Royal Vopak NV

1818–1999

Created from the merger of Dutch logistics specialists Van Ommeren and Pakhoed NV in 1999, Royal Vopak NV is the world's leading provider of logistics and distribution services to the global chemicals and oil industries. Based in Rotterdam, one of the world's busiest ports, the company's operations include a fleet of nearly 250 ships, 3,000 tank containers, 240 chemical distribution terminals, and storage capacity of nearly 24 million cubic meters available through its network of 70 terminals worldwide. The company's major divisions include Oil and Gas Logistics, which provides storage and logistics services not only for mineral oils and gas, but also for vegetable oils, animal fats, and chemical gases. Vopak's shipping fleet ranges from its 50-vessel strong barge fleet, to short sea and deep sea vessels. The company's Chemicals Logistics division is the world leader in that market, providing total capacity of more than 7.1 million cubic meters, as well as specialized shipping vessels for barging, short sea and deep sea shipping. Related to this division is the Vopak Logistics Services division, which specializes in providing services to the chemicals industry. The final major Vopak division is its Chemical Distribution wing, which is the market leader in the United States and in Western Europe. The creation of Royal Vopak was an important step toward the consolidation of the still highly fragmented chemical and oil logistics industry at the end of the 20th century.

Porter's Association in the 17th Century

The origins of Royal Vopak lay in the early 17th century, at the height of the golden era of Dutch trading activities. The most famous of the great Dutch trading houses established during this time was the Oost-Indische Compagnie (East India Company). That company also helped create Amsterdam as one of Europe's major port cities. In 1616, a group of porters, who carried goods between Oost-Indische vessels and Amsterdam's weighing house, joined together to form the Blauwhoed ("blue hat") company. Over the next three centuries Blauwhoed added to its activities by offering storage facilities, before establishing itself as one of the Netherlands's major stevedoring, port services, and cargo agents. Blauwhoed also built up a strong real estate portfolio--an activity that continued to be carried out under the Blauwhoed name into the 21st century.

If the Dutch trading houses lost out to the rise of the United Kingdom as the world's shipping leader, the Netherlands remained a key player in worldwide trade. A number of other companies joined Blauwhoed in the port services, storage, and related markets--particularly as the country's port activity slowly shifted to the more modern Rotterdam port. A newcomer to the industry was Pakhuismeesteren ("warehouse masters"), which was formed in Rotterdam in 1818. Pakhuismeesteren originally focused on loading and unloading ships, as well as on offering storage facilities for tea, coffee, spices and other goods arriving from the Dutch colonies. Later in that century, Pakhuismeesteren began offering storage services for the rising oil industry. By 1888, propelled by the invention of the internal combustion engine, that industry began to take off, and Pakhuismeesteren began storing oil and oil products in bulk tanks.

By then, another company had joined the Dutch port services industry. Set up in 1839, Van Ommeren operated as a shipping and forwarding agent. Throughout that century and into the next, Van Ommeren expanded steadily, building up its own deep sea shipping and inland barging fleet. It also became one of the Netherlands' leading stevedoring and distribution companies. At the beginning of the 20th century, Van Ommeren also began tank storage operations, a market in which it quickly became a leading force. Further south in Europe, Lambert Rivière was founded in 1880, beginning its own chemical distribution activities that were to make it one of Southern Europe's leaders.

At the beginning of the 20th century, Van Ommeren also began tank storage operations, a market in which it quickly became a leading force.

1924–1995

Merging Interests in the 20th Century

Another important element of the eventual Royal Vopak was founded in 1924 in Seattle, Washington, when George Van Waters and Nat Rogers began a brokerage operation in the Pacific Northwest region of the United States. This company--Van Waters & Rogers--started out handling products such as paint, naval stores and various raw materials, before turning to chemical distribution. The Van Waters & Rogers business spread quickly throughout the western United States before expanding into the eastern part of the country. By the time it entered the Canadian market in the 1950s, Van Waters & Rogers had already gained a leading position in the North American chemical distribution market.

The destruction of Rotterdam at the beginning of World War II and its subsequent reconstruction after the war, created Rotterdam not only as the Netherlands' major port, but also as one of the world's most modern and busiest ports. The rise of the oil and chemicals industries during the postwar years gave new opportunities to companies such as Blauwhoed, Pakhuismeesteren and Van Ommeren to provide extensive storage, shipping and other logistics services to these industries.

