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An Historical Perspective of Irving Oil
After honourably serving in the Royal Flying corps during WWI, a determined and enterprising young man named K.C. Irving returned home to Bouctouche, New Brunswick. Quick-minded and mechanically inclined, this former Acadia University student chose to make his own way in the world rather than join his father at his general store in Bouctouche.
K.C. believed that a strong work ethic and outstanding customer service would be the keys to his success. Beginning with a small service station that sold Esso gasoline and served as a Ford sub-dealership, customers soon came to know and appreciate K.C.'s industrious and friendly manner. His belief that "if you take care of the customer, the customer will take care of you" resulted in him attracting a significant share of the automobile business in town.
Pressure from other local dealers led Imperial Oil, Esso's parent company, to set up another Esso dealer in the town. K.C. responded by handing back Esso their sign, putting up his own sign and competing head-to-head with the new Esso Dealer. This was the beginning of what would become Irving Oil.
K.C. acquired his own gasoline which was blended with a higher octane level. This made the common hand-cranked engines of the day easier to start. He branded his premium gasoline product Primrose and had it painted on the gas pump globes in front of his station.
K.C.'s mechanical knowledge and innate ability to foster long term relationships also made him a very successful Ford dealer. Impressed by his drive and good salesmanship, the 24-year old K.C. was awarded a Ford dealership in Saint John, New Brunswick in 1924. K.C. moved to Saint John with his wife Harriet and installed Irving fuel pumps in front of the dealership.
It was from these humble beginnings that K.C. Irving began to develop a gasoline retail network and in 1925 he built his second service station.
With the advent of the internal combustion engine and the growing accessibility of the automobile, K.C. sensed he was on the ground floor of a booming industry and set his sights on making the most of it.
Throughout the 1930s muddy, rut-filled roads were being paved over to make way for more and more vehicles. K.C. logically deduced that it just made sense to locate gas stations where the cars were and located his service stations at the entrances of towns. In fact, K.C. created unique signs to welcome visitors with the name of the town appearing within the Irving diamond. He also included a memorable tagline that read, "Follow the Irving signs and you can't go wrong."
When offering franchises to people, K.C. carefully chose who would represent him and Irving Oil in local towns. He sought out known athletes who shared his ambition, competitiveness, work ethic and vision of customer service. This leveraged the good will of dealers and increased the trust and liking from customers - a practice Irving Oil still tries to leverage today.
At this same time, K.C. began packaging his own line of Irving lubricants in glass bottles. These bottles were factory sealed and free of contaminants. Based on the practice used to seal milk bottles, this unique feature insured quality and helped differentiate K.C.'s products from the competition.
K.C. knew the virtues of controlling and managing costs and when railways kept increasing their rates he began locating supply terminals along the ocean as an alternative to importing by rail.
With the postwar boom, Irving Oil continued to expand into the province of Quebec. And when Newfoundland became a part of Canada in 1949, another new market was made available.
A Family Tradition Continues
After attending Acadia University, K.C.'s son, Arthur, joined Irving Oil in 1951. His brother Jack soon followed in 1952. Both Arthur and Jack Irving traveled extensively together to learn and see for themselves how retail operations were conducted in different markets and by competitors. Jack Irving was known to photograph everything they saw so that new ideas and concepts could be brought back and incorporated into Irving Oil's goal of increasing value to its customers.
With guidance and coaching from his father, Arthur's business knowledge and personable nature made him ideal for signing up more franchises and converting existing stations to the Irving Oil brand. Arthur's brother, Jack, began managing construction and engineering projects, including retail outlets, bulk plants, and other major infrastructure.
By the mid '50s Irving Oil had terminals from Montreal to St. John's, Newfoundland. More and bigger tankers were bringing in their petroleum supply from South America and the U.S. Gulf coast refineries.
By 1957 K.C. Irving's success in growing Irving Oil had quietly gained the attention and respect of the major oil companies who were busy exploring and developing oil fields around the world. With Irving Oil's successful marketing capabilities and access to deep water from their Saint John port location, K.C. saw an opportunity to partner with Chevron's expertise to build a refinery. It was a win-win proposition for both as Chevron secured demand for its crude supply coming online and Irving Oil was able to expand into the refining business. K.C. Irving sold 49% of his company to Chevron to build the refinery and it was officially opened on July 20, 1960 with an initial capacity of 40,000 barrels a day.
During the 1960s, Irving Oil was proud to refine its own products to supply its customers. The refinery gave Irving Oil more credibility in a marketplace filled with larger competitors such as BP, Gulf, Fina, Texaco, Shell and Esso, among others.
In addition to being Canada's Centennial Year, 1967 was also the year the Trans Canada Highway (TCH) was completed. To capitalize on this opportunity, Irving Oil opened restaurants complete with gas pumps along the section of the TCH that stretched from Newfoundland to Montreal.
In 1971 the refinery was expanded and production increased to 160,000 barrels a day. This move helped Irving Oil expand beyond heating oil and gasoline to become a major supplier of industry-specific specialty products including jet fuel for Air Canada, asphalt for the road building industry, and bunker fuel for power plants and pulp and paper mills.
An Era of Change
1972 saw the end of one era and the beginning of another when K.C. Irving retired. After 52 years, his son Arthur took over as president at the age of 42. Like his father, Arthur used his knowledge, enthusiasm and people skills to create opportunities for Irving Oil. At the same time, Jack Irving was named Executive Vice President. Leveraging its excellent supply capacity and the advantage of being a low-cost producer, it wasn't long before Irving Oil passed Imperial Oil/Esso as market share leader.
