May 12, 2016 / 7:32 PM / 4 years ago

After Canada wildfire, a silver lining for businesses

TORONTO/VANCOUVER (Reuters) - As the Canadian city of Fort McMurray prepares to rebuild after a wildfire reduced parts of it to ash, businesses from ‘man camp’ suppliers to pizza parlors are preparing for a spike in demand as clean-up crews, builders and oil sands workers pour into the region.

A massive plume of smoke, from a wildfire north of the city, stretches over Fort McMurray, Alberta, Canada Wednesday evening, May 5, 2016. Courtesy Chris Schwarz/Government of Alberta/Handout via REUTERS

The fire destroyed more than 2,400 buildings, or around 10 percent of the Alberta city’s structures, damaged more than 500 others and forced some 90,000 people to flee.

“As tragic as this situation is, there is a unique opportunity for a market that had gone very slow, to get some return of growth,” said Russell Dauk, vice president at Alberta builder Rohit Group.

As oil markets weakened, Rohit’s building starts tumbled 80 percent in Fort McMurray over the last three years, forcing it to cut three-quarters of workers there.

Providers of temporary housing, such as Houston-based Civeo Corp (CVEO.N), say they are already busy with insurers and bankers who need somewhere to sleep after surveying damage. Its stock is up more than 21 percent since the fire started May 1.

Civeo, the biggest supplier of worker accommodations to Canada’s oil sands projects, expects occupancy to rise at its seven lodges and 14,000 rooms in the area, said Chief Executive Bradley Dodson.

These so-called man camps are expected to be the only living quarters in the region for thousands of returning oil sands staff and recovery workers as the city itself remains off-limits to residents for the next several weeks.

Bookings at Civeo’s Mariana Lake Lodge have swollen to over 700 from 300 before the fire, said Ian Robb, president of the union representing camp cooks and cleaners.

“Our members are across the country, so they phone in for jobs that I post every day,” he said. “The last two days, we’ve had 30, 40, 50 jobs at a time going on (our hiring board) ... I anticipate that we’ll pick up considerably.”

Target Logistics [AGSCS.UL] expects to fill the 400 beds at its Cheecham Lodge with workers rebuilding the town and is talking with other camp operators about partnerships.

“The business and economic benefit will be significant,” said senior vice president Troy Schrenk.

Clean Harbors Inc (CLH.N) will need to hire staff for its lodges, but won’t know the demands for its environmental services until the government completes its clean up plan, said Kirk Duffee, president of oil and gas services.

Airlines are also gearing up for increased demand as oil companies use more fly-in-fly-out workers, though flight plans cannot be set until oil companies know where their workers will be located, said Darcy Morgan, chief commercial officer with charter operator Enerjet Ltd.

And feeding Fort McMurray will be a big job, said Tyler Warman, mayor of Slave Lake, Alberta, where a 2011 wildfire forced the evacuation of 7,000 and destroyed one-third of the town.

“Restaurants will be very busy for the first couple of weeks, as people will probably have to throw out their fridges and freezers,” he said.

Ziad Tarabien said he cooked up food until 5 a.m. at his Taras Pizza restaurant in Lac la Biche, Alberta to supply an evacuation center over four nights, though he provided much of it without immediate payment.

“We’re like everybody else in community. If we were in this situation we would be in need,” he said.

Reporting by Nicole Mordant in Vancouver, Susan Taylor in Toronto, Rod Nickel in Lac la Biche, Alberta; Editing by Alistair Bell

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