, you know what? We're going to work with this, we're going to make it work. What can we do? Okay, we're going to try to show that maybe this doesn't work the way that they're showing.” We're really trying to help the communities. We want them to see our name come across the board for a permit, they know things are going to be done properly.
James O'Connell: The unfortunate part is the industry is blacklist. We're not bad people but we are painted in that same picture unfortunately because the media just smears any sort of fill management or any sort of soil management story and so it makes it impossible for the neighbors to welcome us anywhere we go. But at the end of the day we are regulating the speed on our street, we are tracking our load. We are doing everything we're supposed to be doing but unfortunately we're still painted in the picture.
Joey De Athe: And I think too the amount of building that's going on. So we got how much construction going on and they never ask where these loads are going. So you can put a conduit and developer, you think the municipalities would be saying, “Hey where are these 5000 loads going and what is the site?” But it's not like that because the fill sites fill up so fast. So if you're quoting on a job or you're trying to put numbers together for a project that's going to happen three months down the road, who knows where the dump site is going to be at that time. So there's so many things that are making it really difficult. I mean we're working our way through it as well too.
James O'Connell: I'll give you an example of one of the amendments. I'm not going to give up the city because I got to get them but they've made it. So with this new amendment they want an engineer on site at all times. Well, our engineer straight up told us that's not financially feasible for like EllisDon or companies like that. But not for your mom and pop farmers.
Taylor White: Not at all. So you guys have multiple different dump sites. So essentially people are paying you guys– You guys charge per ton whenever they're dumping or per load?
Joey De Athe: Per load. So we, our numbers depending on permit cost and amount of loads going in there, we figure out what a load cost would be to dump a load. When they dump a load we have a bulldozer on site that pushes it. We've got a guy sitting there tracking. We are partners in the Phil app, the new app that's out. So we run the Phil app for all of our sites. If there's a lot coming from it, we're just chipping our way through.
Taylor White: Again, it's like asking a farmer how many acres and stuff. So tell me when to shut up. But how many sites do you guys have? Because you guys, and this is probably a next question, is then you guys are filling in quarries. And you said, now we have quarries and are filling in the quarries, so how many sites do you have? And are there multiple levels of what kind of class, table of soil you're allowed to take at each site? Could you take like soil with fuel in it at one, but then only table two topsoil at another?
Joey De Athe: Yeah. So all of our sites have parameters on what we're allowed to bring in. Our one quarry, we are not putting any clean fill in at the moment because we're working on trying to get a contam fill perfect for this site. So we'll be doing a diked area, and we'll be treating on site and then that treated material will go right into the pit.
Taylor White: Explain that, what you just said. Is that the machine that you put dirt into and it cleans it?
Joey De Athe: No, the washing plant. No, we haven't got there yet, but that–
Taylor White: Those are expensive.
Joey De Athe: Yeah, I think one we like is about 12 million
Taylor White: That's it? Oh.
Joey De Athe: So you can see like the money that's needed just to fund a business like this, to do it properly. A lot of these bigger companies aren't even blamed by the rules either. They have these transfer stations, they're going in the front door, right out the back. Nothing's getting treated but that's not monitored. There's so many things that just aren't quite fair. We stay in our lane, they stay in theirs. We're going to do things our way and do it right. We're not here to tell tale on people, but it gets frustrating sometimes. And we've got two quarries going. We've probably got 10 dump sites going. But again, it's all timing on some of them. Like some of them right now, we can't fire up. We don't have the material because, like, in Hamilton, you're only allowed to accept Hamilton material. So you have a farm in Hamilton, you need table one material. There's not much table one material in Hamilton, so they're not even allowing material coming in from other jurisdictions. So some of the sites have permits, we're waiting, but we don't have the material to fill them. So it's the real, constant shuffle to make things. But having that many sites is what is able to keep us.
James O'Connell: If you only have one, you're in trouble. Unless you're taking everything under the sun, which there's a lot of guys that do that, and it's like turning a faucet on for them. But when you're running a legitimate show, there's usually some time in between your stockpiles.
Taylor White: That's what makes you guys like the guy. It's like, “Oh, well, we got this material here, and we're up working wherever, I'll call soil cycle. I'm sure they got a spot up here.” Like, you guys essentially want to be those guys that are like, “Oh, call us. I'm sure we have a spot in the area that takes whatever material that you're looking for.”
