Excellence Refined - 30 Years - Valero
Excellence Refined - 30 Years - Valero Excellence Refined - 30 Years - Valero
As a former UDS executive, Valero CEO Bill Klesse still recalls the diversity and sheer size of the acquisition in 2001. “The UDS deal gave Valero the size it needed to take on more risk going forward,” said Klesse, who became CEO in 2006. “It gave Valero a lot more mass, and with that, the ability and the opportunity to invest in places like St. Charles and Aruba.” The deal also gave Valero entry into sweet crude refining, and into new business territories in Canada. With the close of 2001, Valero was indeed a whole new company. Purpose-driven growth was its guidepost, now even more attainable with the financial stability created by UDS. The addition meant even more employees and instant ownership of 1,000 retail stores and 3,000 branded outlets. Through it all, Valero continued to focus on sour crude refining and capture the benefits of diversification. While the refineries would provide synergy and bigger geographic punch to Valero’s presence in North America, the new retail arm gave the company something refining could not: a face to the general public. UDS’ Diamond Shamrock brand had been around since the 1970s and was a fixture in certain parts of the country – particularly its headquarters state of Texas. Before that, Ultramar stores in Eastern Canada had been in operation since the 1960s. And even earlier, Diamond Shamrock’s predecessors, including the original Shamrock brand, had operated successfully since the 1930s. The entire system had been supported by the UDS Credit Service Center in Amarillo, Texas, which to this day serves credit card customers each year. By 2002, Valero had improved the profitability of its retail division by investing in topperforming sites, including remodeling or even rebuilding stores, acquiring new sites and closing marginal sites. As a side venture, Valero also began to grow a branded wholesale business that began with the Exxon purchase in 2000 but grew with the UDS acquisition in 2001. In the wholesale market, Valero could build brand recognition and customer loyalty through independent operations, without the high cost of operating and staffing its own stores. These “jobbers,” as they are known, offered Valero credit cards and had access to advertising and promotions but were independently owned and operated. In August 2006, Valero announced an 11-year agreement with Susser Petroleum – the largest single-branded wholesale deal in Valero history in fuel volumes and number of sites – to supply fuel and brand programs to more than 300 of Susser’s network of 324 retail stores in Texas and Oklahoma. Valero also began branding selected sites from Susser’s network of 352 wholesale dealers – thus becoming Texas’ No. 1 rack fuel marketer with 1,900 branded wholesale and company-owned locations, and significant unbranded sales volumes around the state. By 2007, Valero had earned Convenience Store Chain of the Year by Convenience Store Magazine and was actively looking to grow its jobber network. It was clear Valero needed a strong national image to hook consumers and investors. So on June 30, 2005, on the eve of one of the busiest driving holidays of the year, Valero announced its most ambitious retail plans yet – transform its entire U.S. network to the Valero brand, converting Diamond Shamrock stores to Valero’s signature teal and gold. A plot of land alongside Interstate 37 in Corpus Christi, Texas – within view of Valero’s flagship refinery – gave birth to the first company-owned, branded Valero site outside of California. By the end of 2009, the company operated 1,000 Valero Corner Stores and held contracts with more than 4,000 jobber sites. Diamond Shamrock, Shamrock and Ultramar brands still dotted the U.S. landscape as well. St. Charles: A Diamond in the Rough In May 2003, Valero announced its $500 million purchase agreement for Orion Refining Corporation’s 185,000 BPD refinery in south Louisiana – roughly 20 cents on the dollar compared with replacement value. The investment community saw the refinery as a run-down plant with a host of operational issues and a parent company that was deep in bankruptcy, but some analysts saw beauty in the deal. Valero’s solid financial footing (as a result of deconsolidating Valero L.P. and Valero Energy in 2002) allowed the purchase to happen without compromising the company’s balance sheet. The facility, located 15 miles west of New Orleans, had the makings of one of the Strategy for Success 18
Crews make a historic sign change as Valero becomes owner of UDS and its assets – namely, six refineries and some 5,000 retail outlets in the United States and Canada. most complex refineries in the nation. By July 2003, the deal was sealed. Rich Marcogliese, then Executive Vice President of Operations and current COO, sensed a bright future for the refinery in 2001, thanks to the partnership that took place. “When you combine the skills of our experts with the skills, experience and enthusiasm of the St. Charles employees, the future for the refinery looks incredibly bright,” Marcogliese said. The future came true in record time. Profits began posting within a month of Valero’s purchase. With that success, however, came the need to comfort a community that still feared its industrial neighbor and its poor environmental history. In letters to residents in the days prior to Valero’s purchase, executives openly committed to a responsible operation and honest dialogue with refinery neighbors. “We are looking forward to working with all of you, and we’re confident that you’ll find Valero to be a good neighbor worthy of your trust and confidence,” one letter read. In the 18 months that followed, Valero reduced the refinery’s sulfur dioxide emissions from acid gas flaring by 96 percent. St. Charles went on to receive the Chairman’s Environmental Award in 2005 for its commitment to protecting