Valero 2004 Annual Report Download - page 17
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Va l e r o E n e r g y C o r p or a t i o n
s u m m a r y a n n u a l r e p o r t
1 5
Va l e r o E n e r g y C o r p or a t i o n
s u m m a r y a n n u a l r e p o r t
PUMPED UP
PUMPINGUPRETAIL/WHOLESALEPROFITS
productintowholesalechannels,italsopaysbecause
ittakesthisproductoutofthespotmarketenabling
thecompanytooptimizemargins.
Anotherareaof
growthhasbeen
Valero’sasphalt
marketingbusiness.
Thecompanysold
morethan56,000
barrelsperdayof
asphaltproductsin
2004,maintaining
itspositionasthe
nation’ssecondlargestproducerandmarketerof
asphaltandachievingrecordearnings.
Becauseofitswinningstrategy,Valeroisnotonly
oneofthenation’slargestretailers,itisnowoneof
themostprofitable.
Initsretailmarketingdivision,Valero’sstrategyhas
beentoinvestinitstop-performingstoresandclose
orsellitsmarginalsites.Asaresultofitsinvestments,
Valerohasrealizedan8percentincreaseingrossprofit
onmerchandisesalesperU.S.retailstoreover2003.
Whilegrowthhasnotbeenthemainfocusofitsretail
strategy,Valerodidbuildnearlyadozennew-to-
industrysitesingrowingmarketsin2004.
Toexpandandimproveuponitsbrandedwholesale
network,Valerolaunchedanaggressivemarketing
efforttosignupnewdistributorsitesandre-image
existinglocations.In2004alone,Valeroadded520
brandedwholesalesitestoitsnetworkandre-imaged
860existinglocations.Whilethecompany’snetwork
hasexpandedfromcoasttocoast,themostsignificant
growthhasbeenalongtheEastCoastwhereValero
hasforgednewterritoryfromMainetoMiami.
And,thecompanyisn’tstoppingthere.Itplansto
buildonthissuccessbygrowingthecurrentnetwork
of2,700wholesalesitestonearly5,000by2007.
Notonlydoesthisstrategypayoffbecausethe
companymakesasignificantupliftbysellingthis
GASOLINE&DIESEL
DISTRIBUTIONCHANNELS
,SeniorVicePresidentofRetail&Specialty
ProductsMarketing,and,SeniorVice
PresidentofProductSupply&TradingandWholesale
Marketing,(lefttoright)overseeValero’ssuccessfulretail
andwholesalemarketingprograms.Theretaildivision
investedintop-performingstores,whichresultedingreater
per-storeprofitsandastrongernetwork,andthewholesale
groupcontinuedtoexpandfromcoasttocoast,adding
520brandedoutletsandre-imaging860existingsites.