Waikato Business News July/August 2021

4 WAIKATO BUSINESS NEWS July/August 2021
The future
of fuel
From page 3
The Ruakura site will
include EV charging,
as do some other
Waitomo sites, with Ormsby
saying they have an open
mind to alternative technologies
and are anticipating a
more fragmented market in
future.
The oil industry’s got
trillions of dollars
invested in all this
infrastructure, and
it doesn’t seem
logical to think that
they would just
walk away from
that. It’ll just get
[to]: at what point
do they transition?
We need to be ready
for it when it does
happen.
“There is going to be different
energies for different
applications,” he says.”There
will be legacy people that,
for their application, a diesel
ute is the best tool for the
trade - they might be working
remotely, they might use the
vehicle for recreation as well
as work, and that's the best
thing for them.
“If you're living in a metro
area, and you've just got short
journeys, an EV might be
perfect, because you can park
it in your driveway, charge
it up. And then for heavy
trucks, or any fleet working
in metro areas, a battery vehicle
might be appropriate or,
alternatively, diesel or hydrogen.”
Hydrogen could become
the dominant fuel source for
long-haul trucks but Ormsby
is not expecting the oil industry
to “walk away” from its
historical business.
“The oil industry's got trillions
of dollars invested in
all this infrastructure, and it
doesn't seem logical to think
that they would just walk
away from that. It'll just get
[to]: at what point do they
transition? We need to be
ready for it when it does happen.”
Waitomo is buffered by
its relatively small size, with
between 2 percent and 4 percent
of the market.
“If you then segment
that into the alternate energies,
then it's even a lot
smaller again. So I don't see
the transition affecting our
existing business materially,
not within the short term or
medium term.”
He points out that with
the average age of New Zealand
vehicles being about 14
years, there is still plenty of
“runway” for internal combustion
vehicles being bought
today.
Ormsby expects operators
of diesel fleets will want to
“feather in” hydrogen rather
than making an overnight
switch. “So we'll be able to
offer them both a hydrocarbon
and hydrogen solution.”
He expects service stations
to evolve over time.
“If the fuel offering changes
to being some sort of algae-
based or biofuel, then I think
the offering won't change
much. Because if you can
put that into your car, and
fill it up just as you're filling
up today, and that's quick
and easy and you can get a
pie or a drink and carry on
your journey, why would you
change?
“There will have to be
something else that really
changes movement. People
like their vehicles, they like
the independence of being
able to travel when they want
to travel.”
A
small player it may
be, but Waitomo has
punched above its
weight when it comes to
upcoming changes to the regulations
in the Fuel Industry
Act.
Key provisions introducing
a more competitive element
for resellers such as
Waitomo come into force on
August 11.
Ormsby describes it as a
reset for the industry, perhaps
the biggest since deregulation
in the early 1990s. It will
provide what he describes as
a greater competitive tension
between the major oil companies
for the likes of Waitomo’s
business.
“We see that when the regulations
come into play, that
competitive tension will be
created. And then we will be
able to pass that to our customers
and give them potentially
better value for their
product.”
The changes came after
the Commerce Commission
found the wholesale market
wasn’t competitive enough,
and will give Waitomo and
other distributors greater
capacity to shop around for
their fuel.
Waitomo participated
in the submissions for the
changes, with Ormsby saying
they were one of the only
second tier players to participate
in the whole process.
The time-consuming visits
to Wellington, meetings and
conference attendance paid
off.
“I’m really proud of what
our contribution was to this
process, because I believe
that it will enable other participants
to test the market
as well and ultimately will
ensure that New Zealanders
get as competitively priced
fuel as they can.
“Putting my New Zealand
hat on, that’s what we want
Grey and Jimmy Ormsby at
Mystery Creek for Fieldays
to see, we want to see New
Zealand being competitive
in the market, taking products
to market globally and
being successful. And so the
little part that we can play is
that we can make sure that
the market for our products is
competitive.
“If I could say that this
government has delivered
on one thing, if these regulations
come into place, they
said that they would review
the fuel industry, they have
reviewed it, they’ve come out
with some regulations. And
we’ve had the opportunity to
participate, and we believe
the outcome is going to be
good for all New Zealanders.
Whatever your political
persuasion might be, these
guys have said that they were
going to do that and, should
the regulations come into
force, then they have.”
THE LITTLE ENGINE THAT COULD
Jimmy’s daughters, Waitomo’s fourth generation, opening the
company’s Tinakori site in Wellington. Kiri (left) and Isla (right).
Visitors to Waitomo’s
Frankton premises
find themselves in
a maze of ever expanding
Portacoms as the growing
company - 70 employees and
counting, 10 new fuel stops
in the pipeline for the next
year - bursts out of its site.
Meanwhile, the surrounds
take in an assortment of
tanks, containers and fuel
trucks. The aesthetic is as
much sprawling campsite as
headquarters, and the site has
more than a nod about it to
Waitomo’s rural roots in Te
Kuiti.
Those are also family
roots; Jimmy Ormsby is
third generation in the company,
and his father, Grey,
remains on the board. In fact,
the Waikato Business News
interview couldn’t be conducted
in Ormsby’s office
because Grey had installed
himself there for the morning.
Fortunately, another Portacom
- called Mahi - was
available. Next year marks 75
years for the firm, which was
founded by Jimmy’s grandfather
Desmond in 1947.
There was a period of joint
ownership with Mobil following
deregulation, but full
family ownership resumed in
2002, when Jimmy came on
board.
The 75th anniversary will
be marked in a building that
is much more fit for purpose
- right next door.
Waitomo has bought the
adjoining property, which
comes with a building large
enough for all the company’s
staff. In a sign of the times,
with Waitomo providing an
essential service, the new
offices will be designed so
spaces can be isolated if there
is another Covid lockdown.
By April 1 next year, they
expect to have moved everyone
across. Ormsby acknowledges
the need, though you
get the feeling many in the
team are quite content where
they are.
“We have quite clearly
outgrown the premises here.
We've definitely invested in
growing the business and the
technology platforms, and
the people and all the areas
that I think have delivered,
you know, really good value.
But our office is probably one
area that we've been a little
bit neglectful in moving with
the pace of the rest of the
business.”
Marketing manager Greta
Shirley chips in. “You know,
we say we are low cost and
you can see we are. It's reflective
of how we do it, I reckon.
I'm a little bit sad about moving
out of the Portacoms, but
I am looking forward …”
As for the name of the
room where the interview
was conducted, it’s Mahi
“because we believe in working
hard,” says Shirley, who
has a memorable turn of
phrase.
“The other rooms are
called tangata – because
‘people’ is one of our values.
And the War Room – because
that’s where we do battle, as
the little engine that could!”