its community and the Chairman’s Safety Award a year later. More importantly, residents came to support their refining neighbor and tout it as a community asset. The refinery’s environmental leadership would grow even from there, earning governor’s awards and local accolades in years to come. From Canada to the Caribbean … Nearly a year after bringing St. Charles on board, Valero extended its international reach when it acquired El Paso Corporation’s 315,000 BPD refinery on the Caribbean island of Aruba. Like Valero’s other acquisitions, this refinery purchase for $365 million, plus $100 million for related marine, bunkering and marketing operations, was made for pennies on the dollar compared to replacement. The island operation fit perfectly with Valero’s acquisition strategy and gave it yet another outlet for processing heavy, sour crude. Geographic diversity also was key, but much work had to be done to integrate the plant physically and philosophically, using the company’s proven formula (management expertise, mentor-based learning and upgrades) to reach success. For their part, Aruba employees wasted no time 19 Valero Lines 3oth anniversary edition
- Page 1 and 2: VALERO LINES EXCELLENCE REFINED INS
- Page 3 and 4: Heartfelt Thanks to Our Employees W
- Page 5 and 6: JULY 28, 1978: Reporters question B
- Page 7 and 8: Longtime Valero refinery executive
- Page 9 and 10: The original Saber refinery, near t
- Page 11 and 12: By the end of its first year, Valer
- Page 13 and 14: shape financially and operationally
- Page 15 and 16: outreach projects and enthusiasm. T
- Page 17: Barely a month later, Valero became
- Page 21 and 22: From its early roots with Ultramar
- Page 23 and 24: As a leading refiner and marketer,
- Page 25 and 26: Valero closed the acquisition of fi
- Page 27 and 28: AURORA WELCOME ALBERT CITY FORT DOD
- Page 29 and 30: Valero San Antonio Volunteer Counci
- Page 31 and 32: From the Valero Texas Open to the U
- Page 33 and 34: these at-risk children do not make
- Page 35 and 36: Katrina. And Port Arthur, which sec
- Page 37 and 38: Leaders of several Valero refinerie
- Page 39 and 40: 2004. The Ardmore Refinery followed
- Page 41 and 42: In 2008, the Valero St. Charles ref
- Page 43 and 44: Turbines turn in the glow of a Sunr
- Page 45 and 46: Valero Family Album
- Page 47 and 48: Amarillo crediT center Joined Valer
- Page 49 and 50: Aruba Refinery Joined Valero in 200
- Page 51 and 52: Bill Greehey Refinery Joined Valero
- Page 53 and 54: Houston Refinery Joined Valero in 1
- Page 55 and 56: McKee Refinery Joined Valero in 200
- Page 57 and 58: Paulsboro Refinery Joined Valero in
- Page 59 and 60: St. Charles Refinery Joined Valero
- Page 61 and 62: Three Rivers Refinery Joined Valero
- Page 63 and 64: Valero Logistics Operations Valero
- Page 65 and 66: Valero Retail Joined Valero in 2000
- Page 67 and 68: O R A T I O N S a family of employe
Crews make a historic sign change as <strong>Valero</strong> becomes owner of UDS and its assets – namely, six refineries and some 5,000 retail outlets in the United States and Canada.<br />
most complex refineries in the nation. By July 2003, the<br />
deal was sealed.<br />
Rich Marcogliese, then Executive Vice President of<br />
Operations and current COO, sensed a bright future for<br />
the refinery in 2001, thanks to the partnership that took<br />
place. “When you combine the skills of our experts with<br />
the skills, experience and enthusiasm of the St. Charles<br />
employees, the future for the refinery looks incredibly<br />
bright,” Marcogliese said. The future came true in record<br />
time. Profits began posting within a month of <strong>Valero</strong>’s<br />
purchase. With that success, however, came the need<br />
to comfort a community that still feared its industrial<br />
neighbor and its poor environmental history. In letters to<br />
residents in the days prior to <strong>Valero</strong>’s purchase, executives<br />
openly committed to a responsible operation and honest<br />
dialogue with refinery neighbors. “We are looking forward<br />
to working with all of you, and we’re confident that you’ll<br />
find <strong>Valero</strong> to be a good neighbor worthy of your trust<br />
and confidence,” one letter read. In the 18 months that<br />
followed, <strong>Valero</strong> reduced the refinery’s sulfur dioxide<br />
emissions from acid gas flaring by 96 percent. St. Charles<br />
went on to receive the Chairman’s Environmental Award<br />
in 2005 for its commitment to protecting its community<br />
and the Chairman’s Safety Award a year later. More<br />
importantly, residents came to support their refining<br />
neighbor and tout it as a community asset. The refinery’s<br />
environmental leadership would grow even from there,<br />
earning governor’s awards and local accolades in years<br />
to come.<br />
From Canada to the Caribbean …<br />
Nearly a year after bringing St. Charles on board, <strong>Valero</strong><br />
extended its international reach when it acquired El Paso<br />
Corporation’s 315,000 BPD refinery on the Caribbean<br />
island of Aruba. Like <strong>Valero</strong>’s other acquisitions, this<br />
refinery purchase for $365 million, plus $100 million for<br />
related marine, bunkering and marketing operations,<br />
was made for pennies on the dollar compared to<br />
replacement. The island operation fit perfectly with<br />
<strong>Valero</strong>’s acquisition strategy and gave it yet another<br />
outlet for processing heavy, sour crude. Geographic<br />
diversity also was key, but much work had to be done<br />
to integrate the plant physically and philosophically,<br />
using the company’s proven formula (management<br />
expertise, mentor-based learning and upgrades) to reach<br />
success. For their part, Aruba employees wasted no time<br />
19 <strong>Valero</strong> Lines 3oth anniversary edition
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