Valero 2003 Annual Report Download - page 20

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17
top฀wholesale฀&฀retail฀strategy
Gene Edwards, Senior Vice President of Product Supply & Trading and Wholesale
Marketing, and Gary Arthur, Senior Vice President of Retail & Specialty Products
Marketing, (left to right) helped lead wholesale and retail marketing to achieve record
earnings. Valero’s wholesale network grew to 2,400 branded distributor sites, and the retail
division invested in re-imaging stores which resulted in greater prots with fewer stores.
Because฀of฀its฀successful฀marketing฀strategy,฀Valero’s฀retail฀and฀wholesale฀divisions฀topped฀their฀past฀
performance฀by฀reporting฀record฀earnings฀in฀2003.
In฀retail฀marketing,฀Valero฀has฀successfully฀executed฀its฀strategy฀of฀investing฀in฀top-performing฀stores฀
and฀selling฀or฀closing฀marginal฀sites.฀฀To฀date,฀about฀one-third฀of฀the฀network฀has฀been฀re-imaged฀and฀
the฀vast฀majority฀of฀the฀remaining฀stores฀should฀be฀completed฀by฀2006.฀฀As฀a฀result฀of฀gains฀in฀fuel฀
and฀merchandise฀sales,฀Valero฀expects฀a฀15%฀return฀on฀capital฀employed฀for฀these฀newly฀re-imaged฀
locations.฀฀฀
While฀retail฀has฀been฀working฀to฀rationalize฀its฀network,฀wholesale฀has฀been฀aggressively฀growing฀its฀
branded฀distributor฀network฀across฀the฀country.฀฀In฀2003,฀Valero฀added฀more฀than฀600฀new฀branded฀
sites฀ and฀ re-imaged฀ over฀ 800฀ new฀ and฀ existing฀ locations.฀ ฀ A฀ big฀ part฀ of฀ that฀ expansion฀ included฀
introducing฀ the฀Valero฀ brand฀ on฀ the฀ East฀ Coast฀ –฀ giving฀ the฀ company฀ a฀ presence฀ from฀ Bangor,฀
Maine,฀to฀Miami,฀Florida!฀฀฀With฀2,400฀branded฀distributor฀sites฀in฀the฀network฀today,฀Valero฀is฀well฀
on฀the฀way฀to฀reaching฀its฀goal฀of฀5,000฀sites฀by฀the฀end฀of฀2007.฀฀Because฀capital฀costs฀are฀relatively฀
low,฀Valero฀can฀achieve฀signicant฀growth฀with฀minimal฀capital฀and฀expected฀returns฀in฀the฀range฀
of฀20%.฀
Also฀reporting฀signicant฀ growth฀last฀ year,฀ asphalt฀ marketing฀sold฀a฀ record-breaking฀22.6฀million฀
barrels.฀฀And,฀the฀company฀continued฀to฀grow฀its฀lubes฀and฀petrochemicals฀business฀through฀favorable฀
partnerships฀and฀agreements.฀฀
฀
As฀these฀results฀illustrate,฀the฀company’s฀marketing฀strategy฀is฀helping฀to฀put฀Valero’s฀brands฀on฀top!