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Valero Signs Its Largest Agreement with a Single Distributor; Deal with DB Companies Adds 89 Stations to Valero's Distributor Network.

Energy Editors/Business Editors

SAN ANTONIO--(BUSINESS WIRE)--Nov. 11, 2003

Valero Energy Corporation (NYSE:VLO) announced today that it has signed a 10-year agreement with DB Companies to supply its 89 retail sites and convert them to the Valero brand. With an expected volume of 750 million gallons of fuel, it is the largest agreement that Valero has signed with a single distributor.

Based in Providence, Rhode Island, DB Companies owns sites located in New York, Connecticut, Rhode Island and Massachusetts. The company's sites include convenience stores, branded DB Marts, that offer a wide variety of products ranging from Village Deli sandwiches to beverages and snacks. The companies expect to begin converting the sites to the Valero brand immediately.

"We are very excited about our agreement with DB Companies because it's the single largest distributor agreement in Valero's history," said Ken Applegate, Valero's vice president of wholesale marketing. "What's more, we are very proud to be associated with a distributor of Art DeBlois' caliber. He's well-respected in the industry and has played a leadership role in SIGMA for many years. In addition, the DeBlois family has been in the petroleum business for more than 75 years and has built a great network of high-quality sites."

"Joining the Valero network is an exciting development for DB Companies," said Art DeBlois, president of DB Companies. "Valero's wholesale-focused strategy, great brand image and competitive offering will allow DB to continue providing its customers with the highest-quality products and exceptional value.

"Since today's retail environment is very competitive with the consolidation in the refining/marketing business and the smaller number of players, Valero's product supply capabilities and strong financial resources made a difference to DB. Valero is a strong partner because the company is such a large purchaser of crude oil, has two refineries in close proximity to New England, and has the resources to invest in its refining and marketing system.

"And, even though Valero is a very large company, it places a premium on providing great customer service and respecting the dignity of every individual - values that DB Companies delivers on every day," said DeBlois.

Valero Signs Popping Up Across the East Coast

At the end of last year, Valero formed an East Coast sales team and for the first time, began aggressively marketing its Valero brand to jobbers throughout the Eastern United States. As part of its new brand program, the company is picking up the base conversion costs for sites that qualify for the Valero brand, providing brand support through credit card solicitations and targeted advertising, providing a fleet services program, and offering many other competitive programs.

This year alone, Valero has increased its branded jobber network by 625 sites, and more than 320 of those sites are on the East Coast. Today, the company has approximately 2,400 sites and has plans to nearly double its network to 4,300 sites by 2006.

"Our distinctive teal and yellow signs have already gone up at stations stretching from Bangor, Maine, to Miami, Florida," said Applegate. "We believe the Valero brand has been so well received because we have a strong brand image and offering.

"Expanding our branded distributor network over the next few years is a big part of Valero's growth strategy. There are tremendous opportunities to bring quality distributor sites into our network because of the consolidation in our industry and the fact that some companies are not putting as much emphasis on expanding their distributor networks. So we're going to continue aggressively marketing our Valero and Diamond Shamrock premier brands to take advantage of this window of opportunity," he said.

About Valero

Valero Energy Corporation (NYSE:VLO) is a Fortune 500 company based in San Antonio, with approximately 20,000 employees and annual revenues of more than $30 billion. The company currently owns and operates 14 refineries in 13 locations throughout the United States and Canada. Valero's refineries have a combined throughput capacity of over two million barrels per day, which represents approximately 10 percent of the total U.S. refining capacity. Valero is also one of the nation's largest retail operators with approximately 4,000 retail outlets in the United States and Canada under various brand names including Diamond Shamrock, Ultramar, Valero, Beacon and Total. For more information about Valero, visit the company's web site at www.valero.com.

About DB Companies

DB Companies is a privately-owned company that has served neighborhood communities since 1927. Now, in its third generation of leadership, the company embraces a corporate culture based on values you'd expect from a close family: mutual respect, shared responsibility, and commitment to a common goal. Today, the DB Mart family includes over 900 talented and friendly people, dedicated to serving our customers throughout New England and New York.
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Publication:Business Wire
Geographic Code:1USA
Date:Nov 11, 2003
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