Since Top 50 Indie group MFG took over Murco’s retail assets in October 2014, the focus to the outside world has been very much on the 228 company owned sites in the deal, which considerably boosted its portfolio of filling stations at the time to 288.
However, the purchase from Murco also included a dealer estate with 210 contracts, and MFG has been noticeably quiet about its intentions for this loyal band of retailers who endured four years of uncertainty while Murco was up for sale.
But that is all changing this is the big moment. MFG is relaunching the Murco brand, with a bright new image, and new supply arrangements in place that will put it back on the map.
Fuels director Jim Mulheran has been working hard behind the scenes for some time and seems genuinely excited that it is all coming together at last. "I’ve been involved with Murco dealers for the best part of 30 years one way or another and the new supply deals give us the opportunity to provide the most competitive deals I’ve ever been able to quote," he says proudly.
He has agreed terms with a number of different suppliers around the country that suit the operation well logistically the network is generally located around Murco’s old terminals and supply points in England and Wales, pretty much from the south coast to the mid Scottish belt, apart from a gap in the Lake District.
The fuel is being sourced from five suppliers Esso, Valero, Phillips 66, Greenergy and Puma (which bought the former Murco refinery at Milford Haven). Another key aspect of the deal is that Murco will collect the fuel.
"We’ve agreed supply arrangements with all those companies across 14 different locations which gives us a degree of flexibility we haven’t had before," explains Mulheran. "We’ve become a wholesale customer of theirs, so we’ve committed to certain volumes at certain locations, which we can happily meet with our existing network. This is tailor-made for our dealer business which we plan to expand.
"The other areas of flexibility that we’re able to offer are in terms of load size, trading terms and in tailoring knowing and understanding the part of the industry that we target for our dealer business. Some of our customers require load sizes that potentially wouldn’t be possible for some suppliers. But suppliers are happy to supply us at the rack, and then allow us to deal with the complexities of load size, trading terms and so on; and the relationship with the customer. This is what we specialise in and can give to our customers."
MFG has contracted to use Turner of Soham’s, whose fleet consists of 14 tractors and trailers of which 11 are the old Murco fleet eight-pot trailers offering the flexibility that a standard ’six-pot’ fleet can’t.
"Because of the nature of our customers’ business, we require a fleet which is more generous, and allows us to carry out more than one load per delivery," explains Mulheran.
But with new supply deals in place, there was something else that needed attention the image.
The Murco brand has a long heritage stretching back to the early 1960s, when the first Murco-branded dealer appeared in the UK, but the existing image has been in place for at least 15 years, and was in need of an update.
"We were aware that if we’re going to be serious about this business and we absolutely are we needed to do it properly, and part of doing it properly is to relaunch the brand," says Mulheran. "The new image looks modern and fresh, with very little for a dealer not to like about it and it’s overdue."
He has written to all the dealers explaining the new supply arrangements, which began on May 23. As dealers are re-signed the old image will be replaced with the new. Current contracts will roll on until they’re re-signed, although he is happy to deal with people ahead of time. Surprisingly only a handful of dealers have left the network during the period since the acquisition, and there have even been some additions.
"Murco dealers are tremendously loyal once they join they tend to stay because of the personal service offered," says Mulheran. "I’m grateful for their loyalty and patience. Over the years our dealers have loved the excellent delivery service they’ve received from Murco; they like the fact there’s generally been a consistency of people to talk to (it is after all, mostly the original Murco team who moved to MFG); they like the flexibility of supply, which is going to be more flexible now than ever before; and it suits the sort of business they do.
"We have various deal types, which tend to be more flexible than most suppliers who just supply on a Platts-related basis. We do that, but we have other deal types which are supported and margin based, and if we’re buying better, that allows us a bit more support for those types of arrangements as well."
Murco dealers will no doubt be pleased at the new developments within MFG. But it has been a tough journey for all concerned.
When MFG completed the purchase on Murco’s retail business, Klesch Refining Limited was lined up to complete the purchase of the operational (refinery) element of Murco a month later. An 18-month supply agreement had been agreed.
"We were relatively relaxed that we were going to have some time to think about what we were going to do," says Mulheran. "Then, as everyone knows, Klesch didn’t complete that purchase, and by the time it was blindingly clear that was the case mid-November our backstop position with Murco was supply until the end of March 2015. And that was it.
"So in my role as fuels director I had four-and-a-half months to secure supply for both company owned and dealer sites.
"Given the time constraints, we did a short-term delivered-in deal with Harvest for our dealer network, which came to an end on May 23. It allowed us to continue to afford our customers the same contractual terms and benefits as they had enjoyed with Murco but it wasn’t without its challenges."
However, it gave the MFG management time to think about what they wanted to do with the Murco dealer operation: "I think it’s fair to say that at the time of the Murco purchase our initial focus was on our company station network.
"That same level of focus is now being applied to our dealer network and there is an unwavering commitment to it," stresses Mulheran.
"We are absolutely committed to doing it better going forward. With CD&R coming into the business last summer, that’s helped to drive commitment to this element of our business as well.
"The company is absolutely behind it, and there’s some pressure for us to do more than just consolidate we need to grow it.
"But we’re more interested in volume than site numbers. We buy in excess of a billion-and-a-half litres a year across the two networks currently. The dealer network accounts for 200 million of that.
"It would be nice if it contributed a little bit more!"
Motor Fuel Group: Independent retailer owned by directors Sej Sejpal, Sharad Raja and Tony Head. In 2011 it was No 5 in Top 50 Indies with 58 sites.
2011: MFG was acquired by Patron Capital and Scottish oil tycoon Alasdair Locke in conjunction with the managment team including Jeremy Clarke, retail marketing director of Murco. Other Murco executives also join MFG, including dealer sales manager Jim Mulheran.
2014: MFG has 60 sites. On October 1 it completed the purchase of Murco’s retail assets, which included 228 company owned sites; and 210 dealer contracts. Murco’s refinery at Milford Haven closes following collapse of sale to Klesch Refining. It is acquired by Puma Energy in March 2015.
March 2015: MFG announces plans to replace the Murco brand on its company owned sites and develop it for dealers.
April 2015: MFG buys 90 Shell sites. Business has grown to 372 company owned sites with BP, Shell, Texaco and Jet brands. No 2 in Top 50 Indies.
2015: Private investment firm Clayton, Dubilier & Rice (CD&R) partnered with MFG management to acquire business from Patron in transaction valued at £500m.