It might be closing in on its centennial, but the company founded by the late Kenneth Colin (K.C.) Irving is more agile than ever.
What started in 1924 in Bouctouche, New Brunswick as a single gas retailer is today a multi-national energy and marketing company. Irving Oil provides direct employment to 3,000 Atlantic Canadians, operates Canada’s largest refinery and delivers clean finished product to wholesale and commercial customers, in addition to more than 900 retail locations throughout Eastern Canada and New England.
One thing that hasn’t changed, however, is the company’s steadfast commitment to its Atlantic Canadian home. In the past two years alone, they have invested more than $300 million throughout the region: refurbishing their refinery; building a new head office; renovating their retail network; enhancing marine terminals; preparing for the Energy East pipeline; donating to various community causes; and, developing their most valuable resource — their people.
That’s a sizeable investment under any circumstances, but particularly so in the current economic climate. Irving Oil’s year-over-year expenditure is a much-needed economic shot-in-the-arm in an environment of shrinking budgets, expanding deficits, increasing taxes and stalled resource projects. In fact, the company’s 2015-2016 renovation and refurbishment budget alone is equivalent in value to the 17th biggest project on the Atlantic Provinces Economic Council’s 2015 Major Projects Inventory — with three big differences: Irving Oil’s spend is 100 per cent private investment; it’s guaranteed money circulating throughout the economy (i.e. it isn’t subject to government cutbacks or falling global petroleum prices); and, it happens (to differing degrees) every year.
The life span of the top 20 projects on APEC’s 2015 Major Projects Inventory is, on average eight years. Irving Oil’s accumulated spend across that same time frame easily places it among the top 10 in terms of project value. And that’s still just its reno and refurb expenditures. Toss its annual payroll and other business expenses into the mix, then extrapolate its cumulative impact over 92 years, and you quickly realize that Irving Oil is probably the most effective economic development tool Atlantic Canada has ever seen.
More than just a business, it’s virtually an entire industry. Indeed, the big picture is so vast that it’s almost beyond comprehension. Which is why we’re focusing our attention on individual pieces of this very expansive pie.
Refinery Takes Flight
Maintenance and upgrading of the largest refinery in Canada — the Irving Oil refinery in Saint John, New Brunswick — is an annual event. A turnaround, as it’s known in industrial circles, is an opportunity to test and improve the safety, reliability and environmental performance of refinery assets. Irving Oil’s typical turnaround budget ranges from $25 million to $100 million. Its 2015 turnaround, Operation Falcon (symbolically named for a species known for its speed, agility and vision) was a once-in-a-generation turnaround and the largest in the company’s history. The company spent $200 million over an eight-week period, creating 2,700 new jobs during the construction phase, working around the clock to ensure that the project was completed on time.
Timeliness is imperative, says Irving Oil’s Vice President and Chief Operating Officer, Mark Sherman. “Our dedicated supply and trading departments work hard for many months — as far as a year in advance — in the lead-up to a turnaround to ensure we have enough products to reliably supply our customers and region while our overall production rates are reduced during maintenance.”
One of the most intriguing aspects of Operation Falcon? That it didn’t add additional capacity to the refinery. Notes Sherman: “The scope and investment level represent our commitment to long-term operation in Saint John and in Atlantic Canada, and positions our company for future growth opportunities.”
A Place To Call Home
Within 24 months, the company will be leaving its home office of the past 50 years: the beloved ‘Golden Ball’ building where K.C. located the company in the 1930s.
Irving Oil has long outgrown the Golden Ball: its Saint John employees are currently spread across five different locations across the city. The solution is an 11-storey office building with the capacity to house all 1,000 home office staff under one roof. The new headquarters will be a stone’s throw from the Golden Ball building, at the historic King’s Square district, and designed to complement the existing streetscape.
The 18-24 month construction project is also being designed to stringent environmental standards: it will be registered with the Canada Green Building council with the goal of becoming LEED certified. According to the Canada Green Building website, “Leadership in Energy and Environmental Design (LEED) is a rating system that is recognized as the international mark of excellence for green building in 150 countries.”
