Lake House, Boat, Grandson—One Sweet Spot For Koloroutis

Last April’s announcement was as trenchant as it was concise. George Koloroutis, CEO of Frederick, Md.-based ThompsonGas, was retiring following six years at the burgeoning company. Over his tenure the enterprise grew to have a coast-to-coast footprint and annual sales that spiked more than 500%.

“George has been absolutely instrumental in driving growth at ThompsonGas,” said CFO Dave Franchak. “With George at the helm, our company has gone from a Mid-Atlantic propane marketer to a national propane distributor. His insight and leadership will certainly be missed. We wish him all the best in his retirement.” Koloroutis’ long-time colleague Jeff Kerns will succeed him as CEO.

“I’ve deeply enjoyed my time with ThompsonGas,” Koloroutis commented at the time. “I’m looking forward to enjoying all that retirement has to offer and I know this company will continue to perform at an extremely high level.”

For many, enjoying retirement may mean time with family, weekday golf and ballgames, leisure travel, pursuing a hobby, or perhaps just puttering around the house. As his July departure loomed and his successor was selected after a national search, Koloroutis says his career review and decampment strategizing led him to conclude he would take the summer off and unwind — enjoy his Midwest lake property and watercraft — shadowed by his grandson, Lochlan, toddling along.

However, come autumn he would probably reenergize Propane Concepts LLC, the consultancy he founded following a more than 21-year career at Ferrellgas and through which he joined ThompsonGas in 2012, thereafter serving as executive vice president and chief operating officer at the firm prior to assuming the CEO post. So much for puttering.

At the time of this writing, he was preparing to go boating with friends, bob up at a fish fry, and check out a water skiing show. “I’m looking forward to teaching my grandson how to fish,” he says, “and I’m fortunate to be able to take some time off over the summer into fall. The longest vacation I’ve been able to take since I can remember has been seven days, more likely three or four days.”

He adds that the “long and the short of it is that I decided I wanted to continue living here near Kansas City. Two or three years ago I thought of moving to the Baltimore area to be near ThompsonGas headquarters, which would be expected if I was to continue as CEO. Although I loved the work and the people, I determined I just didn’t want to uproot and relocate.”

But will he stop working altogether? No. “The thing I realized is that I would miss the industry and the people I know coast to coast too much. I don’t want to sever those relationships, and I want to continue engaging in meetings and events, likely through Propane Concepts.” He’ll operate that business from the Heartland while also devoting time to his investments. 

For several years he has served as chairman of the National Propane Gas Association’s Supply & Logistics Committee. He held that post during the polar vortex winter of 2013-2014, a heating season when events conspired to create a perfect storm of logistical and supply threats.

In response, NPGA led decisive industry efforts to keep customer tanks full and homes and businesses warm. Actions included gaining extended, regional hours of service waivers; pipeline flow reversals; elevated inventory reporting; and publication of a Trend Report to inform the propane industry on supply days of disposition, exports, and comparative historical stock levels.

The industry push culminated in passage of the Propane Supply and Security Act of 2014. The bipartisan legislation provides additional supply clarity by mandating weekly inventory data reporting at the state level and at collective storages at market hubs. The act, among other things, also increases the authority given to cabinet secretaries to ease regulatory burdens during fuel emergencies. 

“Propane supply problems are here to stay in my view, Koloroutis says. “The work NPGA has done for the industry has been outstanding. Thank goodness we had men like Tom Van Buren and David Lugar, and many other great supply leaders, fully engaged during the 2013-2014 propane supply crisis and we were able to get through it.”

Van Buren, formerly a supply chain executive at Ferrellgas, is now chief operations officer and executive vice president of Meritum Energy Holdings LP. Lugar, a charter member of the Propane Education & Research Council and a past NPGA board chairman, was vice president of supply and logistics at AmeriGas. The industry leader passed away in 2016.

Koloroutis describes the Trend Report as a strong tool, one he hopes continues to be used going forward. “As we saw this past winter, trucking — driver availability in all industries — is a serious threat. Special emphasis needs to be placed here. By the way, I see Steve Kossuth of AmeriGas as a significant player here. This guy is a sharp and respected leader. He worked with David Lugar for years, and now on his own he is very strong. He will help his company and the industry in this segment. Of that I am sure.” Kossuth is vice president of supply and logistics at AmeriGas.

