Ai interview – Wayne Petersen, President and General Manager, Haltermann Solutions

What do the Dallas Cowboys, the Alamo, and Haltermann Products all have in common? Answer: They all have deep roots in the great State of Texas.

Haltermann Products Test and Reference Fuels (a division of Johann Haltermann, Ltd.) with business offices located in Houston, Texas, is North America’s leading manufacturer of Test and Reference fuels for the automotive industry. Over the past several decades, engine and part manufacturers, test laboratories, government entities, and companies that manufacture gas and oil additives have turned to Haltermann for their often demanding and complex gasoline and diesel test fuel requirements.

For those not recognizing the Haltermann name, you might know them by another name. Haltermann’s long history dates back to 1963 when it first produced test fuels as Howell Hydrocarbons in San Antonio, Texas. The company was moved to the Houston area in 1991 and was re-named Howell Hydrocarbons and Chemicals. Then, in 1997, Howell Hydrocarbons and Chemicals was purchased by the Gower family who changed the company’s name to Specified Fuels and Chemicals. In January of 2000, Specified Fuels and Chemicals was purchased by Ascot PLC who merged Specified Fuels with another of their companies, Haltermann Products of Germany. In June of 2000, all holdings of Ascot PLC were acquired by The Dow Chemical Company who kept the Haltermann name. Finally, in February 2008, Haltermann Products Test and Reference Fuels of North America was divested by The Dow Chemical Company to Indianapolis-based owners who have a long history in producing specialty petrochemical products. Through all of these ownership changes, Haltermann continued to reliably provide its customers with quality fuels. We had a chance to speak with Mr. Wayne Petersen, President and General Manager of Haltermann Products, who took the opportunity to answer several questions.

AI. First, I understand that you have some exciting news for our readers. 

Petersen. We do have exciting news. Sometime in mid-August we will be changing our market-facing identity from Haltermann Products to Haltermann Solutions. This is a reflection of our recent diversification efforts as we are becoming more than just a test and reference fuel supplier to many of our customers. We provide “solutions” for anyone that has special, unique or demanding fuel requirements. For example, we now sell fuels and propellants for use in the aerospace industry as well as the automobile racing market, both which have demanding requirements and unique formulations. The new identity is a reflection of what we offer to the fuels community. We will also have a new web address up and running at the same time: www.haltermannsolutions.com. I need to point out that our company name, or legal entity, has not changed. We are still a division of Johann Haltermann, Ltd.

AI. What is a Test and Reference fuel and where is it used? 

Petersen. A test or reference fuel is a gasoline or diesel based product that is manufactured to a very specific distillation and property specification, therefore providing control and consistency needed in test protocols. These products are sold for a variety of markets and applications. While this is not an all inclusive list, here are a few examples: 

• Gasoline and diesel engine emission testing 

• Gasoline and diesel engine development 

• Catalyst aging evaluation 

• Gasoline and diesel engine oil quality or certification testing 

• Portable power equipment testing and development 

• Marine two-stroke oil quality evaluation 

• Turbine engine testing 

• Aerospace propulsion 

• Automobile Racing 

• Aviation power plant testing

AI. Are you seeing any new generations of fuel types on the horizon? 

Petersen. Yes. In addition to a continuing stream of new diesel and gasoline products designed to meet specific customer requirements, new technology has caused an increased demand for “green” products. These include fuels such as E20, E22, E85, E100, ethanolic fuels from a variety of sources, methanolic fuels, as well as a wide variety of biodiesel fuel formulations – all of which fall well within Haltermann’s capabilities. In addition, we have also recently seen a resurgence of requests for higher natural sulfur containing fuels to test products for emerging markets. High sulfur fuels are becoming increasingly more challenging to produce due to a move to lower sulfur containing feed stocks in North America. Haltermann technology allows us to continue to successfully produce these fuels.

AI. How many fuels does Haltermann manufacture? 

Petersen. While we inventory only a select number of high-volume fuels for quick delivery such as US Federal Tier II EEE gasoline, Lube Certification EEE gasoline, US Federal Low Sulfur Certification Diesel fuel, and US Federal Ultra Low Sulfur Certification Diesel fuel, we also maintain a list of nearly 1000 active fuel formulations which are available on a made-to-order basis. This list isn’t static, however; it keeps growing due to our specialization in formulating custom-blended fuels to specific customer specifications. We receive these requests regularly.

AI. Do prices of these fuels follow the price of a barrel of oil or consumer prices of gas and diesel at the pump? 

