For Randy Velarde, owner and president of the Houston-based The Plaza Group, running a company has never been about simply surviving. No, for this entrepreneur, success has hinged on aggressive attempts to land new business, reach new markets and stay ahead of the corporate curve. Even amid the recession, Velarde's company has thrived, largely based on a forward-thinking attitude and a willingness to take a risk.
Now in its 15th year of operation, The Plaza Group, a solvent and petroleum-chemical marketing business has expanded domestically through key strategic deals. It's also expanded into overseas markets.
"We expect to have an even better year than 2009," said Mr. Velarde, owner of The Plaza Group, in looking ahead at 2010. "We have already seen improvement in some of the areas hit hardest by the economic issues."
The nation's financial challenges have ironically brought mixed results for the Houston-based company that was No. 52 on the HispanicBusiness 500 in 2009, with $130 million in revenues, up from $111 million the year prior. It has 15 employees.
The Plaza Group sells and distributes products for low-cost producers of petrochemicals. It's been a challenging year for the industry. U.S. chemical plants were operating at an anemic 71 percent of capacity, according to the American Chemistry Council, an industry trade group, resulting in the loss of more than 55,000 jobs since the recession began. The industry employs about 800,000 people nationwide.
As large companies that produce petrochemicals downsize, they turn to specialty firms such as The Plaza Group to distribute, market and sell those products on the market.
When economic times were robust, some petroleum and chemical companies would do this work in-house. Now many have turned to The Plaza Group.
On the other hand, the economy has hit industries that The Plaza Group sells to, such as the housing market. For example, The Plaza Group markets a certain kind of resin that is used as glue for plywood.
For the privately owned company, growing and adapting successfully to changing markets is a longstanding tradition. In fact, from the moment of its inception, Mr. Velarde has been setting the tone and staying one step ahead. He came up with the idea for the company in 1993, when he worked for Texaco Chemical in the sales and marketing department. That year, Texaco decided to sell that portion of the company to Huntsman Corporation.
Mr. Velarde, however, had other ideas. He suggested that he and three of his co-workers start a company to market some of the petrochemicals produced at Texaco.
Texaco eventually bought into the idea and formed a contract with The Plaza Group. "In 1993 I was presented with a once-in-five-lifetimes opportunity to start up a company for these non-core products that Texaco was kind enough to hand over to us," Mr. Velarde said.
The company officially launched in 1994. Three years later, Mr. Velarde bought out his partners and landed contracts with other major oil companies. His revenue jumped from $2.7 million in 1997 to $92 million in 1998. And in 1999, Mr. Velarde was named HispanicBusiness Magazine's Entrepreneur of the Year.
Today, The Plaza Group acts as a sales agent for companies such as Shell, BP and Frontier Oil and is expanding its reach, partnering with companies that make products for plastics, rubber and solvents.
In these tough financial times, The Plaza Group has successfully branched out beyond traditional petrochemical companies. In July the company signed a multi-year deal with Blue Island Phenol to market phenol, acetone and other products. It's also stepping up efforts to market chemicals used in aromatic and oxygenated solvents.
"We have been very fortunate to be able to acquire new business during a time when some of our longstanding businesses have in fact experienced some downturn," Mr. Velarde said.
Much of the recent growth has come as a result of partnerships with companies overseas. About 35 percent of its total business is with foreign companies, a percentage that has grown steadily in recent years.
"We have seen a continued increase in the amount of business we do outside of our borders," Mr. Velarde said. "We provide non- U.S. companies fast and efficient access to the U.S. market." The company has 20 different suppliers and contracts with more than 200 different companies.
Velarde, who is married with four adult children, received a degree in chemical engineering from the University of New Mexico. Out of college, he wasn't exactly sure what he would do next.
His older brother was a chemical engineer, and "I thought I would just follow the path of what he was doing." But after working in the business for more than a decade, Mr. Velarde realized that he was more suited for a commercial role than a traditional engineering job. Very early on, he said, he realized that teamwork was his key to success.
"Very early on I realized I really wanted to do something outside of a big company," Mr. Velarde said. "I was always looking for the right opportunity to come along and in late 1993 it did."
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