PROFILE - HIGHTOWERS PETROLEUM COMPANY

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HIGHTOWERS PETROLEUM COMPANY

President and CEO Stephen Hightower is proud that Hightowers Petroleum Company (HPC), based in Middletown, Ohio, is the nation’s largest African American-owned wholesale fuel distributor. He is even prouder to say, “The image of a Black business doing things that non-minority companies have dominated, serves as a role model for young people. “When they see our signs out on the highway, it shows possibilities and builds self-esteem to Black youth and inspiring entrepreneurs.”

HPC’s impact now extends to marketing activities in all 50 states plus Canada, Mexico, and South Africa. Customers include many of the biggest names in corporate America— Duke Energy, General Motors, Nissan, Honda, FedEx, Delta Airlines, AT&T, Power Team, The Kroger Co, Vistra Energy, and more. “We’re a formidable competitor and a great partner in our own right,” Hightower reports. “We do business with major oil companies, major jobbers, family-owned businesses, servicing national customers because we care about our customers and wake up every day seeking to earn their respect, and in doing so, the industry’s respect.”

But with its national and even global reach, HPC also keeps a focus on its home base of Greater Cincinnati and Northern Kentucky. “As a mature business, we can be a role model and employer for young African American talent, beginning a new cycle of success,” Hightower explains. “We can hire people out of our community and provide visibility to an industry that few have seen or participated in. That’s how we expand future diverse talent in the industry, giving them a chance! Once they see a nationwide company owned by people of color, they know what’s possible and have something to strive for.”

In recent years, Hightower notes, “We’ve seen more diversity of ownership, including Black ownership, in the petroleum business itself.” Some of these entrepreneurs, he continues, have come to us. “You can’t help everyone, but that exceptional entrepreneur exists. If they have the character and drive to succeed, we try to help with the tools to provide the opportunity. And there have been successes—where for a long time, we were the only Black-owned petroleum wholesaler.”

How HPC combines a national footprint with a local heart and family ownership is captured in a recent customer testimonial. “Hightowers Petroleum is doing things for us that the larger petroleum companies wouldn’t even attempt to do,” reported Burt Durstock, purchasing team lead for Duke Energy. “A lot of logistics, planning, and services are needed any minute of any day, and they always make us a high priority. I like dealing with them. They’re personable and they bring small town business ethics into the picture.” As a buyer providing Hightowers Petroleum an early opportunity to grow nationally, customers like Burt Durstock and his team of Cinergy and later Duke Energy, had the biggest impact by providing HPC the understanding of discipline, rapid response, and 24-hour availability for industrial companies with high demand. “We salute the many Burt Durstock’s, the Ron Reising and Mary

Huller’s of Cinergy, and many corporate America executives that followed and gave Hightowers Petroleum Co. a chance, time and time again, and we didn’t let them down!”

Hightower affirms that approach. “What differentiates us is how we outwork our competitors,” he says. “We’re there when needed, when others are not—for example, with our emergency response services.” As a case in point, he cites Ohio’s 2020 lockdown to prevent the spread of the coronavirus. HPC worked overtime to keep its supply chain intact and provide fuel to the state’s highway patrol, hospitals, power utilities, and grocery stores.

Service is also personal for Hightower. He recalls 2019 when tornadoes destroyed homes, left thousands without power, and wrecked municipal water systems around Dayton, Ohio. HPC called on The Kroger Co., one of its fuel customers, to partner in providing impacted families with toilet paper, infant supplies, personal care items, granola bars, and canned goods.

“I’ve been around in business for nearly 40 years,” Hightower relates. “Longevity carries a responsibility and a mindset to give back. However you contribute, you have to do something. We’ve worked with dozens of nonprofits—for example, I was appointed as a board member to the National Parks Foundation. During my tenure I started–on behalf of the National Park Foundation and owned by Hightower Family Foundation–a campaign to engage the African American Philanthropy and participation in the parks. The program ‘One Million African American Youth in The Parks’ was a very effective campaign and has spurred several types of African American marketing campaigns and camping groups enjoying our national parks. As a company, we’re guided by the principle that we have a higher calling. That’s the basis of sustainability!”

