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Hightowers Petroleum Company

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Stephen Hightower, CEO of Hightowers Petroleum

Blazing New Trails and Making History

By Alfonzo Porter, Ed.D.

 

As the only national African American fuel distributor in the United States, Hightowers Petroleum Company is an authentic, bona fide trailblazer. Incorporated in 1985, the firm specializes in procuring fuel from refineries and carrying it to the marketplace for sale and distribution. With a stellar list of clients that include The Kroger Co., General Motors Co., AK Steel Holding Corp., the Duke Energy, and scores of others, the company is poised to meet its goal of $1 billion in sales within the next few years.

According to CEO, Stephen Hightower, Hightowers Petroleum is also the largest minority-owned company in the Southwest Ohio region, and is ranked as the Tristate’s (Ohio/Kentucky/Indiana) 34th largest company overall by Deloitte Cincinnati USA 100 based on its 2013 revenues of $306 million.

Hightower comes by his business acumen legitimately. He has an entrepreneurial pedigree.

After purchasing his father’s janitorial business in 1981, he leveraged the opportunity into Hi-Mark Construction Group, a design /build general contractor specializing in building and wastewater treatment projects and asphalt resurfacing. Hightower’s newest business, HP Energy Co. LLC, founded in 2012, is a company that develops energy efficiency projects to help customers lower their energy costs with offices in California, Florida and Ohio. HP Energy also provides financing to pay for energy efficiency projects. Altogether, the three companies have approximately 75 total full-time employees, nationwide.

Based in Middletown, Ohio, the company has expanded its operations overseas to South Africa, Nigeria and Canada. According to Hightower, international expansion is a critical component to the company’s future growth strategy. The firm already has a solid foot print in Mexico. Securing international suppliers to countries, existing company customers and relationships established on other continents continue to be a priority for Hightower.

Although the company currently operates in Nigeria and South Africa, they are scouting possibilities in Abu Dhabi and throughout the Middle East.

His advice to young and aspiring businessmen and women is to build a network of influential, like-minded peer groups.

Hightower is a key player with Power Africa, an initiative started in 2013 by President Barack Obama to increase the number of people with access to electricity in sub-Saharan Africa. And last year, he joined a trade mission to Ghana and Nigeria with U.S. Secretary of Commerce Penny Pritzker and subsequently traveled with U.S. Department of Transportation Secretary, Anthony Foxx to Mozambique and South Africa. These efforts, according to Hightower, are proving crucial in building relationships that will ultimately lead to business opportunities abroad.

“While we’re continuing to grow the business nationally, we are intensely focused on the international marketplace for 2015,” Hightower said.
Hightower, who was appointed to the National Petroleum Council in 2010 by Steven Chu, former U.S. Secretary of Energy, says their increased visibility and thereby increased supplier relationships, is a result of accepting board appointments, participating in community service events, and from receiving various awards. As a member of the National Petroleum Council, he participates in advising the U.S. Secretary of Energy on national oil and natural gas issues and policies.

Yet, he admits, you can’t do it alone. Hightower credits wholesale distributors for helping to build his company.

In 1985, BP supported Hightowers to carry jet fuel to various government installations such as the Ohio National Guard. As a result, the company became licensed with the Public Utilities Commission of Ohio’s hauling authority as a PUCO contract carrier hauling fuel throughout the entire state of Ohio
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When it came time to obtain the essential PUCO authority, it was BP who stood with, and supported Hightowers so that the carrier could transport fuel on its behalf. Hightowers Petroleum now moves fuel in states from California to Maine to Mexico. That’s when the company realized the incestuous nature of the fuel industry.

“The fiercest competitors of  jobbers can, on any given day, be a vendor or customer to one another,” he says.

General Motors is only one of many of household names to which Hightowers Petroleum distributes fuel. In 2012, the company grossed $303 million in revenues, making it No. 10 on the Black Enterprise magazine industrial/service companies list, by annually selling an excess of 100 million gallons of gasoline and diesel fuel to companies such as Duke Energy, Sam’s Club, Delta Air Lines, FedEx, and Kroger grocery stores. Due to the success of its partnership with Kroger, the retail food chain has quadrupled its expenditures with Hightowers during the past five years.

With his landmark GM deal, Hightowers found itself in unique company. No other company aside from BP handles initial fills for any auto manufacturer in the U.S.; not Exxon, Chevron, or Sunoco, nor any jobbers—those who buy, sell, transport, and store fuel.

However, central to the firm’s success has been its relationship with its customers. It has been as much about staying accessible to customers as it has been about perfecting the business processes at the pump. Hightower attributes the company’s growth in sales and customer relationships to its exponential marketing strategy, which he implemented over 10 years ago. The strategy relies heavily on creating a marketing atmosphere, where others—customers, political networks, and industry agencies—are selling on the company’s behalf.
Hightower honed his business skills selling contracts for his father’s janitorial company at the age of 18.
“I had business sense and an ability to articulate it at a very young age,” says Hightower. He used that competitive advantage to help gain his first wholesale fuel contract through a set-aside program that allowed him an opportunity to enter what was and still is a closed market.

It is that same entrepreneurial zeal that helped him launch new businesses in construction, energy efficiency, and the fuel industry. Although his construction company took off immediately, years went by before Hightowers Petroleum broke even, a luxury he was able to indulge in since it wasn’t his only source of income. He was a quick study, discovering that fuel is a commodity producing razor-thin margins while at the same time requiring a heavy outlay in capital.

It hasn’t been an easy journey, however. Like so many minority firms, Hightower discovered that access to capital would prove to be one of his biggest hurdles.

Despite its stellar reputation in the industry, Hightowers was unable to obtain a line of credit until December 2011; after more than 25 years in business. Throughout the years the company relied on alternative financing and used larger oil suppliers to purchase its fuel.

Companies like Lykins Oil Company and Transmontaigne —not banks—served as his financial life line. Without this type of creative financing, Hightowers would not have been able to purchase, supply, and sell product to customers.
With great success comes the satisfaction of proving the critics wrong. And for Hightower, being able to demonstrate that minority businesses can succeed is worth the entire struggle.

“They would often tell me that minority business is not legitimate business,” he recalls.

The firm’s banner year for sales growth was realized in 2011 when it experienced increased sales revenues by nearly 48 percent over 2010. That landed the company at No. 3 among the top growth leaders of the Black Enterprises’ 100 industrial/service companies.

It would later be named as Black Enterprise Magazine Industrial/Service Company of the Year. In addition, Hightower was most recently named by the nonprofit Ohio Minority Supplier Development Council as its Supplier of the Year. The firm won in the category for companies with $50 million or more in annual sales. It is ranked #11on the Black Enterprise 100s list of the nation’s largest Black-owned industrial/service companies with revenues in excess of $346 million.

Hightower attended Wright State University, in Fairborn, Ohio. He continued his studies through the executive programs at the Kellogg School of Management, at Northwestern University, and the Darden School of Business at the University of Virginia, and a graduate of Mastery University of Robbins Research Institute.

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