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
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
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
Ethan Lott is research director at the Pittsburgh Business Times.
Contact him at firstname.lastname@example.org or 412-208-3823.