New operating company to boost value: Ultramar

Daniel MacEachern dmaceachern@thetelegram.com
Published on June 12, 2013
An Ultramar station in Kelligrews. Ultramar’s service stations are being run by a new operating company. — Telegram file photo

The spinoff company now operating Ultramar gas stations said customers should notice no change at its dozens of locations across Newfoundland and Labrador.

Last month, the Texas-based Valero Energy Corp., Ultramar’s parent company, created CST Brands to operate its fuel and convenience store operations independently of its refinery operations. Valero supplies fuel to several thousand gas stations across Canada, the U.S. and the U.K. under several different brands, including Ultramar, Beacon and Texaco.

 A spokesman for CST Brands said the separation of the refining and retailing assets — convenience stores attached to the 63 Ultramar stations in Newfoundland and Labrador operate under the name “Corner Store” — would increase value for shareholders and allow a single company to concentrate solely on retail operations. The change in operation, he said, won’t mean any closures.

“We’ll keep the same number of employees. All 63 sites remain the same,” said Pierre Tessier.

“We actually started to invest a lot of money last year in all the changing of the branding at all the sites, so we will pursue that as well this year. But there’s no change at all in terms of the impact on the consumer or the market itself.”

CST is a corporate identity created to develop a company that specializes in retail operations and focus on its own products like Transit Café coffee.

“It’s mostly to create value for shareholders, first of all,” he said, “but also to become like a real retail company that is the exclusive distributor of Ultramar fuel, and that will enable the company to really develop a bigger footprint in the retail business.”

The company was officially launched in May, and enters the market with a large footprint already. About 1,900 sites in the U.S. and Canada and $13.1 billion in revenue last year, making it the second-largest publicly traded fuel and convenience retailer in North America, behind Couche-Tard, the parent company of Mac’s Convenience Stores.

Valero spokesman Michel Martin said Valero shareholders were issued shares in CST Brands based on their stakes in the original company.

“Valero is not what we used to call an integrated oil company — we’re not present in the upstream sector. We’re refiners and distributors of oil products and used to be in the retail segment, but not anymore. The purpose was to enable both segments of the business — the refining and distribution and the retail operations — to have more flexibility in being able to allot their resources, capital, make investment decisions in line with their own respective priorities and goals.”

dmaceachern@thetelegram.com

Twitter: @TelegramDaniel