Tarnel moves to ND and grows business
by Susanne Retka Schill Posted on 4/3/2007
Five years ago Kevin Peters sold utility trailers and his brother, Michael worked with warranties. They still do today, but in their own company. Their brother Robert brought his manufacturing experience to the company and each of the brothers contributed two letters from their names to fabricate the company name: Tarnel.
Then the Canadian brothers packed up and moved their business to North Dakota.
"We couldn't afford to grow in Winkler," Kevin said, explaining that Manitoba has few programs to help entrepreneurs. They made the move 20 miles south to Walhalla to set up shop in an empty facility being used to store beans. "Choice Financial bank and the City of Walhalla asked us what it would take for us to move," he explained.
Three years later when they were ready to grow their banker suggested they contact SBDC. The brothers wanted to upgrade their trailer line to manufacture larger trailers. "There's more room for error and more room for profit in large units," explained Kevin.
Tarnel started building utility trailers to haul cargo up to 14,000 pounds like golf carts or cars. They wanted to offer heavier trailers large enough to carry loads up to 48,000 pounds such as front end loaders. They needed new financing to carry the larger parts and steel inventory. They also wanted operating capital to build inventory during the slower winter season, keeping their 30 employees working without layoffs.
Sales have grown for the new company by over $1 million each year. Last year they built 6,000 trailers and they expect to reach $7 million in the coming year, their fifth. The majority of sales are in Canada, but they are steadily gaining sales in the northern states thanks to their attention to quality.
Wiring is a weak point in their competitors' units, especially in harsh winter conditions. Tarnel manufactures their own wire harnesses. Soldered and sealed, they build them to last in winter weather. Similar attention is made to other component parts -- opting for quality. The increase in costs are counter balanced by the reduction in freight costs to their primary markets in Canada and northern states when compared with the largest trailer manufacturers based in Texas.
The financial package to help them grow involved the Red River Regional Council, Choice Financial Group, Small Business Administration, Bank of North Dakota, North Dakota Development Fund, the City of Walhalla and owner equity.
