The Next Frontier: Allied Oil & Supply enters new chapter

As a company with more than six decades in business, there’s a lot about Allied Oil & Supply that screams, “heritage.” As of Jan. 1 this year it began a new chapter in operations, merging with Heritage Petroleum.

“The concept of bringing these two organizations together was very simple,” said Steve Phillips, president of Allied Oil. “We’re very, very strong on the lubricant side and the diesel exhaust fluid side and they’re very strong on the diesel fuel side of things. Those synergies are going to come together to be able to provide a stronger, more sustainable organization going forward.”

The complementary product sectors position the Omaha-based operations and its Indiana-based counterpart to maximize market opportunities, Phillips said. It does so at a time when the transportation industry is running full tilt to meet the challenges of the nation’s supply chain.

“Locally I think the biggest piece is we’ll end up with fuel as an additional product line we will be selling, diesel fuel specifically,” Phillips said. “Therefore, we expect the original Allied side of the business will realize significant growth related to diesel fuel and the original Heritage geography will realize significant growth related to lubricants and lubricant services.

“A large portion of Allied’s customer base is fleet-related and that’s going to be an opportunity. There’ll be expansion of additional trucks, additional drivers and obviously additional business related to that within the current Allied structure.”

Decades of Experience

Allied Oil & Supply was founded in 1958 by Conrad Heinson, one-time salesman for Interstate Oil in Kansas City. Having learned Interstate was dropping out of the Nebraska and Iowa markets, Heinson pounced, launching Allied and servicing those markets.

Over the next 40 years, the company grew its locations as well as its product line, introducing retail tire sales, bulk oil storage tanks and a Michelin Truck Retread plant by the turn of the century. In 2003, the company branched into industrial services and in 2011 changed its name to Allied Oil & Tire.

The name changed back in 2019 with the sale of the tire division to Bauer Built Tire & Service, but growth and expansion continued practically to the start of negotiations with Heritage in mid-2021. At that time, Allied had grown to serve Arkansas, Oklahoma, Missouri, Kansas, Iowa, Nebraska, South Dakota, North Dakota and Minnesota. Heritage Petroleum, an 85-year-old, family-owned petroleum distributor based in Evansville, Indiana, serves customers in Kentucky, Indiana, Illinois and Missouri.

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A New Era

One casualty of the merger is the Allied name. Phillips said while existing branding will remain in place as far as its private label products are concerned, the corporate moniker will be changed over to Heritage Petroleum at some point. Beyond that, the company’s desire to aggressively grow both jobs and market share post-merger remains unchanged.

“The intent is to pursue acquisitions once we get fully integrated,” said Phillips, who assumes the duties of president of operations with the new entity. “We’re setting ourselves up for that. We’ll be putting ourselves in a position to be able to acquire additional companies going forward.

“We’ll also be adding additional jobs; there’s 170 employees with Heritage and there’s 160 with Allied, and we see ourselves hiring more people through this process and into the future.”

Phillips said another advantage of the deal is leveraging the companies’ variety of brands in its combined line of lubricants, fuel and diesel exhaust fluid products. This helps insulate the newly merged company from kinks in the supply chain better than competitors with narrower product lines.

“Our vendors are definitely affected by supply chain issues and they’ve been putting all of the distributors on allocation,” he said. “One of the benefits that we have is that we have a number of different vendors across multiple brands and we’ve been able to provide product to our customers where we believe other distributors have had challenges in doing that.”

Still, the pandemic hasn’t been without its hiccups for both firms, specifically as it applies to managing remote workers. Having come through that, Phillips said the new company is ready for whatever the market holds next.

“We’ve had remote working prior to COVID and we have it today,” he said. “My safety director is in Wichita, Kansas; I’ve got a VP of operations in Kansas City and another VP of operations in Sioux Falls. My vice president of sales has always been in Kansas City. My controller’s here in Omaha. We’ve always been somewhat spread out, if you will.

“During COVID, we’ve extended that beyond those few workers and we’ve confirmed that people can get their work done and do what they need to do in order to make things happen.

We’re pleased and impressed by our folks who make sure that they take care of our customers and accomplish their tasks.”

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