Joey De Athe: The funniest thing about that is I got great buddies in the industry, and they'll call me saying, “Hey, I've got 10 loads I need to get rid of.” It is so hard to tell your friend, I can't take your material even though you want to. So those uncomfortable phone calls happen more often than not when you're trying to help people. So, unfortunately, those people still have the bandits number in their phone book because they need to use them on day to day to keep their operations going. Right?
James O'Connell: And to be honest, we've tried to share resources with other fill management guys. I don't like the word dump guys, but that's the terminology. And I don't equate us to your typical dump guy, whatever you want to call it. So, when we get the calls, they are thinking that we can just call Bob, Dick, and Harry out there, but we don't have those relationships because your values and principles don't match up with ours. It doesn't matter how much money's on the table. We're not making that move.
Taylor White: Well, and when your business is based on what you guys are doing. I'm so heavily regulated and I'm sure there's someone watching you guys. And if you slip up or let or do one thing that's like, “All right. Yeah, we'll put five loads of this in there.” And then that's the day that someone shows up. You get caught. Your entire business model, your business, is totally ruined.
Joey De Athe: Absolutely. Yeah. And you know what? It's funny because we have those jealous people running around and following us and we're getting the phone calls and the same bylaw guys showing up and, “Hey, come on in. Come check out what's going on. I guess the same guy called you.” People are out to get you as well too. Lots of people caught on the same pile. So closest dump usually wins. But we're trying to make it that we're the guys that people would rather drive that extra 10 km for in order for us to be–
James O'Connell: You know the old saying, when people start smearing your name and stuff like that, you're doing something correctly, it means that you're ruffling feathers and you're disrupting the industry.
Taylor White: I know all about that. That's all good. So major part of your business is owning land, finding land that can take it. So how do you guys find land that is like, “Oh, you know what? We can take 10,000 loads here.” What's the process of finding a dump site? Obviously, finding a quarry is finding a quarry, but finding a dump site that can take material. And then what's the process between, “Okay. Then, now we got to spend $250,000, get a permit for it to be able to take it, and open it up.” What's that timeline like? And then what's that process like?
James O'Connell: The beautiful thing is now it's coming to us.
Taylor White: Nice.
James O'Connell: So last four years, we're just boots on the ground, knocking on doors, leaving no stone unturned relentlessly. And now it's just kind of all paying off and which is great, great.
Joey De Athe: And now we're able to provide a low truck and dump to these developers and builders. So us putting an excavator on the pile and providing the trucking and the dump, it's pretty hard for people to compete with us when we've got the– So trying to provide a service and also trying to make these developers realize that maybe they're not getting a fair deal sometimes and maybe that they've been getting hosed for many years. And there are ways for us to help these developers save money. So we're getting really trusted in that way. Now, these building pads, in the past, people were charging hourly for the machine to sit there, hourly for a roller to be on site, plus, these people are making an income from dump loads coming in. So we allow, as long as it's a certain amount of loads we can get in a day, we'll provide the dozer and the packer at no charge because we are making a coffee, we are making money from the loads coming in. And we're straight up and honest with all these developers on that and also other large construction companies. So they're actually calling us to actually remove their loads or vice versa, do a place and pack if it's an infill. So, yeah, so it's just kind of working with what we got and adapting and trying to be innovative as well, too.
Taylor White: So lands are really important, but it's really sounding like relationships are even probably the most important.
Joey De Athe: It's relationships. And again, I mean, to own the land, that's a big cost, right? So if other people own the land and. And you can share the wealth and not be greedy and everyone– Yeah, I think that's a really good way of doing business rather than thinking you need to be the king of the castle. I don't need to be the king, but we can follow the king around kind of thing.
Taylor White: 100%. I like that. I'm interested about the quarries because for anybody who really knows what a quarry is, you blast, you crush, you sell rock. Big hole in the ground. And what they're doing here in Ontario or in probably other areas as well, too, is this new regulation is people are finding old quarries that can be rehabbed or reclaimed or whatever the right word is, and basically fill them in with essentially, hopefully, whatever you'll be allowed to fill in with contaminant material or excess soil or whatever it may be. So is that kind of like something where you guys are like– Obviously the bigger money, the bigger ticket items for you guys would be in the most contaminated type material, correct?
Joey De Athe: Not so much because we're so limited on where it can go.
Taylor White: But if you get a site, that if you have a quarry and they're like, “You can take literally anything from one to anything in this hole,” would you not be like, “Nice.”
