THE expected boom in the renewables industry will offer “a huge opportunity for this part of the world” and JR Rix & Sons has its own part to play, said Rory Clarke, managing director of Rix Petroleum.
“I think it will completely transform Hull and Grimsby. It will create thousands of jobs, ultimately it will increase property values, increase incomes and I think it will be completely transformational in the way that the oil industry was for places like Aberdeen.”
The economic fortunes of the Humber are expected to be transformed with the total planned investment in the renewable energy sector on the estuary approaching £1bn. This includes investment in offshore wind power, biomass, bioethanol and tidal power generation, as the UK pushes forward towards its 30 per cent target for renewable energy by 2020.
Mr Clarke said: “Cities like Hull have the highest unemployment in the country and are crying out for this opportunity and that’s what makes it a good fit.”
Hull-based JR Rix & Sons, of which Mr Clarke is also a board director, is an employer of 500 people, with a turnover of £350m, and has been family owned for over 140 years.
It started out as a shipping company in the 1870s, but that is only a small part of what it does today. Its range of companies covers stevedoring, warehousing, and ship building through to fuel distribution, manufacturing and property development.
Mr Clarke said: “We think we have a number of skills and resources within our organisation that will be useful to businesses in the renewables sector.
“That includes land that we’ve got off dock, it includes opportunities for our marine refuelling business and lubricants, for the supply of fuel either land or marine, for the service and maintenance of the work boats that are doing maintenance of the pylons and we have commissioned a wind farm work boat ourselves.
“And we are planning to operate a number of work boats for the transit of technicians from the shore.”
Born in Essex, Mr Clarke grew up in Northumberland, Sussex, Surrey and Gloucestershire, initially beginning training as an accountant in the early days of his career. “Twelve months was enough to convince me that spending time in an office wasn’t what I wanted to do at that point in my life. It didn’t seem very exciting.”
A five-year long stint in the army saw Mr Clarke commissioned as an officer into the infantry. He joined the 1st Battalion Gloucestershire regiment and spent several months stationed in Cyprus. Later, Mr Clarke went to work for military clothing and equipment seller Toye, Kenning and Spencer in the Midlands for about two years, followed by some time at a West Country printing firm.
Yorkshire has been home for Mr Clarke for 22 years, most of which he has spent working for JR Rix & Sons.
In 1990 he started as a credit manager, later holding responsibilities for the development of biodiesel, and taking the role of managing director of Rix Petroleum seven or eight years ago. Five years ago he became a main board director.
Rix Petroleum distributes and retails petroleum products from local branches throughout Yorkshire, Lincolnshire, Mercia, the Midlands, the North West, the East Coast of Scotland and East Anglia.
“When I took over on the petrol side of the business we had bases in Hull, Immingham and Montrose.
“Over that time we’ve moved from operating 35 tankers from just three different locations to now operating about 80 tankers out of 18 different locations.”
The ability to adapt and seize opportunities is vital, explained Mr Clarke.
“We live in an environment that is constantly changing. I don’t think it’s possible for any business to stay the same. If they are then they are either failing to respond to threats or not taking advantage of opportunities. Our development has been a bit of both but largely where we’ve recognised opportunities”
The firm has appointed good managers, and has been run conservatively, with a strong financial foundation, said Mr Clarke.
JR Rix & Sons sold a number of car franchises, focusing on developing the petroleum side of the business, and in shipping, building new barges.
Mr Clarke said: “We decided before the recession that the car franchises were a difficult business for us in that a great deal of the business was controlled by the franchise.
“It’s the terms they set and the range of products and how attractive they are and the margins they allow which leave us with very limited control.”
Following a number of disasters, including The Erika which foundered in the Bay of Biscay over a decade ago, rules and regulations relating to the operation of tankers at sea have changed. This included an age limit on the vessel of 30 or 35 years and a requirement for the vessel to be double-skinned, said Mr Clarke. He said this meant the company had to modernise its fleets, requiring “considerable investment”.
The nature of the company’s competition has also changed considerably. “In the last few years, there have been a lot of amalgamations and consolidations in the industry.
“Over the last few years it’s been a lot harder for a number of companies to start up because of the difficulties of getting credit and getting finance from the banks. We have fewer competitors but they tend to be larger businesses, which in some ways is a bigger threat.”
The rising price of oil is another ongoing challenge for the business – the idea that it benefits from this is a common misconception, said Mr Clarke.
“With higher oil prices, the governments with the oil make more money and major oil companies that bring it out of the ground make more money. But we’re primarily a transport company. We are buying it at whatever the market price is and are selling it to our customers.”
Higher oil prices mean higher operating costs, increased working capital requirements, while customers become more sensitive to the changing price of oil, he said, adding: “It puts our margins under pressure.”
In the current economic climate, the challenge is to grow market share, said Mr Clarke. “We need to make our customers aware of the value we can provide as a supplier and persuade them of the benefits of buying from us. It is important for us to look at ways of adding value to our products and offer a greater range.”
A recession brings its challenges, Mr Clarke explained, adding: “In some ways it makes it more interesting and in some ways tougher to manage a business.
“But businesses which survive well in a recession will be particularly well placed in the upturn that follows.”
Brief look at a successful life
Title: Director at JR Rix & Sons Ltd
Date of birth: 25/09/1959
Education: MBA, Hull University Business School; Standard Military Course (SMC), Sandhurst.
First job: Working in a café in Torquay when I was 17 years old.
Favourite song: It changes everyday.
Car driven: Lexus RX 450h
Favourite film: The first Star Wars film
Favourite holiday destination: Skiing somewhere
Last book read: Conqueror by Conn Iggulden
What I’m most proud of: My job and what I do at work.