Regarding securing and locking in volumes, he observes that many marketers are taking supply management and procurement much more seriously after the trauma of 2013-2014. “Propane supply procurement and transportation is a complex function and if you are asleep at the wheel here it can hurt you very badly. As mentioned, we need to figure out the truck driver deficit and, in my mind, that means freight rates are about to soar.” He asserts that all marketers need to “stay smart on propane supply and changing trends. The best way to do this is to maintain mutually beneficial relationships with your suppliers and carriers.”

Koloroutis recounts that when he joined ThompsonGas in 2012 Randy Thompson was the sole owner. A stake was taken in the company by Hanover, Md.-based Redwood Capital Investments in 2015. “Randy and I had previously met while working together in NPGA business and we hit it off from the very start. Initially he hired my consulting firm, Propane Concepts LLC, to perform a 90-day assessment of the business. In short order he asked me to join the company, and I said I would if he would give me the autonomy and freedom to transform the business and make the changes he and I agreed needed to be made. He did just that.”

The propane industry veteran reviews that he began by focusing on initiatives that would enable the company to continue growing through acquisitions, while placing emphases on hiring the right people and creating an “everyone-sells” environment. At the same time, rigorous pricing and margin management, expense management, active supply management, and safety management programs were launched.

“This plan was successfully implemented, and the credit really goes to hiring the right people,” Koloroutis says. “The leadership team at ThompsonGas is very strong, and as a result drivers, service techs, and CSRs [customer service representatives] are strong, too. It really is all about the people. When you assemble a group of winners, turn them loose, and make them feel appreciated, they are going to put points on the scoreboard year after year and when there is a cold winter they will take you to the Super Bowl.”

Outlining his more than two-decade career at Ferrellgas, capped by serving as president of Ferrell North America and executive vice president of Ferrellgas, he avers he was hired in January 1991, initially as a district manager in the Pacific Northwest. “During my time at Ferrellgas I worked with thousands of amazing people. In fact, if I start at the top I would say that Jim Ferrell is one of the most brilliant men I have ever been around. He taught me so much about leadership and many other things, and he enabled me to move up in the organization and make meaningful contributions, for which I will always be grateful.”

He adds that memorable Ferrellgas supervisors during this tenure were Ken Atchley, Pat Chesterman, and Steve Wambold. “I really enjoyed my time with each of these men. They are all good men and strong leaders. And likewise at ThompsonGas, which is now owned, and has been governed by, Redwood Capital Investments for the last few years, I was able to be around the owner and founder of Redwood, Jim Davis, on occasion. The Jim Davis story is nothing short of phenomenal. He is a charismatic leader who has built a great business for many decades.”

Koloroutis continues that the people he enjoyed spending time with the most at both companies were regional executives, branch managers, drivers, service techs, CSRs, and sales staff. “These are the people with their fingers on the pulse. These are the people that make things happen. They are the people that connect with the customer.” 

The newly minted retiree characterizes the current acquisitions environment for propane distribution companies as being a seller’s market, and one that is attractive to both U.S. and international buyers. “I think companies from outside the United States love the ROI [return on investment] and they are willing to pay for it. So, that means domestic buyers like ThompsonGas, AmeriGas, Ferrellgas, Blossman, Suburban, Paraco, etc., will have to step up and pay the price if they want to make the purchase. It’s Economics 101.”

Accompanying North America’s resurgence as an energy producer and the resulting era of relative abundance, moves to greatly expand natural gas lines into propane country have emerged, subsidized by existing ratepayers and through questionable legislative perks. Koloroutis describes these expansion plans, along with the “electrify everything” movement, as posing potential existential threats to traditional propane operations.

“I think the industry needs to ramp up its opposition here. Ratepayers subsidizing others is wrong in so many ways. Yes, this threat is big and keeps many awake at night. And I think electricity presents a challenge from an economic point of view. The advantage of propane needs to be more regularly and clearly communicated. The advantages of gas over electricity are meaningful to many when it comes to heating their homes, their water, and cooking their meals.”

Meanwhile, back at the lake, Koloroutis reiterates he won’t stop working, but will not return to traveling more than 125 days a year and sleeping in out-of-town hotel rooms. But his summer hiatus wasn’t all a diverting waterborne merriment. July 18, a date “near and dear,” saw his family gather to remember. His daughter, Rachael, just 18, died that day in 2003. “The propane industry was so compassionate and helpful,” he remembers. “The support I received was amazing.” —John Needham