Pumping: Waikato fuel firm in expansion phase

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Waitomo Group’s Jimmy Ormsby knows an opportunity when he sees one.

In October, the prime minister had called out oil companies for “fleecing” consumers, the cost of petrol in Wellington was being talked about, Waitomo had just secured consents for a new fuel stop on Hutt Road in Wellington, – time for the disruptive Kiwi firm to make an announcement.

Success. National media came calling Jimmy, managing director of Waitomo, and the firm got the biggest splash it could possibly hope for in setting up in the Wellington area.

It will open at the start of next year as the Hamilton-based, Te Kuiti-founded family firm grows at the rate of five new outlets each year. They are not ruling out a move into the South Island, have turned the ground on a site at Papamoa, and are poised to start work on two more.

The retail side has got cranking in the last five years, enabled by a change in technology. Until then, the firm, founded by Jimmy’s grandfather Desmond 70 years ago, was a solid operator servicing commercial customers – it had a chain of truck stops and delivered diesel to the likes of farmers and transport firms, as well as to some service stations.

Improved, more robust payment technology gave them the chance to sell to retail customers as well, and that was another opportunity they seized.

They started by adding retail petrol to their existing diesel truck stop in Mangere and have gone on to add about 30 retail outlets from Paihia to Foxton. Including truck-only fuel stops, that sees them with more than 50 across the North Island.

Their retail outlets are all self-service, made possible by the improved technology.

There was more to it than that: the company was also willing to take the chance. Even without an on-site shop, each outlet is a major investment.

“We have been at the right time and right place to grow when technology was available, and we had the appetite for it,” Jimmy says.

The no-frills, self-service offering helps them keep prices low.

Jimmy points out they have to weigh the price at the pump against the need to be sustainable.

“What I would say is it is a very competitive market and we consistently put out our best price which is a Waitomo price. We do that by running a low-cost model, thinking about the customer first.”

Jimmy says opening five sites a year is within their capability. “What’s really important is that we make good decisions around strategic locations for where we are investing.”

A recent example is the outlet opened in August on the southwest corner of the Hamilton Airport precinct, with high visibility from SH3 and on a site poised for future growth.

Not that you can prepare for everything: the introduction of the Auckland fuel tax had an immediate impact on their Bombay station.

The cost of expansion is significant. Installing underground tanks along with other infrastructure costs about $1.5-2.5 million, on top of the land cost.

Construction costs have been rising as environmental considerations have gained ground.

Waitomo chooses to recover the vapour displaced not only when a tanker fills the storage tanks, but also when a motorist fills up – the fumes and vapour go back up the nozzle and into a recovery system, reducing emissions. Jimmy says that investment alone is more than $100,000.

The growth has also brought a rapid increase in staffing, currently about 60.

“As we have grown we have managed to attract some really good people to accelerate the growth and also make sure it’s disciplined growth.”

All up, Jimmy estimates they have about two percent of the total New Zealand fuel business.

The business spans three generations, with Jimmy’s father Grey about to retire as chair of the board. Desmond started it in 1947 as Waitomo Transport based in Te Kuiti before the company went on to partner with Mobil on its current Ellis St site in the 1990s, becoming part of Waitomo Petroleum. In 2002, the Ormsbys bought out Mobil, and Jimmy moved back from the UK to join the firm, picking up a range of roles before becoming managing director a couple of years ago.

He is keen that the firm keeps its family feel despite being in a rapid growth phase.

“We keep things very simple, we are very grounded. As an organisation, we’re focused on doing core things that we’re good at and that’s around making good capital investments, making technology work for us well and taking a reliable offer to market.”

When they first started the retail outlets, keeping things simple applied  not only to the payment system, but also to branding. So simple that they didn’t bother with it. Initially, motorists would just see the word “Petrol”.

King St Advertising helped out with that, and now the name Waitomo is prominent wherever they operate, using the tagline “Kiwis fueling Kiwis”.

That’s the thing about Waikato, Jimmy says. Everything the firm needs is right here. Their signwriter is just along the road, King St are in the central city, as are their accountants and lawyers, they get their tanks built and serviced locally, a tyre place is nearby to keep their trucks rolling… the list goes on. Even the technology they use to reduce emissions through vapour recovery is provided by a Waikato business, Gallaghers. Every service they need is in Waikato and has been right through the journey.

Jimmy sees theirs as a strong Waikato story, and they plan to stay at their Frankton site, which they bought off Mobil a year ago.

“We are very much a family firm, with family values. These have been with us since my grandfather and father – my challenge is to make sure we maintain those as we grow.”

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