BROWNING, Mont. ? After a rocky start, officials at the Blackfeet-owned Pikuni Industries Inc. predict they'll soon turn the financial corner with their new modular building construction business.
"Within three years, we're hoping to be sitting pretty good," said General Manager Ed Aubert. "We've had a pretty tough go, but we're doing OK. Our name is out there. People are starting to know who we are, and our homes are starting to move."
Pikuni (pronounced peh-kunn-ee) officials decided in the late 1990s to expand their metal fabrication and general contracting business and get into modular construction. Bolstered with $1 million in federal Department of Housing and Urban Development (HUD) grants to help cover the transition, the company has been assembling affordable new buildings at an ever-increasing pace.
The first HUD grant, awarded in 1999, allowed the firm to renovate a 40,000-square-foot building just south of Browning, purchase equipment and build the first prototypes. The second grant, secured in early 2000, was aimed at developing new markets for the buildings, which are built with metal frames instead of wood.
With prices for wood steadily rising, Aubert said it makes economic sense to use metal for the framing. Instead of nails, the stout studs and joists are secured with screws, which ensures a tighter and longer-lasting fit. The pieces are cut with a special stud-making machine purchased in New Zealand.
The firm, which employs 27 full-time workers in the production plant alone, also prepares financing packages and does building transport, as well as site preparation. The eventual goal is to become a one-stop, full-service operation.
"It will expedite the process," Marketing Director Don Kittson said of the loan packaging, which prepares most customers for one quick trip to the bank to secure a mortgage. "For us, it guarantees a sale."
So far, 12 of the modular units have been completed and sent down the road. Dozens of other orders are trickling in as a variety of federal and tribal agencies and private buyers choose the fledgling company for their housing, classroom and office needs. The buildings, which typically sell for about $50 per square foot, are especially designed for cold northern climates and windy conditions, like those found on the Blackfeet Indian Reservation.
Pikuni offers 27 computerized floor plans so customers have plenty of styles to choose from. Cabinet work is now done in-house, so buyers can also toy with some of the accessories. Aubert says standard homes built outside a factory typically sell for $60 to $100 per square foot, which many people simply can't handle.
"We wanted to make homes that are affordable," said Aubert, adding that the buildings run from $48,000 to $71,600 apiece. He also notes that wages for skilled workers at the plant run from $11 to $16 per hour. Entry level positions typically pay $8 an hour, a decent wage on the reservation, where unemployment can hit over 75 percent in the winter. Better yet, the jobs are year-round.
Pikuni recently completed a classroom, a dormitory building and an office structure for the Blackfeet Headstart program, and the company is working on modular buildings for the U.S. Fish and Wildlife Service at the Bowdoin National Wildlife Refuge near Malta. Another unit was built for the wildlife agency's research center in Wheatland, Wyo. Glacier National Park officials have contracted for a modular dorm building in nearby Many Glacier, just west of the reservation boundary.
Aubert and Kittson say they're working with tribal housing authorities on the Flathead and Fort Belknap reservations to sell up to nine homes in the coming year. They also hope to sell more of the structures to the Blackfeet Housing Authority, which typically has a waiting list of tribal members looking for a home.
By the end of 2002, Aubert says he expects 24 new units to have gone out the door. The company also hopes to tie into a major housing development outside Helena, which alone could produce enough orders to keep the operation at peak capacity for the next several years. If all goes well, Aubert hopes to complete up to 50 additional modular buildings in 2003.
"We have to get out into the commercial market, the private sector, so to speak," Kittson said, adding that the company's 8-A minority status undoubtedly helps them secure government contracts.
Pikuni's general contracting work is also expanding. Aubert says the company recently signed a contract to build a $1.6 million office addition at Blackfeet tribal headquarters in Browning. Last September the firm finished construction on the new $2.4 million tribal elderly care center.
Aubert said the metal fabrication component of the business is also diversifying into more agricultural equipment such as corral panels, gates, calving pens and even branding irons. The company is hoping to secure a $12 million contract with Kentucky-based KECO Industries, a major supplier for the U.S. Air Force, to build a specialized form of equipment carts.
The firm already has a "mentor-protege" agreement with Pikuni through the U.S. Small Business Administration. The agreements are designed to help smaller companies get the experience to bid on larger, more complex projects.
Another new sidelight for Pikuni is an industrial-sized insulation service housed in a trailer that can be hauled to any site. The in-house service insulates all of the modular buildings constructed at the plant, which helps hold down costs. One pending major insulation contract is with A&S Industries, a tribally owned manufacturing firm on Montana's Fort Peck Reservation.
While all the business activity is encouraging, making all the financial pieces fit has been a major challenge, Aubert says, especially considering that many federal contracts don't pay anything until the product is delivered. That form of purchasing ties up capital that could be used for other projects and creates cash crunches at times, he said.
But Pikuni officials hope to alleviate future cash-flow problems with help from the Native American National Bank, which now has a branch in Browning, as well as through increased sales. If predictions hold, there's clearly light at the tunnel's end.