Private companies provide lots of muscle in the local economy

HOUSTON is home to 20 Fortune 500 companies, more than most U.S. cities. Several of these homegrown corporations are household names, such as Phillips 66, Halliburton and Waste Management.

But publicly traded corporations aren’t the only movers and shakers in town. Houston’s private companies, ranging from retail chains to construction and engineering firms, are also major drivers of the city’s economy.

The 61 companies on this year’s Chronicle 100 list of top private companies by 2017 revenue generated nearly $48 billion in revenues and employed more than 43,600 people in the Houston area. These companies include Academy Sports + Outdoors, Landry’s and David Weekley Homes.

“Private companies are a key part of the local economy,” said Patrick Jankowski, senior vice president of research for the Greater Houston Partnership. “Every Fortune 500 company started as a small private company. Today’s private company could be tomorrow’s Fortune 500 blockbuster.”

While many companies aspire to become publicly traded on the New York Stock Exchange or Nasdaq, some choose to remain in private hands, Jankowski said. David Weekley Homes, the nation’s largest privately held homebuilder, almost went public in the early 1990s, but decided to stay private to focus on longterm investments in the company and customers.

“As a private company, you can focus on growing your business,” Jankowski said. “You don’t have to post quarterly earnings and answer to shareholders, analysts and the business media. You’re not driven by Wall Street, which allows you to have more flexibility.”

Houston’s private companies, like their public counterparts, have been buoyed by the recent rise in oil prices. West Texas intermediate crude oil is trading in the mid-$60s per barrel, more than double the lowest prices of 2016.

“When the price of oil goes up, it benefits everyone who does business here,” Jankowski said. “If you’re a privately owned restaurant, people will be eating out more. If you’re a car dealership, people are willing to trade in and buy a new car.”

For Sun Coast Resources, higher oil prices have been both boon and bane. The Houston-based company, which ranked No. 11 on the Chronicle 100 private companies list with $1.2 billion in revenue, operates nearly 800 trucks that transport diesel, gasoline and lubricants to commercial businesses, hospitals and energy companies in the oil patch.

Higher oil prices have meant more business for Sun Coast, but also higher transportation costs, said Kyle Lehne, the company’s chief business development officer. The nationwide shortage of commercial truck drivers hasn’t helped, he added.

“Demand has definitely gone up, but we’re also seeing increased trucking costs,” Lehne said. “It’s a pinch point and a balancing act for us.”

Jerry Baker

Brian LaFleur, left, and Stevie Garza wash atruck at Sun Coast Resources. The 33-year-old private Houston company has almost 1,500 employees.

Many transportation companies are offering signing bonuses and higher salaries to attract commercial drivers. At Sun Coast, experienced drivers can make six figures annually, Lehne said.

Sun Coast, which laid off hundreds of employees and drivers during the energy downturn, is looking to hire again as oil prices climb. The company has nearly 1,500 employees, half of them drivers. In 2013, the company had about 2,000 employees, including about 1,000 drivers.

The 33-year-old company is hosting many recruiting events to attract drivers. It also added two new facilities this year in West Texas and Freeport to handle new business.

“Business is good,” Lehne said. “It’s good to be busy again.” paul.takahashi@chron.com twitter.com/paultakahashi