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Staff Reporter

You’d never know it looking at Merrimac Energy Group’s sales figures, but owner Mary Hazelrigg says revenue growth isn’t a top priority.

The Long Beach-based wholesaler of energy products saw revenues jump 50 percent last year, from $14.5 million to $21.7 million, primarily due to the addition of a new product offering: natural gas.

The revenue growth moved the six-employee firm into 18th place on the Business Journal’s List of the biggest women-owned businesses based in L.A. County.

And Hazelrigg, the company’s president and sole stockholder, is “optimistically” projecting $30 million in revenues for 1997 along with improved profitability from product diversification.

Hazelrigg named her company Merrimac as a loose combination of her first and maiden names, Mary McArdle. “But I didn’t realize at the time that it was the Merrimac that lost the (infamous Civil War “ironclad” naval) battle with the Monitor,” she added.

Hazelrigg said the company isn’t “trying to be the biggest” local player in the highly competitive, increasingly deregulated energy wholesaling field. “But we’d like to be the most profitable (in terms of margins) and I think we can achieve that goal.”

“We’re doing fine; we’re doing well,” she said, declining to offer specific profit figures but adding that Merrimac has been profitable every year since she founded the company in 1988.

Hazelrigg, who began her energy business career in 1981 working at a local petroleum refiner, said the addition of natural gas probably accounted for around 80 percent of Merrimac’s revenue growth last year.

But as with most new product lines, the expansion by the “new kid on the block” into the natural gas arena entails “a learning curve” likely to take one to two years.

Merrimac expanded into natural gas from its roots in the “ground fuels” business, in which Hazelrigg has worked for the last 15 years.

The company has traditionally bought its petroleum-based products from the major oil refiners to meet the needs of its clients.

Merrimac works with those clients primarily big utilities in California and nearby states, along with large corporate and industrial accounts and various government agencies to negotiate cost-effective energy procurements. To accomplish this, Merrimac frequently buys stakes in big energy “pools” assembled by the major suppliers, and coordinates deliveries through specialist common carriers.

As Merrimac became more established, Hazelrigg has looked to expand by offering a broader array of energy-related products and services a menu that now includes electricity and various “alternative” fuels in addition to gasoline, diesel, propane and other ground fuels.

“Our goal is to be a full-service energy marketer while still remaining relatively small compared to our bigger competitors,” Hazelrigg said.

And the keys to achieving that goal are forging strong relationships with the industry’s biggest suppliers, and providing sophisticated, customized supply programs for Merrimac’s end-user clients who aren’t inclined to dedicate substantial resources to an in-house energy procurement operation.

“What we’re really doing to a great extent is providing information on a personalized basis, from something of an insider’s view of the customer’s business,” Hazelrigg explained.

And that entails endless hours on the phone and pouring over countless industry pricing sheets and supply information sources.

But maintaining profitability and a good reputation also entails knowing when to pass on certain potential opportunities.

“If someone else is truly more capable of handling something, we don’t hesitate to tell the client and that helps cement the parts of the business where we excel,” Hazelrigg said. “For instance, it would be difficult to supply ground fuels to people in Boston from here at least not at the level of service we feel we should be giving.”

While Hazelrigg is reluctant to provide a list of corporate clients for fear of alerting competitors, she did identify one high-profile long-time customer Toyota Motor Sales USA in Torrance that appreciates Merrimac’s reluctance to bite off more than it should.

“Mary and her people have been very competent and very responsive to our needs over the last eight years, starting as a local source (of gasoline) for a portion of our fleet vehicles,” said Dale Carmichael, Toyota USA’s National Cost Savings Manager. “But when we shared our national requirements with her, she was interested in expanding. But she was also realistic enough to tell us that she’d have difficulty (supplying) some areas of the country. So she passed.”

Hazelrigg said the continuing deregulation of the electricity industry presents further opportunities for Merrimac.

“We’re already doing some groundwork, working directly with customers to anticipate how we can save them more money. It could have a huge impact on us eventually, and I’m expecting (electricity deregulation) will have a positive effect on our revenues and profits in 1998.”


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