Joey De Athe: Yes, but life for the most part, those contam fill permits are a special permit. That takes a couple years to get, it's not like it happens overnight. The rehabs that these quarries are providing, the MNR is providing now, unfortunately, it's not to fill it back up to native grounds. It's to fix the slopes. So a rehab on a core–
Taylor White: Interesting.
Joey De Athe: They aren't what they should be. So we were at the sand and gravel ASGA conference, and we're trying to make it an awareness of the, “Guys, these, we can make this farmable land, we can make this reusable. You guys are making these, these basically pits or these big boroughs, these big holes are not really helping anything because we've got all this material that's got to come out of the city, that this is the only suitable spot to bring it. And you're not letting us actually do it properly.” So we're hoping that the MNR is going to start to realize what these pits are.
James O'Connell: And they have. They are. Things are changing. Their mindset's changing on bringing them back to the original purpose and grade. So that's perfect. Because I say this all the time, we lose 319 acres of farmland and development every single day. Simple mathematics. Whereas our grandchildren are not going to have food supplied from Canada at this rate. So any opportunity to rehabilitate any sort of acreage and give back to agriculture is huge, in my opinion. And that's where we all should work together.
Joey De Athe: Well, even having affordable houses. Housing right now is crazy. And people are having a hard time buying houses. So creating a trailer house park, something that can be engineered pads on top of that. So it's not like the compactions needed. There's a lot of options that you can do with these quarries to make it usable and make everyone aware of what's going on as well.
Taylor White: Yeah. You guys are really thinking outside the box. You guys are thinking like, “Okay, this is what we're doing.” But then also, like, “How can we fill it in?” But then make that what we're filling in actually purposeful. And here's where the bylaw is. And that, I think, is super impressive the way you guys think it. I mean, it's literally next level. But whenever I picture it, it's actually interesting. I just learned something. I thought that for instance, big company around here, they just got a little quarry, I pictured that you could just dump it and they were filling it back into native, but they're saying, “Hey, you're at a 90-degree, whatever. Turn that into a 3:1 and then that's all you're doing.”
James O'Connell: Yeah.
Taylor White: That's kind of weird though. Why? Because isn't there still just a hole at the center of that.
Joey De Athe: Yeah. So I mean, they want to create them to parks. I mean how many parks do we need?
James O'Connell: Prairies, parks, there's various things they like to do, but at the end of the day then the mathematics tell us what we need to be doing and that's agricultural farming. End of story.
Taylor White: Yeah, 100%. So if you guys are trying to get into– So are you guys actively trying to work with regulators and the MNR to be like, “Hey–”
Joey De Athe: No. We try to get– I mean they're tough to get a hold of.
James O'Connell: They don't want to talk.
Joey De Athe: They don't want to talk. They're not eager beavers like we are. I mean they're just doing their 9:00 to 5:00 job and they're not looking to change anything. And so it's been tough.
James O'Connell: I'll give you an example of the ignorance. I won't give away the governing agency, but we had this pit in Halton Hills we were going to fill. We went through all the necessary channels. It took probably a year for me to get through this. I finally had heritage. I had every governing agent you could think of on this property out with me for a walk. And their proposal was we won't let you fill this in with Phil, but we'll let you do it tops and we'll think about it if it's just topsoil. And I'm thinking this is 30 ft, 40 ft of topsoil. We can't like just– Just no logic to it. That’s the type of ignorance we're dealing with at the highest levels. All I would love, I would love to get in front of anybody that can kind of be a voice of change, but we can't get– Nobody wants to go on the record. It's too new.
Taylor White: It is still new. It is still new and I still feel like it is new. But again, like I said at the beginning of the podcast, I feel like people need to be educated on it. I'm still dumb. I'm still learning and trying to actively better my knowledge of excess soils and where it can happen and what cannot. But you guys probably spend countless times, actually, just like– This is your business. This is what you guys do. Do you feel like a lot of people are uneducated on it?
Joey De Athe: Oh, absolutely.
Taylor White: How do we solve that then? How do we fix that? Like, that's my point. I'm uneducated on it. I feel like we need more of that.
Joey De Athe: We haven't gone to any reporters or we haven't done that yet, but I feel like–
James O'Connell: I want to.
Joey De Athe: But that’s going to be–
James O'Connell: A double-edged sword. We throw them under the bus, I still got to get these permits. So it's where– But when we are saying guys like we have– I'm hoping we get a meeting with one of the cities. Again, I'm not going to throw that to you on the bus, but we're hoping that we can get in front of the council and at least say, “Hey, listen, here's the new amendments. They're not going to work. Here's why they're not going to work. Let's work together.”