Ian Whitcomb, President of Irving Oil, says the move to King’s Square represents a philosophical as well as a physical shift. “Working together under one roof in a modern and efficient workspace will build on our company’s one-team approach. It will foster collaboration and productivity, positioning our people and our company for growth and success.”
Asked why Irving Oil is so committed to staying in Saint John, Whitcomb explains that it’s a reflection of K.C.’s founding principles. “He believed in the strength of this community and that belief continues today with our Chairman, Arthur Irving. We could not succeed without the support of our people and community. Our new home office is one way to say thank you for that support.”
“We Run a Clean Shop”
Curiously, Irving Oil’s 900-plus retail outlets are as well known for their clean washrooms as they are for the gasoline they sell. For people on the road, the guarantee of a spotless washroom is a compelling reason to drive past a competing gas station.
Darren Gillis (General Manager, Sales & Marketing Operations) says the clean washroom approach developed organically from the company’s customer-first orientation. “We believe in giving our customers an exemplary experience, from the moment they arrive at our site. This means paying great attention to every detail — from clean washrooms for our customers to having the fluffiest white towels and clean showers for our professional truck driver customers.”
“Our goal is to make the investments necessary to continue to be the retail destination of choice for our customers and the retail brand of choice among independent dealers,” says Gillis.
Want proof of that determination to be number one? Aside from having the “cleanest washrooms on the road”, Irving Oil retail outlets also reward loyal customers with Air Miles points. And, they keep their brand top of mind with innovative marketing programs like their annual Pump up the Fun summer promotion (its 2016 campaign will be the largest retail campaign in the company’s history). But the most impressive indicator of their “in it to win it” attitude is the ongoing $100 million investment in their retail network. Not only does this investment keep their washrooms cleaner than ever, but it ensures you will see more of them: Irving Oil plans to add 23 new retail sites by the end of the year.
“We know we can achieve our goals by having the best sites and a leading dealer and consumer value proposition,” says Gillis. “By working closely with our dealers and our joint venture partner Couche Tard, we will continue to provide our customers with the products and services they have come to expect.”
Securing the Energy Supply
Atlantic Canada’s energy landscape is changing. Where there were once six refineries in the region, there are now only two (thankfully, one of them is the largest refinery in the country). Still, the contracted capacity has put greater pressure on the supply chain, with recorded instances of supply shortages for both Nova Scotia and Newfoundland and Labrador in recent years.
It’s a status quo that Irving Oil refused to accept. The company is currently investing $100 million into its marine terminals in Halifax, N.S. ($80 million) and St. John’s, N.L. ($20 million). In Halifax, the focus is on upgrading its previously deactivated marine terminal, to facilitate the storage and distribution of gasoline, diesel, home heating oil, marine transportation fuel and jet fuel for customers throughout Nova Scotia. In St. John’s, they are building an entirely new pier to improve vessel logistics. The company says the modernized and expanded facilities will create jobs, enhance current services at the Port and help position St.
John’s Harbour for future growth. Most importantly, it means a secure energy supply to the Atlantic Canadian region.
Steve McLaughlin, Senior Director of Commerical Products at Irving Oil, says it’s a case where actions speak louder than words. “We are committed to this region, we have a strong track record in serving our customers safely and reliably across Atlantic Canada and we are making the investments to ensure we can continue to do so.”
Doing the Right Thing
Irving Oil has a long tradition of giving back to the communities where it operates. Each year, employees volunteer well in excess of 1,000 hours (on company time) for causes important to them and the company. The value of corporate donations and sponsorships exceeds $2 million annually, with most of it focused on education, community and environmental initiatives.
Asked why they focus on those particular areas, Sarah Irving, Executive Vice-President and Chief Brand Officer for Irving Oil, explained that these are areas where Irving Oil feels it can make a meaningful difference. “An example of this is our partnership with the New England Aquarium. Our company worked with the aquarium, academia, researchers and government to move the Bay of Fundy shipping lanes in order to reduce the risk of vessel/whale strikes. It’s been an enormous success; the population of the right whale has since doubled.”
“In everything we do, we start with a People Matter philosophy and work from there. This includes our employees and the communities where we live and operate. As a family-owned company, those values are important to every one of us.” •