From gas to timber, vertical integration key to historic growth of Irving empire

James Irving is the president of J.D. Irving Ltd. and oversees forestry products among other business interests in the Irving family corporation.
James Irving is the president of J.D. Irving Ltd. and oversees forestry products among other business interests in the Irving family corporation. Buy Photo
Posted Feb. 07, 2014, at 11:24 a.m.

The Irving family story begins with the son of Scottish immigrants, James Dergavel Irving, who founded the Irving company in Bouctouche, New Brunswick, in 1882 with a sawmill, gristmill, carding mill, a general store and several farms.

James’ son, Kenneth Colin Irving, took what his father built up and diversified into transportation, shipbuilding, construction and retail, including an auto dealership.

Three generations later, the two Irving corporations — J.D. Irving Ltd. and Irving Oil — are separate and distinct, sharing only the family name, background and fiercely guarded privacy about the family business.

From the beginning, K.C. Irving’s genius, said Donald Savoie, a public policy and economic development professor at the University of Moncton, was to embrace vertical integration. It was something Irving began almost as soon as he started selling Ford cars at his dealership in 1931.

“He said, ‘Look, if I am going to sell cars, these cars need gas, so I am going to sell gas, too,’” Savoie said. “The cars’ engines needed oil, so he said he might as well get into the oil business, too.”

Deborah Armstrong, a St. John-based human resources specialist who studied the family as she pursued her undergraduate business degree in the late 1970s, likened having the Irving companies in her province, or in Maine, as “sleeping next to an elephant.”

She said there is often a love-hate relationship between communities and the company, which, she said, has a reputation as tough, no-nonsense negotiators in the province.

“They make tough business decisions not everyone likes,” she said. “They are tough and tough minded.”

At the same time, she pointed out the Irvings are known to donate large amounts of money to different charities in the area, rarely seeking publicity when they do so.

“That’s how it is with any major business in the community,” she said. “Everything they do has an impact, but in the end, they are good corporate citizens.”

As a corporation and family, the Irvings are under enormous public scrutiny, said Armstrong. “Everything they do is highly visible,” she said. “The Irvings run a good, solid organization [and] they are very no-nonsense and you don’t mess around with them.”

Visible, yes, but not transparent. Keeping the family business in the family gives the Irvings an advantage, said Savoie.

“They don’t have to share information or disclose anything,” he said. “So they can manage their [companies] quite handsomely without the need to share information.”

As far as Armstrong is concerned, the Irvings are as much a part of the New Brunswick landscape as the trees and rocks.

“The Irvings have been a fact of our lives for so long they are almost like family,” she said. “Still, we all keep an eye on them [because] the last thing you do is take your eyes off the elephant.”

 

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