Taylor White: Now, is it guys just, like, other contractors, construction guys like me, or is it actually, people in higher positions that are very uneducated as well, that you're trying to get through it and be like, “Hey, guys. This doesn't make sense. Sloping up a pit like–” It kind of sounds like they need education as well.
Joey De Athe: Guys like you or us, the guys that have their feet on the ground all see an issue with it. Some guys aren't innovative, and they're not thinking about how to change or what needs to be done. They're just going with the flow, doing what they're told. But if people aren't doing this or working like what we are doing every day, I think it's a tough thing for them to be able to make a rule about a board or some way of having multiple people like us sit on a board and say, “Hey, guys. This is what we're dealing with. This is how we think we can solve it. What can we do to move forward?” Any amendment takes years or months or whatever to change. It's not like stuff gets done overnight.
James O'Connell: And at the end of the day, soil, it's moving every single day. So it's got to go somewhere.
Taylor White: Well, it's only going to continue to get more and more. More and more apparent for everybody. This is definitely– This is here. It's not going anywhere. And I think that that's the main kind of takeaway. So what does your guys’ growth look like? Like what the soil cycle growth looks like from here? I mean, you guys obviously have fantastic, you mentioned because– How long has the soil cycle been around? Four years, five years.
James O'Connell: It’s our fourth year.
Taylor White: Fourth year. So from where you guys started to where you are now and then what are you guys looking at? Is it capacity? Is it sites? Is it more iron?What does the growth look like for a business like yours? Being able to handle more?
Joey De Athe: We want to keep our profit margins high.
Taylor White: Amen.
Joey De Athe: I mean, at the end of the day, the way we look at it is if we can develop lands for other organizations and there's no reason why we can't for ourselves. So, the big picture would be owning our own land and hiring our own companies to come in. And we have the synergy to do it between all the divisions. And I think we all know to construct. The construction portion of a job of a development is the largest cost. So if we can go in there and get it to a certain point and then sell the land, I mean, I think there's a huge benefit to that as well, too, right? So our long term goal would be getting into development. So we're trying to be smart with the money we are making and make the right moves at the beginning because every move seems to be a crucial move. So that's kind of our long term goal to see. I mean. I mean, yes, we want to have a transfer station as well. We want to have our spots where we want to have a well oiled machine, a great playbook that we can share and try to help with people as well, too.
Taylor White: Yeah, I feel like a perception, let's say I'm taking out material and I got to take it to our local dump site here. I'm going, “Dang, those guys are making serious– Look at how much it was per load and how much money.” But, it's almost like you guys– It's a super capital intensive business. I mean, you guys need working with super expensive permits. You need super expensive iron on site to move it. You have people, you have QC, you have engineers, you have your apps that you're running. There's a lot going on there. So you guys were talking about money management and stuff. But as far as maybe a younger guy watching this or younger girl or just somebody like– Is this a business where you'd be like, “Yeah, this is something good. I would recommend people to get into this.” I mean, take a bias out of it, maybe, “Hey, let us have it all.” But what's the business model like? Is it good?
Joey De Athe: To be honest with you, it's a tough business. When you got 250 trucks rolling into a job site, the stress levels are high. This isn't for everybody. You got engineers that aren't knowledgeable on how to drive or they don't have any– So they can make a site– We try to have eight minutes on and off site. So that's kind of our guarantee. We do two lane roads in. So we're really trying to make our sites where people want to go because everyone's gone to a dump site where it's dreaded out, you're getting there and it's soaking away, you can't dump. So to run it right, it costs money. So that's the tough thing.
And being efficient. So if we're doing a load truck and dump, I mean, you want the biggest bucket going in the back of a dump truck as quickly as you can. You want the biggest dozer blowing through a load so you can have multiple loads. You can't have a small machine. It's all very– The overheads are huge.
James O'Connell: I'll tell you what, I had hair and I had no gray four years ago. Okay? So this was an unregulated business for so long that you've got your characters in here that are tough and you got to be able to hand it and manage those types of people being tough yourself. So it's not for everyone. You're across somebody at some point that has ill intentions and is going to test you. And if you don't have a backbone to stand up to that, then this isn't the industry for you.
