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Steady acquisition key to growth at McDougall Energy

Along with his two siblings, president Darren McDougall represents the third generation of family to run McDougall Energy. It began in Thessalon in 1945, and is now headquartered in Sault Ste. Marie, with operations across the country.
Along with his two siblings, president Darren McDougall represents the third generation of family to run McDougall Energy. It began in Thessalon in 1945, and is now headquartered in Sault Ste. Marie, with operations across the country.

Anyone who’s operated a family company might argue that when it’s your name on the wall of the business, the stakes for success are higher.

No one understands that better, perhaps, than McDougall Energy, a family-owned, Northern Ontario-based business, which has grown from its early days as a regional distributor for Esso into a major presence in the fuels industry across the North.

In 1945, Allan McDougall founded a fledgling business, serving as the regional Esso agent in Thessalon. More than six decades later, the business is in its third generation of family ownership, and McDougall Energy is still run by the same set of family values Allan started out with – just on a much larger scale.

The company, which maintains its headquarters in Sault Ste. Marie, has operations in Ontario, British Columbia and Manitoba, with more than 200 employees, and it’s earned a spot on Deloitte’s list of Canada’s Best Managed companies two years in a row.

After joining the company in 1987, president Darren McDougall has guided the business with a targeted approach to expansion, making 43 acquisitions – five since 2011 alone – with what he calls an organic approach to growth.

“Back then it was a strategy that, when I looked at the marketplace, I saw a big opportunity to consolidate the industry and buy a lot of companies,” McDougall said.

“Sometimes when we want to get into a market, the quicker and more strategic way is to buy an existing company in that market and then grow organically from there, instead of just starting out organically and opening up an office. So we’ve done a combination of that over the years.”

The fuel industry is a market dominated by similar, family-run businesses, so McDougall said he understands the concerns and needs of those business owners who don’t have a succession plan and have made the difficult decision to sell the business.

Many have developed and fostered close ties with their customers, employees and communities over the decades.

“We try to keep as many employees on as we can, and a lot of these family businesses that are selling, that’s a big concern of theirs,” McDougall said. “They’ve got 20- and 30-year relationships with their employees and their customers, obviously, so we really make sure we have those discussions with the companies we’re buying about what’s important to them and that we’re committed to keeping as many employees on as we can.”

It’s important that, once those employees join McDougall Fuels, they understand and adapt to the company values and culture, McDougall said.

A corporate planning program ensures employees understand where the company’s going, where it’s come from and why it’s going in the direction it’s going, he added.

Despite its growth, McDougall has worked hard to maintain its community involvement, formalizing its giving plan by launching the Community Investment Program, which directs the company on how to provide sponsorships and donations.

Areas of focus include education; health care; green initiatives; and recreation, arts and culture. Most recently, the company donated $5,000 to the Health Sciences North Foundation in Sudbury, designating the donation for the hospital’s Family and Child Program. Imperial Oil has matched the donation through its Esso Community Program (McDougall has been an Imperial Oil distributor for 68 years), bringing the total donation to $10,000.

McDougall said even though the company can’t support every initiative, it’s proud of the communities in which it operates and sets aside money every year to contribute where it can.

“I grew up in a small community and I understand the importance of community,” McDougall said. “We’ve bought a lot of companies in smaller communities across Ontario and we understand the importance of keeping local jobs and having a local presence within these communities and participating in them and giving back.”

Going forward, the company plans to maintain its plan of steady growth and expansion. Its next acquisition – “a fairly significant” one, McDougall said – was set to close on Dec. 1.

Like so many companies, McDougall said the business prospers because of the people who work for it. A company can have the best technology, equipment or buildings, but it won’t work without the right people in the right positions, he said.

“We always try to treat people with respect, internally and externally,” McDougall said, “and that’s how we continue to grow.”