Giving local control to its offices and maintaining a positive bottom line continues to drive Holston Gases’ success after 60 years in business.
By Jim Harris
Many distributors or other companies with multiple locations across several states consolidate their sales, accounts receivable or other operation functions within a single site. Holston Gases, however, prefers to have personnel in its 26 locations conduct their business on the local level.
“We have resisted the temptation to centralize functions,” President and CEO Robert Anders says. “Being decentralized has driven the decision-making and the management of all functions of our operation to the local level.”
Holston Gases has locations in six states and sells products daily into 11 states. The company’s products include welding and industrial gases, as well as medical, specialty and laboratory gases, beverage CO2 and propane. Holston is also a full-line welding supply company and carries safety and industrial supplies.
Each of the company’s locations is led by a general manager who oversees all of the administrative functions of his or her branch. “This gives us someone who has their finger on the pulse of the market who can make decisions quickly, instead of relying on someone who is 300 miles away,” he adds.
Instead of making decisions for each of its locations, Holston Gases supports them in other substantial ways. “We have the capabilities and the assets of a large regional supplier with a small company focus. There’s very few situations where we don’t have the assets to meet our customers’ needs, but we do everything with the flavor you’d find in asmall independent company,” Anders says.
“One problem many independent distributors face is not having the financial capability to compete in the market, but what they do really well is build relationships with their customers,” he adds. “Our local offices retain the local flavor and get to know their customers, but they also benefit from our large arsenal of assets.”
Many of the company’s regional managers and other employees have worked for Holston Gases for several years. “The longevity of our employees is what I think we’re proudest of,” Anders says. “We have 12 people who just celebrated 30 years or more year, and the average tenure here is 14 – 15 years.
“We have excellent ownership that looks at Holston Gases not just as a vehicle for the owners’ family to achieve what they need to in their lives, but also as a vehicle for our 350 employees to provide for their families,” he adds. “Our owners know that what is good for the employee is good for the company.”
Decades of Expansion
Holston Gases’ services and history of strong financial management are helping the company reach its 60th anniversary, which it is celebrating this year.
“We have stayed focused on our core principles and values of bringing quality service and products into the marketplace and being financially wise with our resources and assets so we can weather lows in the economy and invest when expansion opportunities become available,” Anders says.
Partners Pat Baxter and Bob Walsh founded the company in 1958. Baxter became sole owner of the company in 1976, and his son, Bill Baxter, joined the company in 1981. Soon after that, the company began to grow significantly. Anders, who formerly worked for industrial gas supplier the BOC Group, was recruited in 1990 following Holston Gases’ acquisition of another distributor, M.G. Industries.
Since joining the company, Anders has helped oversee its further expansion. Holston Gases has grown both through acquisition as well as organically. The company’s propane business, which includes 1,200,000 gallons of ground storage and a rail terminal, has especially helped it expand. Holston Gases’ recent acquisitions include two propane companies in Spartanburg, S.C., and an industrial gas and welding supply company in Nashville.
“We don’t dabble in propane, we get into it in a very big way, and that has doubled our opportunities for acquisition,” Anders says. “If we buy a propane company, we can roll our industrial gas and supply business into it very quickly, and if we buy a supply company, we can easily incorporate our propane business. We have two target markets for acquisition, while most companies in our industry have just one market to pursue.”
Fair and Disciplined
The company maintains long-term relationships with a number of suppliers and manufacturers. “We try to focus on having open and fair relationships with our suppliers, and want to make sure we surround ourselves with manufacturers who, like us, are focused on what’s in the long-term best interest of both companies as well as the end customer,” Anders says.
The metal fabrication market is the company’s largest customer base. One of the largest categories within that market served by the company is automotive manufacturing. The Knoxville, Tenn.-headquartered company has locations in southern states that include Kentucky,South Carolina and Alabama, where several major automotive manufacturers have plants.
“The south is where much of the expansion of the auto manufacturing industry has been happening, and many of the suppliers who serve manufacturers are now down here as well,” Anders says. “Automotive manufacturing is a huge part of our customer base.”
Holston Gases repackages, sells and delivers gases in liquid form as well as in high-pressure cylinders. The company in 2013 moved its headquarters into a 20-acre site that includes a 25,600-square-foot fill plant, a 3,200-square-foot retail propane building and a 17,600-square-foot work and storage areas.
“Smaller companies have to rely on manufacturers to deliver products, but they charge more to do that,” Anders says. “Over the past few years, we’ve developed our own fleet of tractor trailers that pick up products at the plant and bring them back to our facility, which creates efficiency and cost savings in the long-term.”
The company’s investment in its facilities and fleet demonstrates its corporate focus on financial responsibility and debt management. “We work very hard on maintaining healthy gross margins, and are very disciplined in managing our operating expenses so our cash flow is strong,” he adds. “We have always thrived, even in a down economy, because we have the financial strength to expand while others are cutting back.”
The general manager of each Holston Gases’ locations maintains a charitable fund that they allocate to different community organizations. “It’s at the discretion of the manager to choose a cause that will have the most impact in that community,” President and CEO Robert Anders says. “We are very proud of how philanthropic our managers are in their individual markets.”
Holston Gas offices support organizations include the United Way and Big Brothers Big Sisters, as well as numerous local groups. “We give our managers as many opportunities to make an impact in the local community as we can,” he adds.