Martyn Lyons is a well-known figure in the tank storage industry, be it for his previous roles as CEO of Inter Terminals, managing 23 terminals across Europe, or as Chairman of the Tank Storage Association, influencing industry regulation and legislation.
With 35 years of experience in the sector, Martyn established TR3 Consulting in 2021, drawing on his wealth of industry knowledge to guide those involved in bulk liquid storage.
Martyn shared his journey through the acquisitive bulk liquid storage sector with Margaret Major, FON Publishing Director, highlighting the vital role of post-merger integration in delivering a successful acquisition strategy.
Take us back to where it all began
Although it’s an awfully long time ago now, I enjoyed my time as an engineering officer in the Merchant Navy, from the late 70s to the late 80s.
At that time, container ships were only just becoming fashionable, whereas now they are everywhere. With cargo in containers, a ship can be loaded and unloaded extremely quickly delivering to a rapid turnaround. In older ships, bulk cargo was lifted in and out by cranes on board the ship or on the quayside which is a much longer process.
For somebody like me, working on the older ships, that meant plenty of time to enjoy where you were. Those were great times, when I got to see a lot of the world!
You clearly enjoyed your time with the Merchant Navy, how did that lead into your career in bulk liquid storage?
I was working for a Hong Kong-based company, and the trips were getting longer. Although I was relatively young and ambitious and enjoying working my way up the ladder, you get so far, and you think “Is this really what I want to do for the rest of my life?” It was time for a change, so I came home.
This was the late 80s, before the proliferation of the internet and mobile phones. Sitting, reading the paper, I saw an advert for a Trainee Manager for Simon Storage (as it was back then) at the Seals Sands Terminal on Teesside. I applied for the job, went to two interviews, was offered the role and the rest is history.
A good fit
The company was ambitious to grow, and to be better than the competition. With the industry expanding and becoming more competitive, the operations director had found the merchant navy to be a good source of highly qualified people with a skill set and level of discipline that suited the unique challenges of the bulk liquid storage industry.
Over my years in the sector, I have found that, more often than not, you have to develop your own people, so getting the best people in and growing them is essential. For me, it was the beginning of a good long history in the industry. Interestingly, 35 years later, not much has changed – it is still very hard to get good people into this unique sector.
What are the challenges that make it difficult?
Aside from the unique complexities of the sector, there are more challenges these days because of energy transition. Young people coming out of education don’t have a desire to get into what might be termed heavy or oil-related industry. Many have strong views on both climate change and its causes.
This makes it hard to get them interested in an industry that is still very heavily involved with, and dependent on, fossil fuels.
That is, in itself, a huge challenge. But it is also true that if you go into any educational establishment, you’ll be hard pressed to find someone who has heard of bulk liquid storage let alone considered a career in it!
But for those who are in the know, there is never a dull day, and that is what has kept me in the industry for 35 years.
Did you enjoy it from the outset?
Not from day one, if I’m honest, because it was worlds apart from what I had been doing. But, after the first few months, I found I was really enjoying it.
The acquisition trail
The company I joined, Simon Storage, which became Inter Terminals in 2015, was growing by acquisition, and I was part of the acquisition team which I found hugely enjoyable.
The growth was into different European countries and the terminals were mostly multi-purpose storing a variety of products and with a wide variety of contracts and customers.
Whilst the challenges of recruitment in bulk liquid storage have remained over the years, a lot has changed, especially with technology and processes.
Following the shocking Buncefield incident in 2005, a joint regulator / industry task group was formed to develop enhanced minimum standards of good practice for storage terminals. I was heavily involved with this task group, on behalf of the Tank Storage Association, as well as with the more permanent Process Safety Leadership Group that followed, to ensure sustained progress through strategic sector leadership.
With a clear objective to ensure an incident of that nature would never happen again, the Process Safety Leadership Group published recommendations and guidance that led to significant changes in bulk liquid terminals as well as in the loading of road tankers, but also changed the relationship, hopefully forever, between industry and regulators.
Why was it so pivotal?
Prior to this time, the style of regulators was a policing one. However, in the working groups, we were literally working shoulder to shoulder, and this shifted the dynamic from working on opposite sides of the table, to working together to comply with the law.
From a regulator perspective it meant that they got to know not just the assets and infrastructure but also developed an understanding of the people as well.
Were you glad of your involvement?
I was, it was an extremely important time for the sector. I’ve always been very active within the Tank Storage Association – I was chairman or president for around 10 years and I’m still a director – so when the HSE and competent authority were looking to form an industry and regulator working group, it was natural for me to put my hand up.
And this was alongside your ongoing role at Simon Storage?
