Phoenix Petroleum to double retail network

MANILA, Philippines - Davao-based Phoenix Petroleum plans to double its service stations to at least 500 in the next five years through a nationwide expansion program.

The new retail stations will allow the company to maintain its position as the top independent oil firm in the country, the firm’s top executive said.

“In the next five years, we are opportunistic. We want to grow to at least 500,” said Phoenix Petroleum president and chief executive Dennis Uy.

The expansion will cover the entire country, particularly in several growth, Uy said.

Phoenix Petroleum inaugurated yesterday its 250th service station in Bacoor, Cavite. Uy said 184 branches of Phoenix Petroleum are located in Visayas and Mindanao.

“In Mindanao we are strong because there is less competition. Luzon is a bigger market but more competition,” said Raymond Zorilla, assistant vice-president for external affairs of Phoenix Petroleum.

Uy said the company is the leading independent oil player in the country, maintaining a dominant position in Davao.

The company will spend around P1.6 billion for expansion this year, including land acquisition.

The expansion plan is hinged on continuous growth in demand as the economy improves.

“Because we are coming from a low base, growth is high. As per the Department of Energy, there is two-percent growth in consumption because the [economic growth] is four percent,” Zorilla said.

Benchmark investment for every service station is P2-3 million for each company-operated branch. Service stations will cost P5-15 million each.

In August, Phoenix Petroleum will start commercial operations in its biggest branch, a one-hectare station with a dining area, non-fuel shops, barbershops and salon that will be located in Davao City.

“We wanted our retail stations not just simply to sell fuel but we want to give the best customer experience,” Zorilla said, adding that the Davao branch will cost P40 million.

To date, the company imports 90 percent of its oil requirements. It has 10 depots nationwide including one in Zamboanga, Aklan and Bacolod.

Early this week, Phoenix Petroleum announced its acquisition of Davao-based Chelsea Shipping Corp. through a P1.4-billion share-swap deal.

This will ensure efficient supply of oil for its gasoline distribution business.

The oil firm also secured board approval for its plan to raise as much as P500 million through the issuance of convertible notes.

From 120 stations in 2009, Phoenix Petroleum’s branch network increased to 161 and 220 stations in 2010 and 2011, respectively. It ended the first quarter with 240 retail stations.

Phoenix Petroleum is into the trading of refined petroleum products and lubricants, operation of oil depots and storage facilities, and allied services.