NWF FUELS: Going the Extra Green Mile

Founded in 1871 as a farming cooperative to deliver feed and grain, NWF added fuel to its repertoire in 1950 when ploughs began to be pulled by tractors, and oil heating swiftly started to replace coal in homes. “Today NWF Fuels represents a dedicated fuels and lubricant business, boasting a modern fleet of over 155 vehicles and 26 fuel depots strategically covering a large footprint across England and Wales,” outlines MD Richard Huxley, of the business now staffed by around 340 employees.

“This means that we are now placed among the top three largest liquid fuels and lubricants businesses in the UK, with our infrastructure allowing us to serve in excess of 150,000 domestic, agricultural, commercial and retail customers and supply them with a comprehensive range of fuel, lubricants and AdBlue no matter their setting or situation.”

Of that broad customer base, tirelessly served six or even seven days per week, Huxley explains, around two thirds are domestic and the remainder commercial and agricultural. “We serve a diverse mix of customers on these two sides, but the biggest part of our business is selling home heating oil to people who are off-grid, and instead use kerosene or oil to fire their boilers.” This oil is bought in from all the UK’s foremost fuel majors, and the main refineries and terminals in the country.

INTEGRATING ACQUISITIONS

“From small beginnings we now have a turnover in excess of £350 million, are major authorised distributors for Texaco (Valero) and Jet (P66), and are preferred distributors of fuel for Essar, Total and Esso,” Huxley details of a truly stratospheric rise. From a distribution, rather than fuel, background himself, Huxley’s own arrival at NWF some three and a half years ago was inspired by an overarching strategy on the part of the Group to make a concerted effort to grow the fuels side of the existing business, partly organically but also through acquisition.

“Throughout NWF, there is the recognition that there is a major opportunity in the UK for consolidation of the industry,” Huxley tells us, delineating exactly how the composition of the market spells enormous potential for NWF Fuels.

“While we’re in third position, behind Certas and Watson Fuels, the top 10 distributors occupy less than 25% of the market. The rest is shared between hundreds of smaller, local, privately-owned businesses, and our strategy centres around opportunities to grow our geographic footprint through acquiring some of these very good, smaller distribution businesses.”

Prior to the pandemic, this was being very aggressively and successfully pursued, Huxley reveals. “We had acquired five fuel businesses within an 18-month period. When Covid hit, we were forced to place this on the back burner somewhat, but we are now safely back again to driving this side of the strategy and pushing it even harder as we move forward.

“I would anticipate that we will add a number of similar fuel businesses to our portfolio in the very near future.”

The pandemic presented NWF Fuels with something of a ‘perfect storm’ as Huxley puts it, its advent coinciding with a countrywide mad rush to buy fuel amid dramatically lowered prices. This combined with a sudden shift to home working, pushing domestic demand through the roof as people sought to ensure that their central heating systems were sufficiently stocked and fuelled.

“There were also more generalised concerns over the distribution networks in the UK,” he outlines, “and as a result, commercial customers sought to ensure that they too were well-stocked. There was a real boom in the market just as we were needing to restructure and re-organise.”

All aspects of the business required dynamic and rapid thinking from NWF Fuels, to attend to the myriad challenges which each facet attracted. “We had to create environments whereby everybody was safe, apart and as separated as possible. All of a sudden the whole game changed dramatically, and testament to our committee was our keeping any of the drastic impacts of Covid to an absolute minimum and these protocols were integral.

“It also demonstrated how resilient and change-agile our people are in a time of dire need,” Huxley adds, insightfully. “We were lucky on the business side that heightened domestic demand insulated us significantly and kept us in good shape, allowing us to continue to operate and drive progress and growth throughout the whole period.”

LIQUID FUEL ALTERNATIVES

A cold winter, increased home working and operating in large and robust markets led to margins much stronger than anticipated, to more than offset any lower commercial activity from the impact of Covid-19. With fuel having been key to driving change and innovation globally since the industrial revolution, today this is borne out in the development of sustainable and environmentally friendly replacements.

“One of the biggest challenges that we have is that we sell fossil fuels,” Huxley concedes, “but NWF Fuels is supporting innovation and working closely with fuel producers to develop the next generation of fuels.

“Some of our most decisive work has been on researching alternatives to liquid fuel for the home heating market. We have been involved with UKIFDA in helping drive pilots to find low-carbon alternatives to the kerosene currently in use in boilers, and we hope that the wealth of information we have subsequently been able to provide to the government will in turn make us part of their own plans in migrating oil-fired boilers into a more carbon neutral environment.

“Obviously we are not the producers of the fuels themselves,” Huxley reiterates, “so it is crucial that we work intimately with suppliers on the commercial side to push for more renewable liquid fuels, and help firms reduce their carbon footprint as we transition away from fossil fuels over time.”

Among the most enticing of these has been the discovery of Hydrogenated Vegetable Oil (HVO), which some newer boilers have the capability to burn with no modifications. Ideally suited to a vast range of industries as a viable alternative to diesel, it has found applications to date in construction, rail, events and public transport.

“The order of the day as we emerge from Covid is to reignite our growth strategy, and simply to pick back up where we left off pre-pandemic with the acquisitor pathway,” Huxley answers when questioned on NWF Fuels’s imminent priorities.

“There are still significant opportunities to consolidate the fuels market, and the business is continuing to build its pipeline and assess potential targets across the country. We also believe there are opportunities to leverage benefits from the breadth of our growing network. As such we continue to invest in enhancing systems and capabilities, which we believe will improve efficiencies and provide a strong platform for continued growth.”