Petersen. The short answer is that the prices are related to the price of oil, but only to a point. A little more information about Haltermann’s manufacturing strategy would be helpful to better understand the answer to this question. Haltermann does not “refine” petroleum products in order to manufacture our fuel. We also don’t start with a gasoline “base” product as a component of our blends. Instead, we blend a combination of specialty refinery streams to achieve the desired distillation and property specifications. This technique, which we have been perfecting for almost 50 years, offers a tremendous amount of flexibility to help us achieve the often demanding fuel specifications required by our customers. While many of these blend stock streams are certainly related to petrochemical feed prices, many are considered specialty chemicals. Prices of these types of products depend on their specific markets and are not necessarily tied to the barrel of oil or consumer gas and diesel pump prices. 

When the price of these feed stocks rise, we do have to capture the increases by implementing price increases for our products. However, when prices of these specialty feed stocks soften, we do offer our customers price concessions, which we have done several times over the past few years.

AI. Tell us about your manufacturing facilities. 

Petersen. We have several sites located in Michigan and Texas. These facilities all have unique capabilities enabling us to be able to offer our customers the maximum in service and flexibility. However, this hasn’t always been the case. Until 2007, most of our fuels were produced in Texas at our Channelview facility. At that point, we made a deliberate shift in our manufacturing strategy to develop a much larger footprint in the Michigan area, an ideal location given the close proximity to a majority of our customers. This move has not only resulted in better service but also lower overall freight costs for many of our customers. 

In Michigan, we utilize three facilities. First, we utilize a terminal where we produce our high-volume, inventoried fuels that were discussed previously. We have the ability to ship railcar and truckload quantities of fuel from this location. A second facility specializes in producing smaller quantity, custom made-to-order fuels. While truck load quantities can be produced and shipped from this location, the more common quantities are drums, totes, and pails. We utilize yet a third Michigan facility for storage of finished drummed fuels. 

We also maintain a manufacturing presence with 3 sites in Texas for our San Antonio based customers and other regional clientele. 

Having multiple sites gives us a tremendous amount of agility in responding to customer needs. We select the assets needed for a specific fuel based on customer locale, volume, fuel type, and logistics requirements. 

I would be remiss if I didn’t mention our other division’s capabilities for custom chemical processing. Their world-class capabilities include large scale distillation and fractional distillation, reactive distillation, fixed-bed hydrogenation, oligomerization, esterfication and transesterfication reactions, aldol condensations and isobutylene reactions. These capabilities allow us to manufacture unique feed stocks, in-house, when required.

AI. How does Haltermann Products ensure quality for its customers? 

Petersen. Almost 50 years of experience in providing quality fuels and meeting demanding customer requirements tends to speak for itself. Haltermann also maintains ISO 9001 certification.

AI. Has the current economic climate had an impact on Haltermann? 

Petersen. Given the challenges faced by the automotive industry in this difficult economy, all associated companies, including Haltermann, have been and continue to be impacted. In the past year alone, we saw one Test and Reference fuel manufacturer make an orderly exit from the market. As you are also aware, two major OEMs filed for bankruptcy but quickly re-emerged. Testing / R&D budgets have clearly been impacted. Fortunately, Haltermann Products implemented a restructuring plan a few years ago that has positioned us well for this challenge. We also implemented a diversification strategy in targeted non-automotive specialty fuel markets, also helping dampen the economic impact of cyclicality in the automotive market. We have experienced several economic cycles over the history of our company. While this trough is certainly deeper and longer than we have seen in the past, we are confident that we will weather this one as well. 

AI. What would a customer say about how it is to deal with Haltermann on a project? 

Petersen. I think that three attributes might come to mind. First, I believe that they would say Haltermann consistently delivers fuel of the highest quality meeting their exacting specifications. This is a result of nearly 50 years of experience developing, formulating, and manufacturing specialty fuels. 

Next, I would hope they would say that we are agile and always seem to find a way to make very unique fuels in a relatively short period of time. The multiple and diverse manufacturing sites we utilize greatly helps us deliver fuels quickly to our customers.
Finally, I think that our customers would say they receive prompt, personal, attentive service from our employees. We have made it a point over the past few years to strengthen our customer service focus by deploying additional manpower to our customer service team and market- facing personnel.

AI. Who can readers contact should they have any further questions? 

Petersen. They can contact our National Account Manager, Ms. Elisha Petersen, who can be reached at (313) 806-9172 or epetersen@jhaltermann.com. Additionally, readers can reach members of our Customer Service group directly by using our toll-free number: 1- (800) 969-2542. Also, check out our web page www.haltermannsolutions.com