Three Growth Strategies

Prior to the pandemic, HPC yearly revenues hit $499 million, putting the company in reach of half a billion dollars. But with the automotive sector as one of its larger customers, fuel volume dipped slightly in 2020-21 as manufacturing slowed due to shortages of computer chips and auto parts. Nevertheless, across North America and South Africa, HPC anticipates growth in sales and diversification in fleet vehicle fuels.

Hightower EV Solutions LLC, was conceived a little more than a year ago when it was apparent that electric vehicles will soon replace a significant volume of its customers’ fleet. As a result, Hightower EV Solutions LLC, developed a turnkey “Managed Service Provided” solutions to its commercial and retail partners, as a “Value Added Reseller” to a variety of

charging technologies depending on the customer’s application. Its services range from assessments, permitting, installation, service, and maintenance. www.hightowerev.com.

HPC has been careful not to depend on any single sector for its volume. In addition to the automotive industry, the company has a diverse portfolio of customers in construction, consumer goods, education, energy, gaming, healthcare, manufacturing, military, retail, sports, state and local governments, transportation, and water treatment.

HPC services span bulk fuel delivery, mobile refueling, fleet solutions, emergency fuel and disaster response, inventory management, and supply chain management. Customers can access a full product line of gasoline, diesel, distillate additives, diesel exhaust fluid, and alternative fuels, including liquid natural gas. Through contracts, fixed pricing, and hedging options, end users can control and lower their fuel costs.

“Any business is complicated and challenging,” notes Hightower. “We provide a level of service so that our customers have peace of mind. With us, they can cross their fuel supplier off their ‘to-beconcerned-about’ list.”

HPC’s approach with a we try harder attitude is evident. To name just two examples, General Motors has recognized HPC as a Supplier of the Year and with its Top Diversity Performer Platinum Award. And Duke Energy has given HPC its Supplier Excellence Award and recognition as a Diverse Supplier of the Year.

Over the past decade, honors have also been bestowed on HPC and Stephen Hightower from Rainbow PUSH “Living Legend Award”, Black Enterprise top “10” Black businesses in the country, Dan Beard Boy Scouts “Good Scout Award,” Feed the Hungry, Ohio Minority Supplier Diversity Council “Supplier of The Year,” Ohio Legislative Black Caucus, National Caucus of Black State Legislators “Corporate Achievement and Image Award,” Featured on CNBC’s “Blue Collar Millionaire,” Cincinnati USA Innovation Awards, Cincinnati Business Courier, Dayton Business Journal, and others.

Hightower says the growth of HPC has been meteoric. Fifteen years ago, annual revenues stood at about $70 million. Over the next ten years, that figure nearly quadrupled by 2017 to an impressive $260 million. Then in 2018, business mushroomed by 60 percent

to top $415 million for the year. By 2019, the year before the pandemic, revenues reached $499 million. And once the pandemic subsides, HPC has set its sights on becoming a billion-dollar company.

“Our plan to get there,” Hightower relates, “starts with maintaining and growing our core, existing downstream business. Then in addition, we’re looking to enter the upstream market by selling crude to the refineries and bulk fuels. This will allow us to increase our volume and margins.”

A third growth strategy is already in progress. Newer companies like Hightower EV Solutions LLC. aid retail and commercial clients in converting to electric vehicles. HP Energy assists customers in leveraging technology to reduce their energy costs. And Hightower OM Transport LLC, was created by Steve and a customer who was facing challenges in transportation that had never been experienced before to expand the organization’s fleet.

Finally, Hightower continues to look for sustainable solutions in the liquid fuels market to support the environmental goals they have set for themselves and their never-ending challenges to help their customers design a pathway to becoming carbon neutral. Significantly, Hightower’s plan is to focus on organic growth rather than rely on acquisitions. “We grow by keeping our eye on the ball—the customer,” he states. “And in saying that, we also respect and support our supply chain just like our customers. Strategic alliances and partnerships are the methods we are engaging to balance that growth.”

As for putting a company structure in place to handle rapid growth, Hightower says, “We don’t have retail operations or a refinery. Instead, we sell bulk fuels to a diverse market sector. So, our business growth isn’t exponentially labor-intensive. It’s about service, accounting, logistics, and how we buy fuel. I’ve learned as a CEO that having quality people, and then empowering them, makes my job easier. Our top team is truly solid.”

