Guttman Group Grows Energetically

Pittsburgh Business Times
1 May 2013
By Ethan Lott, Research Director

Guttman Group of Cos., based in Belle Vernon, has grown in the past 20 years from a $127 million company (then Guttman Oil) to a holding company for three energy-related businesses with revenue of $3.4 billion.

On Monday, Guttman announced that it is creating a retail energy supply company, Guttman Energy, to provide natural gas and electricity services to commercial and industrial customers. Guttman plans to obtain licenses to become a retail energy provider in Pennsylvania and Ohio. Guttman Energy will be a division of Guttman Oil, one of Guttman Group's three operating companies.

Guttman's three companies are Guttman Oil, a petroleum marketer operating in 14 states; Source One Transportation, a fuel transportation provider; and Bulk Terminal Solutions, which operates bulk terminals in Ohio, Pennsylvania and West Virginia.

The company’s origins trace back to 1931 when Jacob Guttman, a butcher shop owner in McKeesport, built a Texaco gas station in McKeesport. Over the ensuing decades Jacob and two subsequent generations of Guttmans built the company’s Texaco distributorship and diversified into businesses that complemented the core petroleum business and became key components of the company’s strategy and growth, including automotive supplies, welding supplies, lubricants, river towing, transportation, convenience stores and bulk terminal operations.

The Business Times asked Guttman Group CEO Alan Guttman about the company's evolution during its 82-year history in the region and about Guttman's expanding role in the region during this energy renaissance.

Q: To what degree has the importance of fuel management grown over the past five, 10 or 20 years? Why do companies have to concern themselves more with fuel management now and how has Guttman filled that role?

A: Fuel management has grown considerably in importance for a couple of reasons. First, volatility in fuel prices has increased dramatically over the last 20 years. Companies need to carefully manage their fuel purchases to reduce their exposure to price swings that are larger and more frequent than they were in the past. The Guttman Group companies address the critical aspects of the petroleum supply chain, including the marketing, transportation and storage of fuel. Through risk management and inventory management programs, our companies help customers reduce their exposure to price volatility by enabling them to most effectively purchase fuel and ensure they have a reliable supply of fuel at competitive prices. In addition, our geographic reach (14 states in the eastern United States) allows us to serve companies’ remote needs with centralized control.

Second, regulations over the last 5-10 years have introduced ethanol-blended gasoline and biodiesel into the market. Outside influences such as water, air temperature, and microorganisms can adversely affect these fuels, leading to operability challenges for fuel users. Guttman Oil helps customers deal with these challenges through consultative programs that involve sampling and testing of fuel and remediation of operability issues.

Q: The new division, Guttman Energy, moves Guttman into the retail energy supply business, one that is adding new players every day. How does Guttman's expertise and history in commercial fuel management translate into the retail market? Is the focus here on natural gas or does Guttman anticipate jumping into the electricity market as well with both feet?

A: While the retail energy supply market is different from the petroleum market, the two share certain characteristics, such as the need to manage exposure to price volatility risk. The decades of hedging and risk management expertise that Guttman Oil has honed in the fuel market can be leveraged in the energy market. In addition, many of the commercial and industrial customers that purchase fuel from Guttman Oil have natural gas and electricity needs that Guttman Energy can fill. Guttman Energy will be a retail energy supplier of both natural gas and electricity for commercial and industrial end users.

Q: Over the past two decades, according to the Business Times Book of Lists, Guttman went from a $127 million revenue company to a $3.4 billion firm, growing 26-fold. How did Guttman manage that level of growth as a family business?

A: Through a combination of timely entry into complementary businesses and the hiring of talented employees. The Guttman Group has fostered growth by either creating or acquiring businesses that complement the corporate vision and strategy. Solid hiring and developmental practices ensure that employees can seamlessly and successfully step into new roles in order to build and lead the new businesses.

Q: As Guttman looks forward, do you foresee needing to look for large acquisition/merger partners or to look to the public markets or do you see Guttman remaining a family-owned private business?

A: We expect to remain a family-owned private business while always looking into new business opportunities (either organically grown or acquired) that would help achieve our companies’ strategic and growth objectives.

Q: Much energy-related attention is focused on the Pittsburgh region right now. What is Guttman's primary role in the shale gas chain, how has that role evolved over the past five years and how do you project it looking forward?

A: The Guttman Group companies are actively involved in the shale gas industry. Guttman Oil markets fuel to companies involved in drilling and other oil/gasfield activities. Source One is involved from a transportation standpoint. Bulk Terminal Solutions is actively pursuing opportunities related to the storage of not just fuel but other resources critical to the shale gas industry. Part of the evolution of this industry over the last few years is the introduction of natural gas as an alternative to diesel fuel for the drilling rigs, equipment and vehicles required to produce shale gas. Looking forward, Guttman Energy is well positioned to capitalize on this transition by supplying natural gas to shale customers.

Ethan Lott is research director at the Pittsburgh Business Times. Contact him at or 412-208-3823.