Yes. I was Operations Director at the time, becoming Managing Director in 2006, and there was a lot changing there as well. In 2003, Simon Storage had been sold by the British owners, Simon Group PLC, to two private equity companies who then sold the company to Inter Pipeline, a Canadian company listed on the Toronto Stock Exchange.
That’s when things really started happening from my perspective, because this was the first overseas acquisition for the new Canadian owners, who wanted to put themselves on the map in Europe.
We were already working on an acquisition when they bought the business in October 2005, and we announced the acquisition of the German business in Mannheim on the River Rhine soon after, in January 2006.
We waited a few years for the next acquisition successes – a tank storage business in Denmark in 2012, and another one in Sweden in 2015.
Then the next was the biggest deal I’ve ever done, acquiring the UK and European terminals of NuStar Energy in 2018.
Through these acquisitions we’d gone from the pre-2005 version of Simon Storage – a 1,000,000 cubic metre UK-centric business with a small business in Foynes, in the south of Ireland – to being a pan-European company operating in six different countries with 23 terminals and 6,000,000 cubic metres.
One of the things I highlighted in my ‘In Profile’ feature (FON November), is the necessity to attract the best people and retain them.
To achieve the scale of successful growth detailed above, you need a really good team around you. If you recognise you have a good team, you’ve also got to work hard to make sure that you retain them.
This is fundamentally important to every business, not just liquid storage.
What was your involvement in the acquisition process?
I was part of the team negotiating with the other side. Carrying out due diligence, looking to see what we liked or didn’t, negotiating price and the conditions and, importantly, assuming we were going to get the deal over the line, how exactly are we going to run it when we do?
The bigger the acquisition, the bigger the integration challenge. We’ve got it – great news! Now what? It’s vital to have a clear plan and a strategy for the future.
It really is a huge amount of work, but the excitement and the buzz are terrific.
Integration is key to successful acquisition.
In acquiring an established company, you may find there are things they are doing better than you are.
Find out how they’re running: What’s going well, what’s not going well? What would you like to change if you see some good ideas? Why not adopt those good ideas?
A service provider
As the bulk liquid storage sector has evolved over the years, technology and digitalisation have paid an increasing part. It is becoming more technically complex, but the fundamental task of filling and emptying tanks isn’t difficult.
The majority of bulk liquid storage companies don’t own the products. It is about renting space in tanks to customers so it’s a service industry. And being a service provider means delivering good service to your customers, showing them you’re competent and good at what you do.
In light of that, an acquisition is not just buying something that actually exists, as you are also buying the level of service that’s provided by the people in that company.
It is crucially important to recognise that.
Did you run with existing teams and structure?
We did until NuStar. When we bought Germany, Denmark and Sweden, they were overseas business units that ran largely autonomously with some centralised resources and direction from head office.
The game changer for us was the Nu Star acquisition in 2018, because despite being a US-owned company based in Texas, they also had their own UK HQ.
The integration was far more complex
Was that the end of the acquisition trail?
Simon Storage had been rebranded, in 2015, as Inter Terminals, a wholly owned subsidiary of the Canadian company Inter Pipeline. When you’re owned by a big company, like Inter Pipeline, you become focussed on keeping your part of the business as a meaningful slice of the pie.
Despite being one of the leading tank storage companies in Europe, we were about 12% of parent company Inter Pipeline, a company that was also very acquisitive.
Their announcement, in 2019, of plans to build a polypropylene manufacturing plant, the first of its kind in Canada, would make us a much smaller slice of the pie.
Nothing lasts forever, and the inevitable came as I was asked to lead the team to move the storage business on. We sold the UK, Ireland, Netherlands and Germany business to CLH, now known as Exolum, in 2020, which then became the biggest deal I’ve ever done.
The period of Canadian ownership was 15 years, and it was a very enjoyable period for me.
Did you complete the handover to CLH then step away?
I stayed on for a few months, to dot the is and cross the ts, and then I stepped away in February 2021.
I took a bit of time off and did all sorts, including going on a cruise, and I learned a lot in that time. I learned that life on the other side is a lot less stressful. But I also realised that I wasn’t quite done yet.
So, I set up TR3 Consulting to offer my services directly to tank storage companies looking for my advice both in the UK, and across Europe as well.
Is there a specialism you offer, and how you can help?
One of the most significant areas is the energy transition – helping companies convert parts of their terminals to cope with new energy transition products – which I very much enjoy.
On another level, but also associated with energy transition, is helping companies prepare for the future by formulating a strategic plan.
A lot of tank storage companies are owned by financial companies who are extremely professional and understand the finance world, what they want to buy, and that they want to make a return on their investment.
But when it comes to the detail of the business itself, they need advisors to guide them and the senior management teams.
