Phoenix Petroleum allots P500 million for capex

MANILA, Philippines - Publicly-listed Phoenix Petroleum Philippines Inc. has earmarked P500 million for capital expenditures next year, a top company official said.

Phoenix president Dennis Uy told reporters the other day that the bulk of the budget or P200 million will go to expansion of its network.

The company is planning to put up at least 40 to 50 retail stations all over the country next year.

The rest of the budget will be allocated for oil warehouses and other logistics operations.

Uy said they may spend between P3 million to P8 million each station.

He said their network expansion will be focused in the Luzon and Mindanao areas.

The Phoenix official said they would be sourcing most of the budget from debts and internally-generated funds.

“We may tap the debt markets. It’s a combination of debt and internal funds,” he said.

At present, Phoenix operates 97 stations in Mindanao alone.

Uy said they hope to tap other markets in Luzon, aggressively looking for sites in Luzon particularly in Metro Manila. It now has stations in Marikina and Fort Bonifacio.

“We hope motorists will continue to patronize our brand,” Uy said, noting that Phoenix started with only 20 stations when it listed its shares at the Philippine Stock Exchange in 2007.

This year, he said they expect to complete 22 stations which will bring its total stations to 120.

“We want most of our stations to be dealer-owned and dealer-operated compared to company-owned and dealer-operated because the rollout is faster,” he said.

Recently, the company received tax perks from the government for its Calaca depot project which is expected to start operations this month.

The P615-million project involves the construction and operation of Phoenix’s storage and distribution facility for biofuel and jet fuel in Calaca, Batangas.

The oil depot has a capacity of 46 million tons. Phoenix will source its products from foreign oil companies and independent suppliers.

The Phoenix Calaca depot will sell its petroleum products on a wholesale basis to its Luzon retail stations, companies and industrial users in Calabarzon and Metro Manila.

Phoenix is engaged in the business of trading refined petroleum products, lubricants, chemicals and an array of car care products and accessories.

It also provides services such as depot operation, depot storage, logistics, into-plane and allied services.

It was listed on the Philippine Stock Exchange in July 2007, the first petroleum company to do so since the passage of the 1998 Downstream Oil Deregulation Act.

The company posted a substantial increase in its net income in the first nine months of 2009 to P589.4 million from P80.3 million in the same period in 2008.