The 1970s were a time of change and experimentation in gas retail marketing. The industry was in a growth mode offering consumers various combinations of restaurants with gas pumps, service stations with gas pumps or just simple stand alone gas pump islands. During this time Arthur Irving successfully developed a convenience store chain concept (begun by his father) in the 1960s called Maritime Product Bar. These stores were expanded in size from 1,000 to 2,500 square feet and carried a wide variety of convenience store items in addition to selling Irving gasoline. The name was later changed to Marimart.
A second refinery expansion in 1974 increased production to 250,000 barrels a day and put the refinery on a world scale. In 1977 Irving Oil was the first refinery to offer Canada unleaded gasoline, and its reputation as a producer and distributor of high quality products continued to grow.
During this time Irving Oil commissioned four new tankers to be added to its existing fleet of six. Two of the tankers, the Irving Arctic and the Irving Eskimo, were icebreakers used to deliver product up through the frozen St. Lawrence River and the high arctic.
The recession of the 1980s saw oil companies gaining market share through consolidation as Petro Canada (created by the Canadian government) purchased BP, Fina Canada and Gulf Canada. Gulf Canada's Atlantic Canadian assets were then sold to Ultramar. Imperial Oil bought Texaco and sold their Atlantic Canadian assets to Ultramar. Irving Oil looked to the U.S. for expansion.
Arthur Irving was an advocate for free trade with the U.S. and when it was officially established between the two countries, the door opened for Irving Oil to enter the home heat and convenience store market in the U.S. without government duties being levied.
Given that 80% of the homes in Maine were heated with oil, purchasing a marine terminal in Searsport, Maine gave Irving Oil access to the Maine market. With a controlling interest in a second terminal in Portland, access to the entire Maine market was secured.
In 1986 Irving Oil acquired D.W. Small, a jobber that operated a chain of U.S. retail stores called Maineway that appeared mostly under the Mobil and Texaco brands. These sites were re-branded Irving and gave Irving Oil a platform from which to grow in New England. This acquisition is the origin of the Mainway name.
Through an aggressive construction and acquisition program, U.S. sales became a major contributor to Irving Oil's overall sales. Since U.S. operations were completely owned by the Irving family, a separate Irving logo was developed to distinguish itself from Canadian operations which had Chevron as a partner.
In 1988, all of Chevron's shares in Irving Oil were bought back. With the desire to pursue different business strategies, the 28-year partnership came to an amicable end that both parties found mutually beneficial.
The 1980s also saw the arrival of Irving's PROCARE service centers; a new concept in auto care that featured four service bays and a large parts inventory. These service centers were staffed by certified mechanics who could perform sophisticated maintenance and repairs. While the PROCARE service centers showed promise, lower customer repeat frequency due to changes in car engine technology effectively shrunk the auto care market. Concurrently, the convenience retail model was expanding as operators welcomed the additional revenue and profits from non-petroleum categories such as beverages, dairy and groceries.
For Irving Oil the focus for the '90s remained on strategically deploying company capital to maintain market share in Atlantic Canada and grow market share in New England.
In 1997, Irving Oil invested over $1 billion to upgrade its refinery. A large residual catalytic cracker unit was installed that featured state-of-the-art technology and a crude unit with stainless steel metallurgy were just two of the new processing units included with this upgrade. Nicknamed "The King of Cats", this improvement increased the refinery's capacity to refine heavier, more acidic crude oils from around the world. Through this project and other significant enhancements, production increased to 300,000 barrels a day.
In 1997, Mitsubishi Industries delivered two double-hulled super tankers to Irving Oil named the Irving Primrose and the Irving Galloway. These double-hulled ships were unique and strategic to Irving Oil because their limited availability, efficiency, and environmental safety made these vessels attractive to other shippers in the charter market where they commanded a premium price.
Two new Irving marine terminals came online in 1998. One located in Revere, Massachusetts (just north of Boston) and the other in Portsmouth, New Hampshire. It was not long afterward that Irving Oil became the largest fuel supplier for Logan Airport and a major supplier for surrounding regional airports.
The new processing units that were part of the "King of Cats" upgrade enabled Irving Oil to bring ultra low sulphur gasoline to the market, and it did so five years ahead of governmental regulation. Irving Oil could also meet the state of California's higher environmental standards for clean gasoline, and it became a major exporter into that state. In 2003, Irving Oil became the first oil company ever to be recognized with a Clean Air Excellence Award by the US Environmental Protection Agency (EPA) for producing low-sulphur fuels ahead of regulation. Irving Oil is an industry leader in reducing air pollution, making cleaner burning fuels, and consistently improving environmental performance.
Irving Oil has partnered with Repsol YPF on the Canaport LNG receiving terminal in Saint John, N.B. This structure has achieved an initial send-out capacity (the ability to distribute via pipeline) of 28 million cubic meters (one billion cubic feet) of liquefied natural gas a day. The Canaport LNG terminal was the first new LNG terminal on North America's east coast to receive environmental approval, ahead of more than 25 projects vying to supply the U.S. Northeast market. The terminal began operations in June 2009 and its design meets or exceeds the high municipal, provincial and federal safety and environmental standards and regulations.
Irving Oil is one of today's leading regional energy companies with a refining capacity of 300,000 barrels a day, over 700 fueling locations, and operations from 13 marine terminals. Irving Oil supplies wholesale, commercial, and retail customers throughout Eastern Canada, Quebec, and New England.
Today, Arthur Irving continues to play a vital role at Irving Oil as its Chairman and assists with the transition of responsibilities to his sons. As Chancellor of Acadia University since 1997, he is actively involved with the school and promoting the K.C. Irving Environmental Science Center and the Harriet Irving Botanical gardens. He is an avid sportsman who enjoys canoeing in the Canadian arctic and is an honorary member of Ducks Unlimited - an organization dedicated to the conservation of wetlands, land management and migratory birds. He joined them in 1976 and became its Canadian president in 1988.
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