Taylor White: Yeah. Joey, I do want to touch on, I know that, I guess, through social media and stuff, too, and obviously, James as well, too. You guys do a really good job at making content for social media around business and everything, too. Is that something that you guys have helps as far as client and employee end?
Joey De Athe: Well, I don't know if you remember our conversation. I don't know how long ago we chatted about you having your videographer working for you. And you blew me away with how you run your social media, the videos you post, how you go about posting them. So I kind of took a little chip out of your car there, and we hired a guy. We went to Sheridan College, and they have a videography program, and we hired a student in, and the student's been amazing, and he's been bringing his student friends. So we're trying to make it a little business for this guy actually going around and shooting videos and doing stuff for other businesses to try to get their social media and get people watching and get awareness going. And you know what? I got to say, a lot of that came from just how you've been running.
James O'Connell: Yeah, what's great is we kind of took a different step to this. I was watching everybody, how they market their stuff, market their site, what they need. They text what they need and stuff. I'm like, there's nobody putting a face to this. So I said, “Okay, I'm going to put my face out there. This is who I am. This is–”
Taylor White: I like that. That's smart.
James O'Connell: And in the industry, that's in the dark. I thought that that's a good tactic to bring everybody's guard down. You know who I am, what we're about, walues, principles, the whole nine yards, and it worked. It really did. And I know the old guard doesn't doesn't really see the value in that, but social media is the equalizer, and it's certainly doing a great job at bringing us to where we want to be.
Taylor White: Well, what I like is that guys actually get it right, because there's people that do social media and don't get it, and there's people that do social media and get it, and you guys get it. And that's what I really appreciate, putting your face out there. You're showing your machinery, you're making interesting, real content. Because at the end of the day, it's like, “How cool can we make dumping loads of dirt look?” And I struggle with that. That's what we do, too. I mean, we're putting septics in the ground or we're digging a basement or we're doing this. Can we make this look cool? It's like showing the machinery, showing the people, showing what we do. And it's just not an easy task to do. So making an investment of being like, “Hey, let's get somebody in here to make content full time.” It's a big investment, but it's really important. And I think it makes a big impact in today's world.
Joey De Athe: And what I think posting stuff maybe sometimes, too, that people can learn from, not every time, but you can share a bit of information to someone that, oh, they can take from it, that's great, too. It's kind of fun, too. Our videographer guy has fun with it, and he's one of those guys where I can just stand there. I don't have to tell him how to shoot, what to shoot. He just gets it. He'll take nit bits through the project and then put one lump sum together at the end. So, yeah, it's been interesting.
Taylor White: I love that. So are you guys going to try to– Soil cycle. You guys have– Because I know, Joey, that you also, maybe it's family business or I'm not sure what the relationship is, but contour landscape.
Joey De Athe: Yes. So my family business, so that's me and my dad with that. So my dad had a landscape company when I was growing up. Very successful. We had like 56 sites, plowed snow, cut grass, did all the maintenance, had a construction crew, did a little bit of tree work. And you know what? I was lucky. My parents trusted in me and I was able to evolve and we adapted into excavation. That was more where my interest was. So when I was 20, my dad had sold off the landscaping portion and he still works every day as well, and he's happy to be there. And I think we're pulling the 30-year-old guy on my dad. I mean, I can see the fun he's having, having with us as well, too.
James O'Connell: He's a big, huge part of what we do. He's in the background a lot.
Taylor White: That’s awesome.
James O'Connell: Yeah, he's a big piece of our puzzle, and we appreciate him so much.
Joey De Athe: He's the guy who went to school for honors physics, so his numbers are pretty calculated when he comes to numbers, too. So I've been fortunate enough to learn that. Yeah. So, I mean, we've got lots of people helping, and my sister just joined on with us.
James O'Connell: And he's the oldest.
Joey De Athe: Yeah. My sister's working in our office now, and she's got her masters, and she's very sharp as well, too, and really helping us with a business plan and getting an alignment done with all our team. And we're running the management style of EOS. I don't know if anyone's heard of that. So EOS is a way to manage your business and keeps you accountable. So we have a 90-minute meeting every week and go over what needs to be done. And so we're really trying to get the right tools on our side and doing the best we can.
Taylor White: Yeah, I feel like that's us as well, too. I feel like we say we haven't figured out or we're trying to figure it out, and then something else happens and whatever. You're constantly putting out fires or figuring internally in the office. But, James, it was actually interesting hearing Joey talk about you and said you were like an owner operator, dump truck driver.
