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LISTED independent oil player Phoenix Petroleum Philippines Inc. will roll out as much as 650,000 liquefied natural gas (LPG) cylinders next year.

“We ordered more or less 600,000 to 650,000 LPG cylinders over a period of time,” said Henry Albert Fadullon, the company’s COO. “We placed an order, which will be delivered on a programmed basis for next year.”

Fadullon, however, did not say how much was set aside for the purchase of LPG cylinders. Still, he said the move is “probably one of the biggest purchases of cylinders placed in the market.”

The order that we placed is probably one of the most significant one-time tenders that was placed in the history, Fadullon added.

The LPG cylinders will be “gradually deployed,” mainly in Luzon where Petronas Energy Philippines Inc. (Pepi) is not present, he said.

Phoenix’s recent acquisition of Pepi signals the firm’s foray into the LPG market.

Pepi is principally engaged in the LPG business in the Philippines, particularly in the Visayas and Mindanao regions.

Raymond Zorilla, the company’s vice president of corporate affairs, business development and security, said the oil firm has yet to enter the LPG market in Luzon.

“Petronas is really in the Visayas and Mindanao, so we are not really in a position yet to determine,” he said when asked who is the company’s closest competitor in the LPG business. “We are just going to penetrate Luzon.”

Fadullon said Phoenix wants its LPG business to be “competitive, safe, reliable, efficient and clean.”

“There will be traditional retail-trading outlets that will be supplemented by retail-service stations, which will carry it as well. The bulk will still be in the retail-trade outlets, which is the traditional way of making LPG available,” he explained. “The trick here is to make sure you are readily available within the next 15 to 30 minutes. From a phone call, you need to be able to supply LPG.”

Fadullon added: “So the idea is you provide many outlets and make LPG readily available to consumers either through a phone call or by them physically dropping by your outlets.”

Based on the latest data released by the Department of Energy, Phoenix Petroleum registered a market share of 6.7 percent, making it the fifth-largest oil firm in the country. It aims to become the country’s third-largest oil company by the end of 2017.

“What I can tell is our market is less than 6 percent nationwide,” Fadullon added. “So, there is a lot of opportunities for growth as 80 percent of the market is in Luzon.”

At end-September, Phoenix completed 523 retail service stations. It also continued to acquire new commercial direct accounts, while expanding its market share within existing accounts, including power, shipping, logistics, transportation, and manufacturing, among others.

Through acquisitions, Phoenix Petroleum continues to create growth and opportunities in highly attractive industries and markets that are complementary to its core fuel business and are underpinned by strong macroeconomic fundamentals.

Last October 30, it announced the potential acquisition of Philippine FamilyMart, which holds the area franchise for FamilyMart convenience stores in the Philippines. The transaction is still subject to the approval of the Philippine Competition Commission.

Family Mart, with 67 stores in Luzon, is an excellent platform on which the oil firm can establish and grow its presence in the high-margin, fast growing consumer retail space, and leverage on potential synergies with its affiliate companies.

Reference:

Lectura, L. (December 13, 2017). Phoenix Petroluem orders 650,000 LPG tanks for 2018. Business Mirror. Retrieved from https://businessmirror.com.ph/phoenix-petroluem-orders-650000-lpg-tanks-for-2018/

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