HPC joined SIGMA in 2004 and Hightower credits the association with a key role in his company’s growth. “It’s difficult for anyone, black or white, to enter the petroleum industry,” he observes. “The business is so relationship-driven that you’ve got to have a way of surviving until you build up those relationships.”

Hightower recalls his first SIGMA meeting. “What stood out to me,” he says, “was everyone’s great willingness to share their ideas and introduce me to other people.” The experience “was

overwhelming and made me want to be a part of the association. The people you meet in SIGMA are knowledgeable, and their willingness to share themselves and be a support network went beyond what I expected.” And Mary Alice said to me after the first meeting, when I wasn’t sure if I would attend the winter meeting, she said to me “you need to be at everyone one of the meetings,” and so I did and I really got involved and loved it.

Back then, Hightower was “one of the few, maybe the only, African American in independent marketing. So, it was very special to me how SIGMA welcomed us.” Since then, Hightower has served the association on multiple committees. And nearly 20 years after HPC became a member, he continues to see SIGMA as “the one organization that was a pathway that allowed us to succeed in the industry.”

HPC is involved in many industry organizations. One reason, Hightower explains, is the principle of “exponential marketing strategy.” Introduced to him by Jay Abrams, a marketing consultant he met at Tony Robbins, the concept holds that in mature industries where customers generally know each other and spend time together two to four times a year plus committee meetings, you get to know the room and the room gets to know you. “Successful marketing is who you are and how you appear, what others say about you, and who you can touch at any given moment in life. It’s less about the product generally,” Hightower relates. “Exponential marketing is trusted relationships built up in organizations trade, political customer networks, etc., that represent buyers, sellers, or influencers. And in those organizations, you become the fabric of those organizations where everyone knows who you are or knows of you, and everyone respects you based on trust, loyalty, and historical performance. You now have hundreds of sales associations speaking your praises when someone is seeking a fuel supplier or a diverse person in the industry,” he continues.

“If the name Hightower is not spoken in those strategically selected well marketed trade organizations, customers, suppliers, or influencers without me being in the room, then we haven’t worked hard enough. There should be HPC champions exponentially referencing Hightowers Petroleum Co., with the offer to assist in connecting myself or someone in our company. Quite honestly this is how we continue to grow opportunities in a COVID period. You can’t be everywhere all the time; however hard you work. And you can’t sell yourself like a satisfied partner can. Through our organizations, we develop relationships that result in getting referred globally.”

Now that HPC is a maturing company after 40+ years, Hightower says that SIGMA membership continues to be highly valuable in new ways. “By being involved and going to meetings,” he reports, “we build relationships with great suppliers of the products and support services we need. That’s why I say that, between the professional education and the networking, SIGMA is the organization where we’ve found all that we need.”

Building Relationships

Having a national presence, reaching a volume of nearly half a billion dollars—and setting sights on becoming a billion-dollar company—is a long way from where Hightower started. The HPC story begins in 1957 when his father Yudell founded a janitorial services firm.

“Dad ran the company while also working at Armco in the steel mill,” Hightower recalls. “So, I could see how small business worked while I was growing up. Dad and my mother Elsie, his partner and wife, also taught me a strong work ethic and put me to work from the age of six. By 16, I was a crew leader. By 18, I negotiated my first commercial account.”

In 1979 at the age of 20, Hightower launched his own union construction clean-up business. Two years later, he purchased the family’s janitorial firm from his father, sold it in 1983 and in 1982, came the opportunity that provided the first petroleum contract.

“I didn’t know anything about petroleum,” Hightower acknowledges. “But we had a chance to get the government contract for supplying gasoline and diesel to every state agency in Ohio.” Undaunted and transactional, he found and purchased product from a nearby supplier. Shortly thereafter he began going to Ohio Petroleum Marketers Association meetings and formed important strategic partnerships. Then in 1984, he incorporated Hightowers Petroleum Co.

A year later, Hightower was supported by BP Oil as a “Contract Carrier for Property” securing it’s PUCO “Public Utilities Commission of Ohio” authority to carrier jet fuel to its customers. “Even then special people like Dennis Nash, later founder of Advantage tank lines, worked with me as an

account manager with BMI, to help me carry out that contract. I am now able to supply commercial fleets in every state in the USA,” Hightower recalls. As his client base grew, Hightower had a vision that reached beyond his home state. “By then, we had built up solid expertise in supply chain management,” he notes. “So, we could use the power of E-commerce to do business on a national basis.”

