Phoenix Petroleum to expand LPG business in Luzon

PHOENIX Petroleum Philippines, Inc. is targeting to widen its share of the liquefied petroleum gas (LPG) market in the country, as it plans to expand in Luzon.

“There is a lot of opportunities for growth [as] 80% of the market is in Luzon,” Henry Albert R. Fadullon, Phoenix chief operating officer, told reporters on Tuesday night.

Phoenix’s LPG business is currently only in the Visayas and Mindanao, with its nationwide market share at only 6%, he said.

To meet the strong demand in Luzon, Phoenix has placed an order for 650,000 cylinders for LPG, which will be delivered next year.

“[It’s] probably one of the biggest purchases of cylinders placed in the market,” Mr. Fadullon said. “A significant portion of that is going to be for Luzon.”

He declined to disclose the cost per cylinder and the resulting industry ranking of the company in terms of volume sales, but noted the cooking gas will be available in Phoenix service stations to supplement its availability in traditional retail trading outlets.

As of the third quarter, Phoenix has a total 523 service stations, or 18 more than the end-2016’s 505, company officials said. The outlay for the new cylinders will be tucked into next year’s capital expenditure.

“[It’s] planned for next year. You pay progressively. You pay when it gets delivered,” Mr. Fadullon said.

The expansion of the Davao City- based listed company comes as it integrates the LPG business of Petronas Energy Philippines, Inc.

The acquisition of the LPG business, since renamed Phoenix LPG Philippines, Inc., is a strong growth and value driver for Phoenix in its expansion, company officials said.

Ignacia S. Braga IV, vice-president for finance of Phoenix’s parent Udenna Corp., said Phoenix remains the biggest contributor to the holding firm’s revenues but 2017 ushered in changes in Udenna’s revenue contributions.

“I’m not even familiar yet with the Petronas volume [ because] it’s part of the consolidation,” she said. “So the (third quarter) does not have it yet. It will be a surprise by the end of the year.”

In the third quarter, Phoenix posted a net income of P826.54 million, more than double last year’s P338.62 million, with the newly acquired LPG business boosting profit.

Aside from the acquisition of the LPG business, the company owned by businessman Dennis A. Uy announced in October the acquisition of 100% of Family Mart, the third- largest convenience store brand in the country.

On Wednesday, shares in Phoenix rose by 0.83% to close at P12.20 each. —