History

The sun is rising over the mountains, burning the morning mist off of the Kanawha River that flows through downtown Charleston, West Virginia.  Originating deep in the Appalachians, it slowly widens and joins the Ohio, then onto the Mississippi, ultimately pouring into the great Gulf of Mexico - all along the way passing the major industrial cities of the United States.

On a hilltop just above downtown sits the corporate headquarters of McJunkin Corporation.  Just like the Kanawha, McJunkin originates in the Appalachians; and just like the many waterways throughout this country, McJunkin serves major industrial centers throughout the U.S.  With over $1.8 billion in sales, McJunkin has grown from humble origins to become a leading provider of industrial PVF and distribution services.

“It’s all about the people,” says H.B. “Bernie” Wehrle III, President and CEO of McJunkin Corporation. “People make the difference in this business. At the end of the day, the customer sees the product as a commodity.  What he cares about is whether he spoke to someone who understood his business.  He cares if that person solved his problem.  He cares if that person delivered a quality product on time, just as promised.”

“The House That Service Built”

That focus on service began back in 1921, when two brothers in law, Jerry McJunkin and H. Bernard Wehrle founded McJunkin Supply Company to serve the booming oil and gas industry in the mountains of West Virginia. 

Two years later, another brother in law, George Herscher joined the company.  Taking on the motto, “The House that Service Built”, McJunkin built roots in the Kanawha River valley.  In 1932 Union Carbide was founded in nearby Clendenin, quickly becoming a major customer and propelling McJunkin into the chemical industry.  By the 1940’s McJunkin’s distinctive red trucks could be seen rumbling across West Virginia and Kentucky.  Salesmen in black cars with red bumpers were calling on a wider and wider array of customers.

World War II kept the distribution side busy supporting the war effort, while the company’s forge shop was converted to producing 500 pound bomb casings and amphibious vehicles for the military.  Following the war, the first industrial branch was opened just north of Charleston in Marietta, Ohio.  Post war economic expansion and aggressive growth put branches in Louisville, Pittsburgh and Atlanta.  A Texas location came in 1965.  By the end of the 1960’s McJunkin had 29 branches in 18 states and sales approached $60 million.  Henry B. Wehrle, Jr. was elected president of the company as the second generation of family members began to take over leadership of the company.

“Those were busy times,” says Henry Wehrle, Jr., former Chairman of the Board, reflecting back, “We were growing fast and trying new things.  But the one thing we never forgot, was to focus on our core business of distribution.”

By the early 70’s the majority of the company’s business was coming from the refining and petrochemical industries, as McJunkin added branches in the gulf coast and the west coast.

“First time, on time, every time”

The 1980’s were marked by significant ups and downs for the company.  In 1980, Russ Wehrle, Henry’s brother, was elected president and Henry was elected Chairman of the Board.  The company now numbered over 900 associates.  New corporate headquarters were completed, just as the oil market crashed, putting financial pressure on the entire industry for several years.  In 1987, McJunkin cemented its position in the gulf coast with the acquisition of Grant Supply, adding 11 locations and over $100 million in sales.

In the late 80’s McJunkin renewed its focus on quality, initiating a broad based quality effort that continues to this day.  “We wanted our customers and our employees to understand that quality products and service were more than goals, they were a way of life.” says V.T. “Sparky” Adams, McJunkin’s Senior Vice President of the Eastern Region.  That way of life included extensive training and process improvements that allowed McJunkin to support its motto of “First time, on time, every time.”

“We have always understood the critical nature of our customers’ operations,” says Bob Smith, McJunkin’s Director of Quality Assurance.  “They rely on us to get the right product for severe service applications.  We take that responsibility seriously.”  Smith should know, today he performs over 30 site audits annually of McJunkin’s suppliers, taking him from forging plants in South Carolina, to valve assembly plants in South Korea.

In 1987, Russ Wehrle passed away and the third generation of Wehrles took on the reins of leadership.  Cousins Bernie and Michael Wehrle were elected to the positions of president and chief financial officer respectively.