Increasing competition around the world led Blauwhoed and Pakhuismeesteren to join forces in 1967, creating Pakhoed NV. The newly expanded company combined its predecessors' strengths in storage facilities, including warehouse storage and oil and chemical storage, stevedoring, and other port support services. Pakhoed's interests in developing a full-fledged chemicals distribution wing coincided with its plan to expand its operations into the North American market. In the mid-1980s, Pakhoed took a step toward these objectives when it acquired the option to buy up the United States' distribution specialist--McKesson Corporation. Rather than exercise the option to buy McKesson, in 1986 Pakhoed instead sold the purchase option to Van Waters & Rogers in exchange for a 35 percent share in the enlarged U.S. company. By then, Van Waters & Rogers had established itself as North America's leading chemicals distribution company. Van Waters & Rogers' acquisition of McKesson set the stage for the creation of a larger holding company, Univar Corporation.

Univar had decided to enter the European market at the beginning of the 1990s. Joining with Pakhoed, Univar's partners acquired Sweden's Beyer, and formed Univar Europe NV. Pakhoed's share in that company was 49 percent, to Univar Corporation's 51 percent--while Pakhoed's share in Univar Corporation itself was reduced to 28 percent. Soon after, Pakhoed sold its share of Univar Europe back to Univar Corporation. The proceeds of this sale gave Pakhoed the capital to make a new attempt at entering the European chemicals distribution arena. In 1995, Pakhoed acquired France's Lambert Rivière, which--through its acquisitions of such rivals as Italy's UCE in 1989--had established a leading position in the southern European market, with sales of more than FFr 1 billion per year.

1996–1999

More Restructuring at the Approach of the New Millennium

Univar's attempts to consolidate and centralize its operations through the first half of the 1990s brought its profits into a slide. The resulting weak price in Univar's shares finally gave Pakhoed the opportunity to acquire full control of Univar Corporation in 1996. This move gave Pakhoed not only a leading share of the chemicals distribution industry in the North American market, but also a strong position across much of western Europe.

Van Ommeren, meanwhile, had attempted its own diversification in the late 1970s and early 1980s, in an attempt to counter the fluctuations in its core shipping and tank storage operations. But the company's diversification moves--notably through investments in various trading companies&mdash′oved to be unsatisfactory, and at the beginning of the 1990s the company decided to restructure and return to its main shipping and tank storage operations. As Van Ommeren divested its newly non-core operations throughout the 1990s, it also expanded its shipping operations into new areas. One such new area was an entrance into liquid cargo transportation activities, which complemented its tank storage facilities.

Consolidation within the oil and chemicals industries in the 1990s--and a wider trend toward the creation of growing numbers of globally operating companies--sparked interest in the consolidation of the related logistics, storage and distribution industries. Van Ommeren and Pakhoed first began merger talks in 1998, but that merger was soon called off when the two companies could not decide on a divestment program needed to comply with a European Commission anti-monopoly directive.

By 1999, however, Van Ommeren and Pakhoed were back together again&mdash continued mergers among both companies' customers had begun leading to a shrinking client base throughout the industry. Van Ommeren and Pakhoed completed their merger in 1999, adopting the name Royal Vopak. The company immediately launched a divestment and restructuring plan, including the sale of a number of the company's Rotterdam, Antwerp and other storage facilities.

1999–2000

At the same time, Royal Vopak began a new acquisition campaign, buying up such companies as Roland NV of Belgium (chemicals distributors) and Dystrybucja of Poland in 1999. Royal Vopak also completed ownership deals in other companies, such as the acquisition of full control of Chemgas Holding BV and Van Ommeren Gas Shipping Holding Singapore Pte. Ltd.--also known as Vogas--in 2000. The company also began buying up terminals and storage facilities, including terminals in Brazil, Mexico, Peru and elsewhere.

The newly combined company reported strong sales after its first full year. With revenues of more than EUR 4 billion, Royal Vopak maintained its leading position in its core markets. Nevertheless, Royal Vopak's market share of only some 5 percent in the highly fragmented oil and chemicals logistics segments meant plenty of room for the company to grow in the new century.

Immediately, Royal Vopak attempted to do just that. The company started the 21st century strongly, with the acquisition of the United Kingdom's Ellis & Everard. This boosted its chemical distribution capacity both in Europe and in North America. Then, duking it out with main rivals Ashland Inc. and Stinnes AG, Royal Vopak continued to make plans for acquisitions to maintain its lead. The company planned on especially targeting its chemical distribution operations over the years to come.