James O'Connell: Yeah.
Taylor White: And now you're here. That's pretty incredible, dude.
James O'Connell: Well, I knew the dump truck was just going to be a stepping stone into– To be honest, I didn't know what at the time, but when I started moving dirt, I'm like, “Okay, there's something in this–”
Taylor White: That's super cool.
James O'Connell: And so it took me about a year or two to put together the pieces of the puzzle, including the partnerships.
Joey De Athe: And you presented your business plan to other people that shuffle it, that shut them down. Multiple people had shut them down. Right?
Taylor White: Look at me now.
Joey De Athe: And you know what the thing is, man? I'm not greedy for money. I've never been greedy for money. Money comes to people who work hard and they care and they do what they're going to say they're going to do. So to me, money wasn't an issue. It was like, “What do we got to do to get this done?” And James is the best partner I can have for the soil business. He learned how to read a soil report in, like, three months, whereas most people have to send it to an engineer. So we can scan through these reports, not wasting anyone's time sending it off to other engineers to accept it. We know it's going to be accepted before it's sent out. So, a lot of things like that.
James O'Connell: And I strategically, he was mentioning how I was reading my book and, well, get loaded by it. I strategically placed that book in my hand like that, so he'd see it.
Joey De Athe: And what was the book? Show them the book.
James O'Connell: Here it is right here. The Secrets of The Millionaire Mind.
Taylor White: Nice.
James O'Connell: So I just knew I needed to attract him somehow. I'm like, “This guy's got it going on. He's young. What's going on? I think he's a good piece of this puzzle.” So I reeled him in and things are great because we're on reach, he's strong, and vice versa.”
Taylor White: Yeah. You need that synergy. For us, I always feed off. I'm a lot outward facing, big idea. Here it is, this is where we got to go. This is what we got to do. And then having people in the office be like, “Okay, great. Let's build on that, but let's actually figure out how we can do that on a realistic level.”
James O'Connell: And then we got the OG, his dad, to kind of reel us in if we–
Taylor White: He's looking at the numbers in the books going, “Okay, sure.”
Joey De Athe: I mean, we all know that was a thing, right? When you go out on a limb to do your building, you go out on a limb to paint your machines, you go out on all that costs money that it's not money that's really making you money. I mean, you need it.
Taylor White: You're taking it off profit.
Joey De Athe: So where do you put the time and their money in? You still got a life to live. You have a family. You want to maybe build or do something at home, but you're in bed slacking because you're doing stuff at work. So there's a constant juggle on what's the right decision. So having multiple people to bounce things off of and having the open mindset of what your idea is might not work, but it could bring something to the table that's great for you, too.
Taylor White: If I had everybody on our team with my mindset, I'm pretty sure I'd be living in a cardboard box right now. I need everybody to really back in what you guys are saying. It's super important. But listen, I know you guys, you have a lot going on, and I really appreciate you guys coming on today. I feel like there's so much to unpack. I feel like people need to get educated. I feel like you guys capitalize on something that is super great. I feel like you still are capitalizing on that and I'm so pumped to see your guys’ success and to see where you are now. And maybe hopefully there's something in Ottawa we can work on together as well to come up this way because you guys are two good dudes that I think are going to be where are going and are going to be going places.
Joey De Athe: Well, I would love to touch base on our Phil app with our partners another time if you want to have another sit down. But that's the interesting app we got building. We want it to be basically in the marketplace for the construction industry. So like the GG of the mark of the construction world. Bidding tenders can go through there, there'll be qualified tractors, there'll be equipment sales, the load tracking is already a big part of it. We are offering free load tracking on there currently. Basically like your Google Maps and it shows where all the sites are. I mean, if you guys don't have it, I suggest you maybe download the app and take a look at it and browse around and tell us what you think.
Taylor White: Awesome. Yeah, that makes a lot of sense for your business to happen as well. Yeah. Listen, James, Joey, I really appreciate you guys coming on today. Seriously, awesome chat. Love talking about this sort of stuff. Just literally 45 minutes of dirt. That gets me going on Wednesday morning. I don't know about you guys, but appreciate you guys coming on today. Thank you very much.
Joey De Athe: Thanks for having us. Taylor, that was awesome.
James O'Connell: Thank you.
Taylor White: Thanks everybody for listening to this CONEXPO/CON-AGG Podcast brought to you by our good friends over at Komatsu. Take care.