To achieve that vision, Hightower also leveraged the power of relationships. “One of our suppliers, Fuel Quest, gave us the information technology component and the ability to engage a national model,” he relates. By 2002, HPC won first enterprisewide customer, Cinergy, and then Duke Energy which vaulted HPC onto the national stage.

To handle its rapid expansion, Hightower says, “We stressed maintaining our existing supplier relationships, even as we started new ones. The petroleum business is all about relationships. The industry is tight. If you treat one supplier wrong, then all the other suppliers will know. We put a premium on being honest with everybody—and that remains key today.”

In the 2000s, HPC’s main challenge to further expansion was access to capital. “We buy our fuel mostly from the racks around the country,” Hightower explains. “So, we’re historically not a strong asset-based company, which meant we didn’t have much we could collateralize.” But through relationships, exponential marketing—and relentlessly superior customer service—HPC has become the nation’s largest African American-owned wholesale fuel distributor.

Looking to the Future

Hightower sees a concerted effort ahead to promote electric vehicles—and HPC has gotten ahead of the curve by forming Hightower EV Solutions. “But I don’t think the marketplace will react quickly. There are just too many vehicles on the street to do away with gasoline,” he believes. “It’s too early to turn our back on investing in efficiency of the internal combustion engines (ICEs). There is clearly a lot of runway for ICEs on the road for many years to come and to take 100% focus away from investing in efficiencies of this existing engine is a mistake in my opinion, due to the magnitude of engines that exists today and that are being produced globally today,” Hightower says.

“Alternative energy is much more expensive, and it has an adoption period. The public has to buy into it. Moving too fast can disrupt the existing supply chain that offers reliable home heating, home electricity, and industrial power,” Hightower points out. “How much can you push electric vehicles when, for example, most people outside of the United States have less than 25% of their population with access to reliable electricity? Raw materials alone may hit a major shortage before we are able to ‘mine’ the raw materials necessary to produce the batteries necessary to take the place of all of the ICEs in America today.”

While global warming must be addressed, Hightower believes measures must be responsibly phased in to avoid disruptions and pricing people out of the energy they need. “There must be enough demand for alternative fuels,” Hightower observes. “And human behavior must catch up—that is, people must get comfortable to wait 20 minutes at the station to recharge their vehicles. If they don’t have home chargers or garages for overnight charging. The solutions have to be all inclusive and all technologies need to move together in a zero emissions economy, including the petroleum sector.” “Demonizing the oil and gas industry and withdrawing research and funding for ICE efficiency, exacerbates the problem,” he concludes.

The future for HPC itself means carrying on the Hightower family legacy while bringing new generations into the business. “Until Mom died three years ago,” says Hightower, “we all gathered at her house every Sunday. My dad Yudell is 89 and now lives with my wife Bernita and me. Bernita also has her own fuel supply business—Next Generation Fuel—and in general, she keeps me balanced! There is no substitute for an understanding life partner!”

Son Stephen Hightower II today is HPC’s chief operating officer, while daughter Stephanie Hightower Thomas handles bidding and contracts. Oldest son Quincy is president of the family’s Hi-Mark Construction Group. And back at HPC, nephew Jason Hightower directs information technology as Chief Information Officer. Meanwhile, a fourth generation is in the offing as grandchildren Jasmine and Jadlynn Hightower Thomas work part-time in accounting and operations while they attend college.

Hightower believes one factor that holds back the growth of the African-American business community “is that it’s not traditional for kids to grow up around the family dinner table talking about business issues. That’s why we don’t see as many second- and third-generation businesses in the black community.” Instead, the key to multi-generational companies is “teaching our kids a strong work ethic at a young age, not after they’re already grown up.”

In this, too, the Hightower family is a role model for others. “And I’ve got to do my part,” Hightower confesses. “You can’t just ‘allow’ your kids into the business so that you can retire. You have to hold them accountable—as you hold yourself accountable—to perform the best you can, everyday! Being in business involves everything from operations to relationships. It still goes back to all the other 50 associates that makes your company what it is. Without that team of dedicated professionals, none of our success would be possible. You must be willing to put in the time and the work to have a successful outcome! None of it is automatic, free, or without tremendous effort! It helps to have God as your companion!” H