 “One to One, Coast to Coast”

The introduction of new concepts defined much of the 1990’s for McJunkin.  The company converted its ERP system to the new FOCUS platform, providing significantly expanded order processing and material handling capabilities.  A hub and spoke system was developed and rolled out, allowing McJunkin to service the entire country with a much broader line of inventory.

McJunkin’s nationwide coverage was put firmly in place with the acquisition of the Republic Supply Company of California, which added 18 locations and $80 million in sales.

“We saw our customers becoming more national in their scope,” says Michael Wehrle, former CFO and Chairman of the Board, “Where before the business was conducted on a site by site basis, we began seeing companies leverage their spend across all their sites, nationwide.  To us that meant one thing…we needed to be there to serve them.”

Another 80 Years      

Today McJunkin is still a privately held, family run business.  The company distributes carbon, stainless steel and corrosion resistant pipe, valves and fittings, oil country tubular goods and related drilling supplies, instrumentation and controls, and numerous other products in various integrated supply environments.  Major industries served by McJunkin include chemical, petrochemical, gas distribution, gas transmission, power, paper, refining, mining, metals, oil and gas, and construction.

McJunkin is also the largest provider of integrated supply services to the fluid processing and gas industries.  This includes running storerooms, providing purchasing services, managing and replenishing zone stores and project services among others.  McJunkin operates over 100 full service branches in the U.S., Nigeria, and Puerto Rico.  Additionally, the company manages over 600 inventory locations serving a variety of customer needs.

For McJunkin, Integrated Supply is a significant growth opportunity.  “We knew the role of the supplier was changing,” says Rory Isaac, Senior Vice President of National Accounts, “We wanted to be sure that we continued to focus on our customers and their needs. Integrated Supply was one of those needs.”

Integrated Supply is the company’s way of applying their distribution expertise to the customer’s material management processes.  One way McJunkin is able to do this is through the use of technology.

“Our customers rely on us to reduce supply chain costs,” says Jim Underhill, Chief Financial Officer, “The way we are going to do that is by aggressively leveraging technology to take unnecessary steps out of the process.  For us, it’s about a relentless focus on results.  We invest in technology that will make a difference.”

Indeed the company has continued to introduce technology to many aspects of the supply chain.  Extensive use of bar code technology, inventory management systems, and automated, point-of-use disbursement systems are just some of the ways McJunkin works to remove costs.

Integrated Supply was just one of many initiatives that McJunkin identified when it crafted an aggressive strategic growth plan in 2001.  Another was growth through acquisitions. McJunkin has increased its acquisitions in the last several years [see side bar].

But through all of this the focus on service, and the people that provide that service, has not changed.  McJunkin is known for its strong culture and family atmosphere.  “There’s this deep sense of responsibility that comes with being a McJunkin salesman,” says Bill Dobbins, McJunkin’s Business Development Manager and a second-generation employee, “The company is so dedicated to its people, that you want to extend that philosophy to your customer.”

Going forward the company plans to continue to focus on its growth strategy.  In January 2007, McJunkin announced that its Board of Directors approved a substantial investment in the company by Goldman Sachs Capital Partners (GS Capital Partners), as part of McJunkin’s strategy to capitalize on its strong momentum and growth in the markets it serves.  Bernie Wehrle remains as CEO while Jim Underhill was promoted to Chief Financial Officer.

Consistent with our aggressive growth initiative, on July 11, 2007, McJunkin and Red Man Pipe and Supply Company, announced a proposed merger of equals that will make the new company one of the nation’s leading distributors of industrial and oilfield pipe, valves, and fittings.  This strategy includes further investments in technology and incremental additions to its PVF offering.  The company steadfastly maintains its focus on industrial PVF and stresses the importance of staying close to the products and services they know best.

Bernie Wehrle sums up their future outlook the following way, “The industries we serve are becoming more and more consolidated – the challenge for us is to continue to add value.  We’ve done that for 80 years and we have every intention of doing that for 80 more.”

Looking out of the main boardroom in McJunkin’s headquarters, one can look down and see the Kanawha River flowing silently past.  In much the same way, McJunkin continues to quietly go about its business of delivering product, meeting customer needs, developing its people and adding value in the changing world of industrial distribution.