Caterpillar dealer rolls on despite oil slump
$50 million in upgrades planned for its facilities
UNFETTERED by the drop in oil prices, authorized Caterpillar dealership Mustang Cat spent last year mapping out a $50 million facilities upgrade and expansion program that has now been put into play.
Brad Tucker, president of the family-owned company, which is one of 45 authorized Caterpillar dealers in the U.S., said the 63-year-old business is used to economic ups and downs in the energy industry, and is prepared to ride out the energy downturn.
“For dealers like us, you are only as good as the economy in your territory at that particular time,” said Tucker, whose father and grandfather founded the Houston-based company in 1952. “We perform like the economy of Houston performs. We didn’t intend to start this facility expansion program when oil prices dropped, but in this business, you have to look out to the next 20 years. The price of oil will go back up, and our facilities needed this now.”
Tucker said about $35 million of the $50 million outlay will be spent at facilities in the Houston area, including the company’s 55-acre headquarters campus on U.S. 290. Mustang Cat is adding an engine rebuild facility to that campus and a rental services operation to its League City operation, as well as building a facility in Beaumont to replace its aging warehouse there.
Mustang Cat, which generates about two-thirds of its revenue from the sale of Caterpillar engines and onethird from the sale and lease of construction machinery such as bulldozers and excavators, logged record revenue of $1.3 billion last year, up from $903 million in 2013. The company was ranked No. 10 on the Chronicle 100 list of top private companies, up from No. 19 last year.
Tucker expects revenue to dip as much as 25 percent this year, despite strong activity on the machinery side because of steady highway expansion projects such as the Grand Parkway and U.S. 290.
Mustang Cat has 18 facilities throughout Southeast Texas.
In addition to selling, leasing and servicing, construction machinery and engines, the company also offers parts, maintenance, repair and rebuild services, which Tucker said will likely be growth areas. It employs about 700 people, with 528 in the Houston area.