Fuel has been the largest part of Chain Oil Co.s business, at least in terms of volume. But the Wixon, Mich., oil jobber sold those operations last month, putting all its eggs in the basket that is its lubricant business. Officials said they see more room in the lubes industry for a small company to remain viable.
Located in an outer suburb of Detroit, Chain Oil is a 61-year-old, family-owned company that supplies customers in Michigan and northwest Ohio. Until last month, it had three segments. The largest, commercial fuels, primarily served the construction industry. Next in size was the lubricants business, which offers industrial lubes, metalworking fluids, solvents and cleaners. The smallest segment sold heating oil to households.
On Oct. 17, the company announced that it had sold the commercial fuels operations to RKA Petroleum, of Romulus, Mich., and the home heating business to Corrigan Oil, of Brighton, Mich. Chain officials said the company divested those activities, being unable to procure supplies in the wake of disruptions caused by hurricanes Katrina and Rita.
[Wholesale fuel] supplies were very tight because of the disruptions caused by the hurricanes, and the little companies simply got shut out, Public Relations Coordinator Jana Warford said. We were getting squeezed so bad we just decided we couldnt go on with those operations.
The company now turns its full attention to the lubricants business, which operates from a 40,000-square-foot warehouse and which has its own brand – Super K. Chain said it aims to grow by lining up accounts with customers of sister company Almetals Inc., a supplier of specialty metals to auto and consumer goods industries.