Strategic plans vary enormously from one company to another, even in the same industry. They vary because of their outlook on life, which is usually driven from the top down. Private equity companies, for example, may only be looking to hold the business for three to five years so are less focussed on long term vision and more likely to look at opportunities that are here and now.
The transition casts a light on products like HVO and methanol, which are being used widely now, as well as products for the future, like hydrogen and ammonia, that are complicated and expensive. For these it takes a long time to get necessary permissions and even longer to build the storage.
Does this result in a lack of appetite for investment in a future possibility, because of the impact on short term profitability?
It can do. But offsetting that is the strong influence of ESG – environmental, social and governance. It affects us all, and so it should, but also impacts strategic decisions.
Tank storage company owners who need to secure financing to either buy a company or for capital investment in converting facilities to handle the energy transition will go to the financial institutions where they get the same questions on ESG: What is it you’re going to do and how is this going to make the world a better place?
Without the right answers, they might not be successful in securing the finance.
A short-term view is fine but is exactly that – short-term.
Are terminals creating new storage for new fuels or repurposing?
The job of multipurpose terminals has always been to cater for product churn, and they are repurposing all the time which gives them an advantage.
To repurpose to handle HVO is relatively straightforward because the competency is already in place, and there is inbuilt infrastructure flexibility with multiple tanks, multiple pipelines, multiple pumps.
Most dedicated product terminals are oil terminals with a good example being the terminals on the Thames which are all oil terminals, all storing petrol, diesel, aviation fuel etc. because of the demand in London and the South East of England.
These dedicated terminals, whilst handling huge volumes, are only handling a small number of products. This results in limited flexibility in both infrastructure and assets.
To repurpose to store HVO alongside fossil-based diesel, requires tank separation. It might involve another pipeline from the jetty to upload the ship and will probably mean new loading infrastructure for road tankers.
Can it be done? How much will it cost? Will you get a return on investment and what contracts are you going to get to support it?
It’s a very different challenge.
What will be the biggest challenges to the bulk liquid storage sector over the next three to five years?
The energy transition undoubtedly. But I believe that those are good challenges that present opportunities. However, they need identifying and embracing, which is why you need to have a fit-for-purpose, up-to-date strategic plan.
Is that a large element of the work of your consultancy?
We enjoy helping businesses address the challenges of the journey towards net zero and we also enjoy helping growing businesses address the challenge we discussed earlier – that of successful integration.
Through the Inter Terminals sales process, I came across a business called Global PMI Partners (GPMIP). GPMIP is an independent company that specialises in post-merger integration.
In my earlier acquisition experiences, we handled integration internally. Appointing an integration manager from within, we relied on them to manage all the integration activities like harmonising IT, finance and accounting systems, as well as people and processes.
Then I discovered this bespoke solutions provider, GPMIP, full of people like me, with 20 or 30 years of experience.
A few months after the sale of Inter, Global PMI reconnected with me, and I’ve been enjoying being part of their team too, working with and supporting global energy clients.
With an increasing number of acquisitions in the distributor community, surely integration services have a role to play here too?
Some distributors have already been making use of the services of Global PMI, valuing the bespoke, specialised advice on post-merger integration.
The other valuable aspect of the service, especially for those looking to multiple acquisitions, is that, when we go into a company, we transfer the skills and the knowledge so the company we’ve been working with is then equipped to do it themselves.
That said, if a company finds it needs additional help, we always will. It’s not a case of never coming through the door again but, if we transfer the skills, it leaves a company better equipped to handle the next one themselves.
You spoke with great enthusiasm of that long period of your career with Simon Storage and it’s clear that ‘floated your boat’ (to return to the Merchant Navy analogy!) Now that you can choose to work with others doing similar things, how are you finding your new world?
There is a lot of fun to be had in talking to lots of different people, different sectors, different parts of the world, and because I’m my own boss now, I can choose to do what interests me.
I enjoy the work I do through my consultancy, as well as continuing my association with the Tank Storage Association which has changed significantly over the last few years, particularly with the broadening of its membership and addition of associate members, to include some of the port companies, refineries and also supplier members.
Trade bodies are a great place to exchange knowledge, understanding and insight. And it is hugely valuable to bring the whole sector together in this way.
Now you are your own boss, what keeps you awake at night?
Nothing!
I’m quite active in my sailing club and I’m part of the management team of that too. So, just like when I was in full-time work, I find myself a bit thinly spread at times. But I’m not somebody to sit in a chair reading a newspaper and watching the world go by.
I have had an enormously enjoyable career, and I’m still very much enjoying being part of the industry now.
It’s an exciting time to be in bulk liquid storage!
Image credit: Tank Storage Association
