November 22, 2004
On the waterfront | P.D. Merrill sells Merrill Marine Terminal Services in an effort to ensure its future
By Sean Donahue
P.D. Merrill sees an evolutionary pattern in the 75 years that have passed since his father founded his transportation business in Cumberland Center. What started in 1929 as a trucking operation gradually developed to include a laundry operation and a concrete supplier. By 1977, the business expanded into a new Portland waterfront cargo operation originally envisioned as a coal transfer facility, feeding demand sparked by that decade's oil crises. The expected demand never materialized ˆ Maine industries shifted to more environmentally friendly fuel alternatives such as biomass ˆ leaving Merrill Marine Terminal Services scrambling to find other cargo to handle.
That tradition of adapting to a changing market and hustling for new business carries on in the latest step in the company's evolution, says Merrill, who took over as president of the company after his father's death in 1982. On Nov. 8, Merrill sold the company's operating assets (he's keeping the land) for an undisclosed sum to New Hampshire-based Sprague Energy, which operates a petroleum transfer facility across the Fore River in South Portland. Sprague, which is owned by Swedish conglomerate Axel Johnson Group, offers the financial clout the operation needs to stay competitive and potentially keep growing, says Merrill.
"We had to look down the line a little bit ˆ because I'm not going to live forever ˆ and determine the best outcome for the business," says Merrill, 60. "The ideal outcome from my standpoint was that we find somebody that was well capitalized and had the commitment to keep doing what we're doing."
Today, Merrill's Marine Terminal on the west end of the waterfront receives about 90 ships a year, primarily exporting scrap metal and wood pulp worldwide and importing newsprint from Newfoundland. But in order to retain that business, Merrill says the operation needs to add another warehouse to the six already on its 15-acre site, at a cost of about $3 million.
The extra space would eliminate the time and expense of trucking some cargo to the company's rented storage facility in South Portland, which could help the operation stay competitive with other facilities on the East Coast.
When potential state funding for a warehouse fell through due to the Legislature's failure to compromise on a bond package this year, Merrill decided the next best option was to find a bigger company that could make the required investment. As part of the purchase, Sprague has promised to build a new warehouse. "We could have financed the warehouse ourselves, but we might have raised our debt burden so high that a significant reversal in business could put us in tailspin," Merrill says. "That was a disaster we managed to avoid for 20 years, and I didn't want to expose the company to that kind of risk."
Avoiding undue risk is particularly important to Merrill, he says, given that he's guided by the same goal that inspired his father to develop the facility 25 years ago: to preserve commerce as an integral part of Portland's waterfront. Since then, as the facility has grown into a waterfront fixture that employs 42 full-time and up to 25 part-time workers, that sense of responsibility has become more acute, says Merrill.
In fact, Merrill hopes he's orchestrated a transaction that won't change much about the operation. Sprague will retain Merrill's existing employees, the Merrill name and the company's wharf rat logo. Even Merrill himself intends to stay on as a consultant through the warehouse planning and construction process, which he expects to take a year. "Certainly it is something that's hard to let go of, but that's not the point. The point is to have something that's built to a healthy scale and propel it to the next step," says Merrill. "I feel much better about doing that than clinging to the rigging and hoping for the best."
That tradition of adapting to a changing market and hustling for new business carries on in the latest step in the company's evolution, says Merrill, who took over as president of the company after his father's death in 1982. On Nov. 8, Merrill sold the company's operating assets (he's keeping the land) for an undisclosed sum to New Hampshire-based Sprague Energy, which operates a petroleum transfer facility across the Fore River in South Portland. Sprague, which is owned by Swedish conglomerate Axel Johnson Group, offers the financial clout the operation needs to stay competitive and potentially keep growing, says Merrill.
"We had to look down the line a little bit ˆ because I'm not going to live forever ˆ and determine the best outcome for the business," says Merrill, 60. "The ideal outcome from my standpoint was that we find somebody that was well capitalized and had the commitment to keep doing what we're doing."
Today, Merrill's Marine Terminal on the west end of the waterfront receives about 90 ships a year, primarily exporting scrap metal and wood pulp worldwide and importing newsprint from Newfoundland. But in order to retain that business, Merrill says the operation needs to add another warehouse to the six already on its 15-acre site, at a cost of about $3 million.
The extra space would eliminate the time and expense of trucking some cargo to the company's rented storage facility in South Portland, which could help the operation stay competitive with other facilities on the East Coast.
When potential state funding for a warehouse fell through due to the Legislature's failure to compromise on a bond package this year, Merrill decided the next best option was to find a bigger company that could make the required investment. As part of the purchase, Sprague has promised to build a new warehouse. "We could have financed the warehouse ourselves, but we might have raised our debt burden so high that a significant reversal in business could put us in tailspin," Merrill says. "That was a disaster we managed to avoid for 20 years, and I didn't want to expose the company to that kind of risk."
Avoiding undue risk is particularly important to Merrill, he says, given that he's guided by the same goal that inspired his father to develop the facility 25 years ago: to preserve commerce as an integral part of Portland's waterfront. Since then, as the facility has grown into a waterfront fixture that employs 42 full-time and up to 25 part-time workers, that sense of responsibility has become more acute, says Merrill.
In fact, Merrill hopes he's orchestrated a transaction that won't change much about the operation. Sprague will retain Merrill's existing employees, the Merrill name and the company's wharf rat logo. Even Merrill himself intends to stay on as a consultant through the warehouse planning and construction process, which he expects to take a year. "Certainly it is something that's hard to let go of, but that's not the point. The point is to have something that's built to a healthy scale and propel it to the next step," says Merrill. "I feel much better about doing that than clinging to the rigging and hoping for the best."
Most Recent
Most Recent
Comments