SINGAPORE — Fuel retailer Phoenix Petroleum Philippines Inc has set up a trading office in Singapore, expanding in the region as it pushes to secure refined fuel to sell in its local market, a senior company executive said.
The Singapore office, which had its “soft opening” in the first week of November, has hired 7 people so far including three traders and will be the sole supplier of refined fuels to Phoenix in the Philippines, said Joseph John Ong, the firm’s chief finance officer.
The company in 2018 will require 2 billion liters, or about 12.6 million barrels, of fuels including liquefied petroleum gas (LPG), up from the 1.7 billion liters this year and 1.5 billion liters in 2016, he said.
Phoenix Petroleum Philippines currently purchases its fuels from oil traders in the region who in turn procure supplies from refiners. The company hopes its Singapore office will be able to cut out such middlemen by buying directly from refiners.
“What we envision is because Phoenix Singapore will be a full trading outfit, it will not only supply to Phoenix Philippines… it will also sell to other parties in the Philippines and also in the region,” said Mr. Ong.
“That will allow it (economies of) scale and allow it to expand and deal directly with refineries.”
There are over 100 independent companies in the Philippines’ deregulated fuel market that Phoenix hopes to target with sales.
Meanwhile, the company is aiming to next year add another 30 to 50 retail stations to the over 500 it has in the Philippines, Mr. Ong said.
The Philippines is one of Asia’s fastest expanding economies with a 6.5% to 7.5% growth target for 2017, which is expected to boost spending and should drive consumption of fuels.
Double-digit growth in automotive sales, as well as more infrastructure projects and airport expansions are also expected to boost appetite for refined fuels.
Phoenix will continue to look out for assets to acquire next year, Mr. Ong said. Earlier in 2017, it acquired the liquefied petroleum gas business of Petronas Dagangan in the Philippines.
“We still need to look for ways to expand our reach and the fastest way to increase market share would be to acquire existing players,” Mr. Ong said. — Reuters