A privately owned lab that runs tests for the oil and gas, fishing and mining industries is expanding in St. John’s after doubling its workforce during the pandemic.
Newfoundland businessman Paul Antle’s Avalon Laboratories is growing despite a severe downturn in two of its traditional target markets because it has adapted by offering new products and services.
“Even before COVID-19, we knew oil and gas was going to take a hit because of Russia and Iran and the tanking of oil prices,” says Antle.
Russia’s decision to keep oil production high even as global demand for oil fell earlier this year – a move the country made in defiance of most oil-producing countries – contributed greatly to a precipitous drop in prices for the commodity.
Canadian oil, which had stood at US$36.82 per barrel at the start of the year, plummeted to a paltry US$3.50 per barrel in April. It has since picked up somewhat but not before gutting much of Canada’s oil industry.
That wasn’t good for Avalon.
The oil and gas sector was a major market for the four-year-old lab on the outskirts of St. John’s. The downturn took with it a big chunk of Avalon’s revenues.
As the pandemic spread throughout the world, things only got worse for the Atlantic Canadian business.
Suddenly, restaurants were closed. Overnight, seafood companies on the Rock faced the loss of about 80 per cent of their market.
Avalon, which serves the restaurant and fishing industries with its testing, took another hit.
President and CEO Antle tried to stop the bleeding. He laid off five of its 14 employees.
“You don’t know how long this will last and you want to survive.”
A seasoned entrepreneur, Antle also began to look for new sources of revenue. Gel-based hand sanitizer with a high alcohol content was in high demand.
“We made a hand sanitizer that was approved by Health Canada and conformed to the World Health Organization guidelines,” said Antle.
“We sell it commercially. That was a good revenue stream.”
Employers who bought the sanitizer and had dealt with Avalon started to inquire about the possibility of pre-emptively testing their asymptomatic employees for COVID-19. At that time, Avalon was neither equipped nor approved for such testing.
“We got approved in mid-June. We are now the only private lab in Atlantic Canada to do COVID-19 testing for employers,” said Antle.
“That has been a tremendous shift and a godsend to private employers in the area.”
The company’s pitch is simple: Protect assets by routinely testing employees through a lab in Newfoundland and cut down on the time and money it takes to transport samples and get results more quickly and cheaply.
Since it started private-sector testing in July, Avalon has done more than 1,000 tests, and demand has skyrocketed.
“We have one employer for which we’re doing 10,000 tests a month,” said Antle.
“Some employers choose to test on a rotational basis every three to four weeks.”
The identity of that client is being kept under wraps.
Avalon, which is a 100 per cent-owned subsidiary of Antle’s Pluto Investments, is a private company and divulges neither revenues nor profits. The top exec did reveal the company’s pivot has allowed it to maintain roughly the same profit margin as before the downturn in the oil industry and the ripple effects of the pandemic despite the cost of making changes.
“It’s not cheap to do what we do and pivot: the diagnostic tests, the equipment, the processes, the security and information technology. It’s a whole new dimension to our laboratory,” said Antle.
This is the second time he has reinvented the lab. He first incorporated it in 2017 after buying the assets from a bank for an undisclosed amount when a company went into receivership. The lab then had about a dozen employees.
It now has 30.
Due to the increase in the workforce and the space needed for the new processes to make sanitizer and do testing, Antle has decided to move the company into a bigger location closer to the St. John’s airport.
“We were leasing and the lease expired and I like to own the building we are in,” he said.
In September, Avalon will move from its roughly 8,000-square-foot location in Paradise, just west of St. John’s, into a 13,000-square-foot building.
“That’s a big facility for a lab,” said Antle.
The Pivot is a regular business feature showcasing an Atlantic Canadian company adapting to new market realities with innovative products, services or strategies. To suggest a business, email: [email protected].
