Findlay, Ohio,
24
July
2014
|
12:00 AM
Europe/Amsterdam

New Acquistion Means New Opportunities for the Marathon Brand

Purchase of MPC's Galveston Bay Refinery includes new contracts for Marathon

Summary

When Marathon Petroleum Corporation (MPC) acquired BP’s refinery in Texas City, Texas, in February of 2013, the sale also included several pipeline assets and a co-generation facility that provides steam and electric power for the refinery. Also included in the deal were four new light product terminals in Jacksonville, Fla., Charlotte and Selma, N.C., and Nashville, Tenn.; space on Colonial Pipeline; and the assignment of associated branded jobber supply contracts.

When Marathon Petroleum Corporation (MPC) acquired BP’s refinery in Texas City, Texas, in February of 2013, it became the new owner of one of the largest and most complex refineries in North America. The purchase also instantly made MPC the nation’s fourth-largest refiner.

In addition to the 451,000 barrel-per-day (bpd) refinery, the sale also included several pipeline assets and a co-generation facility that provides steam and electric power for the refinery. Also included in the deal were four new light product terminals in Jacksonville, Fla., Charlotte and Selma, N.C., and Nashville, Tenn.; space on Colonial Pipeline; and the assignment of associated branded jobber supply contracts.

For the Marathon brand, that meant that MPC would supply over 50 BP jobbers and approximately 1,200 stations located in Tennessee, Alabama, Mississippi and Florida, representing roughly 61,000 bpd of gasoline sales. The purchase enabled the Marathon brand to enter several new markets such as southern Alabama and Mississippi, which had not had a Marathon brand station before. In Florida and Tennessee, the acquisition also strengthened the brand’s existing geographic footprint, making the Marathon brand even more prevalent.

“This is a tremendous opportunity,” notes Brand Division Director Bill McCleave. “The assignment of the supply contracts significantly complements our strategic focus and commitment to growing in existing and contiguous markets.”

Simply because MPC had become their new supplier did not necessarily mean that the jobbers were required to convert to the Marathon brand. The initial focus was to establish a relationship with the jobbers and in turn develop a commercial path forward and the beginning of a long-standing partnership.

In anticipation of the transaction, the Brand Division created the Central District, to be located in Nashville, Tenn., and responsible for accounts located in Tennessee, Alabama and Mississippi. Meanwhile, the Southern District would also grow, now responsible for accounts in the Florida Panhandle, which had also previously been void of Marathon Brand presence. Synergies were created with the newly acquired terminals and existing third-party terminals, with Marathon brand jobbers now able to utilize 14 new terminals in eight new markets.

More than a year later, a significant number of the jobbers and stations are now part of the Marathon brand family and the numbers continue to rise. “Florida is a great story in itself,” notes McCleave. “At the beginning of 2013, the Marathon brand was ranked No. 6 in Florida. With over 300 committed locations as a result of the former BP business, plus other unrelated new location conversions, our brand count in Florida will stand at approximately 700 locations. That would potentially move us to a No. 2 ranking.”

Select advertising blitzes, which kicked off in the Knoxville, Tenn., area in 2013, will continue in the Tampa and Miami, Fla., and Memphis, Tenn., markets. McCleave also emphasizes that the work is ongoing. “Where we are today is the result of commitment, collaboration and partnership,” he adds. “We expect the number of former BP jobbers who choose the Marathon brand to continue to grow. Naturally, growth must be accompanied by a continued commitment from our team to both quality and customer service. We have a never-ending commitment to servicing the needs of all of our customers and maximizing the value of the Marathon brand.”