Valvoline, the worldwide motor oil and lubricant company based in Lexington, recently staged a 150-year company anniversary celebration at Rupp Arena. It featured 1,500 guests, including executives, motorsports stars and 500 Valvoline retirees.
The commemoration came as Valvoline begins to execute a yearlong plan to separate itself from parent company Ashland Inc. and move into a new building of its own in Lexington. Valvoline employs about 700 employees here.
“We’re at a point in the company’s history where Ashland, which is mostly a chemical business, and Valvoline would operate more effectively by being independent,” Valvoline president Sam Mitchell told Business Lexington. “They would each have their own set of investors who are aligned with their company strategies and their own board of directors that are all focused on the same objectives. We think this will create shareholder value.”
Ashland began transforming itself a decade ago. In the early 2000s it was a conglomerate in oil refining and specialty chemicals but with side endeavors such as highway construction and paving and distribution, according to Gary Rhodes, Ashland’s director of corporate communications.
“We were in some very cyclical, low-margin businesses. Over 10 years, management transformed us to focus more on specialty chemicals. At the same time, we’ve had this great Valvoline business, which has been extremely healthy,” said Rhodes. “We realized we had two well-established business platforms and now was the time to prepare each for a life as an independent company. Valvoline will be able to invest its own resources and set up its company to grow even faster. It is a well-known consumer brand. Ashland is much less so.”
Mitchell said the most important item on Valvoline’s agenda once the split is complete is to maintain its recent strong business performance. “We’re celebrating the end of our Fiscal 2015 with another record year, and we’re confident we can continue that track record,” said Mitchell.
Valvoline estimates that in the past century and a half it has produced 8 billion gallons of oil and has lubricated more than a billion vehicles. Besides lubricating products, Valvoline has had success with its Valvoline Instant Oil Change shops. There are 950 stores nationwide with plans for many more. One third of them are company-owned; the rest are franchised.
Valvoline was acquired by Ashland in 1950 and moved its headquarters to Lexington 30 years later. Mitchell says the commitment to the new building “shows that we plan to be here a lot longer. It’s been a great relationship for us. This is a great place to live.”
Ground will be broken later this fall for Valvoline’s new building, which will be built on Ashland’s campus off Blazer Parkway in southeast Lexington. It is expected to open in the spring 2017, according to Rhodes.
“It’s great news for Lexington because a well-known, worldwide brand, Valvoline, will continue to be based in Lexington and in a new building,” he said.
There likely will be some shifting of employees in the transaction. Ashland and Valvoline have their own sets of employees but also share what are called “corporate resource group employees,” who work in such areas as communications, human resources, accounting, finance, law and more. Those resource employees will have to be regrouped into each independent company. Rhodes said Valvoline has growth plans and planners are trying to confi rm the exact size of the new building so it can accommodate all employees by opening day.
Marketing will continue to be vital for Valvoline, which is established in about 150 countries worldwide.
“We work with a lot of distributor partners in those countries,” said Jamal Myashsher, director of marketing for Valvoline. “It’s really about building awareness of the Valvoline brand and the heritage and history that we have here in the U.S. to establish equity around the world.”
Valvoline also is heavily invested in the motor sports world. The company celebration at Rupp Arena featured two of its sponsored race cars and an onstage interview session with NASCAR superstar Dale Earnhardt Jr. and racing owner Rick Hendrick, with both taking questions from the audience.