Different Brand of Diversity

Instead of reaching many industries, Western Refinery Services strives for a full spectrum of offerings across one business sector

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Prevailing wisdom holds that a diversified customer base helps businesses prosper. Western Refinery Services in Ferndale, Wash., puts a new spin on that axiom by providing a variety of services mainly for one industry: oil refineries.

Under the guidance of Jerry Libolt, founder and chief financial officer, Western Refinery constantly adapts its services and equipment to meet the needs of four major refineries in far northwest Washington. To do that, the company emphasizes workplace safety and embraces risk without hesitation as new opportunities arise.

“The most important thing is to create a presence,” Libolt says. “Then you can see customers’ needs and jump on opportunities. You can tell them, ‘Hey, I can help you with that.’ Sometimes I’m asked why we get into some things that aren’t profitable and are dirty, hard jobs. But we do it to create a presence. There are a lot of things we’ve done that I didn’t like doing, but I knew we had to do it to have a presence that would lead to a lot of other opportunities.”

Establishing a firm presence at the refineries also makes it easier to deal with ever-changing and increasing regulations. By always being in on the “ground floor” when new mandates occur, the company is used to incorporating them. “It’s much better than being on the outside and always trying to meet new criteria, which can be overwhelming,” Libolt says.

Trying the new

About 60 percent of Western Refinery’s business comes from the refineries, and the rest from industrial cleaning for pipeline companies, utilities and municipalities. Libolt would prefer to be less dependent on one business sector.

“We’ve tried to diversify over the last 20 years because I was concerned about having all our eggs in one basket,” Libolt says. “But our growth has been so fast, and again, it’s because we’re there. The refineries are comfortable with us. So instead, we’ve diversified within the refinery industry.”

Diversifying often means trying new things. An example is a foray into what Libolt calls civil work for refineries and other customers – anything that has to do with moving earth. As the refineries expand, they’ve asked Western Refinery to do everything from site preparation to sewer installations.

“Sometimes we say yes to a request for a new service, then wonder how we’re going to do it,” Libolt chuckles. “But we love it. We thrive on it.” The refineries don’t mind that the company also works for competitors, as long as it provides top service.

“When the bell tolls, you’ve got to be there, 24/7,” Libolt says, “We’re always juggling employees. Either there are too many, or not enough. It’s a constant struggle. And you can’t complain about short notice jobs. They want us to pull a rabbit out of a hat and make it happen.”

Barriers to competitors

As Western Refinery becomes more integral to refineries’ operations, Libolt has felt more comfortable specializing in that sector. His comfort increases as new barriers to entry in that market emerge.

“It’s getting tougher and tougher to work in a refinery,” Libolt says. For example, Homeland Security regulations require employee background checks and Transporta-tion Worker Identification Credential (TWIC) cards for all workers who require non-escorted access to ports and other security-sensitive areas. Embedded with an integrated circuit chip, the cards cost $132.50 each and are valid for five years.

“So if the refineries get a company in that has all that, and does a good job, they’re more willing to ask you to do things you don’t have a lot of experience with, just to avoid all the hurdles of bringing in a new company,” Libolt says.

For some companies, long relationships with customers could breed complacency. But Libolt is vigilant about that. “One of our biggest challenges is to stay focused – not accept past success as something that will just continue to happen,” he notes. “We’re not assured of anything. You’ve got to keep a razor-sharp edge. You can’t get lazy and stop paying attention to details. If you do, before you know it, you’ve got a problem.

“Even though we’ve worked at one refinery for 27 years, we still tell our people every day that today is a new day – to work like it’s your first day here. Stay focused on safety, quality and putting in eight solid hours of work a day.”

Roundabout path

As unlikely as it seems, Libolt entered the refinery field by way of dairy farming. For his first 15 years out of high school, he was part-owner of a dairy farm. He might have stayed in that business if he hadn’t noticed that a new regulation was forcing area farmers to build lagoons to store manure during winter.

Before, farmers would spread manure on fields all year, but that contributed to water pollution from runoff in spring. The lagoon meant farmers had to pump liquid manure onto fields, instead of using manure spreaders.

“I saw an opportunity because many farmers didn’t have the equipment to pump it onto the fields, and no one else was doing it,” Libolt recalls. “The lagoons were so new that no one knew what kind of equipment was even needed. I started out with a pump that ran off a tractor’s power takeoff, an irrigation pipeline, and a sprinkler. It was hard, inglorious work. There were many times I wondered what I was doing.”

One day, Libolt got a call from an oil refinery that operated a farm where oil waste was tilled into the ground. The refinery was having trouble making the program work, so a representative contacted the local soil conservation service, which recommended Libolt.

“Sometimes you’re just in the right place at the right time,” Libolt says. “Eventually, one thing led to another, and pretty soon I was doing more and more maintenance work – anything that had to do with cleaning.

“As they gained confidence in me, they asked me to do other things. I’m not the kind of person to shy away from challenges, so I took them on. Then I started visiting other refineries, because they all used the same processes. Before I knew it, I was working with several of them, but it didn’t happen overnight. It took one or two years.”

Getting a foothold

At first, it wasn’t easy for Libolt to get his foot in the door at refineries, but he persevered, sustained by a belief that he could provide a truly valuable service. “If I hit a road block, I’d go and try a different person,” he says. “You don’t have to apologize for being persistent.”

His scope of services eventually increased until he had to buy vacuum trucks to clean tanks and other refinery equipment. Today, Western Refinery’s fleet includes 10 wet-vacuum trucks from Presvac Systems Ltd., used mostly for refinery work; and two vacuum trucks from Guzzler Mfg. Inc. for industrial cleaning and hydroexcavating.

Most of the time, Western buys new vehicles because it can’t afford breakdowns in the middle of critical jobs. Even if the company wanted to buy used equipment, Libolt says, it’s difficult to find certified vacuum trucks on the used market. That makes new vehicles virtually the only option.

“Our industry is highly regulated, especially when it comes to transporting waste on public highways,” he says. “So all our trucks must be built in a certified shop by certified employees.”

Alert to opportunities

To market the company and remain aware of new services the refineries may require, Western Refinery relies on a staff of former oil-industry executives who maintain good industry contacts. They serve as new-business eyes and ears, staying abreast of new regulations and other changes on the horizon.

“What you did yesterday may not be what you’re doing tomorrow,” Libolt says. “So you have to stay ahead of the curve.” Despite a sluggish economy, Western Refinery hasn’t laid off any employees, and Libolt says the future looks bright, as long as the company stays focused on customer service.

“The number one thing for me is integrity – to be trustworthy,” he says. “So much of what we do depends on the relationships we’ve built over the years. It’s all about that trust factor.

“If a business trusts you, they’ll give you opportunities they otherwise might not give. You have to work for other companies as if you’re working for your own. You can’t slack off. Don’t be there just to make money. Be there to help your customers.”


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