Finance Organization and Long-Term Planning
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AUO_B6022_M1_L8_S1.html.htmlGenesis Energy, L.P.
Genesis Energy, L.P.
Ticker: GEL Exchange: NYSE Key Statistics: http://finance.yahoo.com/q/ks?s=GEL SEC Filings: http://finance.yahoo.com/q/sec?s=GEL+SEC+FilingsGenesis Energy, L.P. is a Houston-based, limited partnership that focuses on the midstream segment of the oil and gas industry, pulp and paper mills, and other industries, catering to a specialized and diverse clientele. It consists of three divisions—pipeline transportation, refinery services, and supply and logistics—and owns assets that include refineries, pipelines, tanks and terminals, marine transport operations, and trucks and truck terminals. The hub of Genesis Energy’s activities centers on the Gulf Coast of the United States, but its activities extend as far north as British Columbia and as far east as New York. Though Genesis Energy has only been in existence since 1996, components of it have been around for years. Its Refinery Services team, for example, extends the more than 30 years of operating experience of TDC and its predecessors. The Genesis Energy Trucking component, on the other hand, has been in service since 1937.
A Hypothetical Opportunity and Challange
Now, let’s get hypothetical and play the “What if?” game. Imagine for the assignments in this course that Genesis Energy wants to get a larger share of the global energy market. It realizes, however, that with only one facility outside of the United States, it will need to do a good deal of expanding before it will be able to capture the share of market it wants.
With an eye to the challanges of that endeavor, Genesis Energy has expanded its management team. This newly-expanded team, which will oversee domestic and international operating facilities, consists of a general operations manager, an accountant, a pair of energy experts, a marketing manager, a production manager, and a customer service manager. All of these individuals, with the exception of the production manager, were outside hires.
But success in the endeavor will also take time—time and a plan. In an intensive planning session, the management team and company stakeholders put together a five-year strategic plan for accomplishing the expansion. Both the team and stakeholders believe Genesis Energy provides products, services, and expertise that will attract governments and mid-sector companies around the world in both developed and emerging economies.
The management team is now charged with optimizing all company operations and expanding the company’s sale of services and goods to new markets, beginning with the Caribbean and Central and South America. This will require enough capital for new facilities, resources, staff, and marketing, and Genesis Energy hopes to avoid the need to find more equity investment to fund the expansion. But it isn't clear that enough funds can be raised from expanded sales and profits, and obtaining loans from banks can be very challenging, even for established companies like Genesis Energy.
