Business set to boom as extra links open up
Updated: 2011-08-03 08:40
(China Daily)
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President and CEO, Phoenix Petroleum, Dennis Uy |
Dynamic entrepreneurs develop energy and trade infrastructure to attract investors
Energy is seen by the Aquino administration as an instrument for poverty reduction and social equity, and with its "Energy Access for More" initiative, the government hopes larger sections of the population will receive reliable and affordable energy services that will fuel productivity and countryside development.
The Department of Energy has outlined the following three major pillars as its blueprint: (a) Ensure energy security; (b) Achieve optimal energy pricing; and, (c) Develop a sustainable energy plan, phased into short, medium and long term timelines.
Increased use of ICT (information and communications technology) and a more transparent process will, the government hopes, encourage more investors to look at the Philippines for energy opportunities.
The energy companies themselves are also providing an efficient and quality service and diversifying their products.
Engaged in the business of trading refined petroleum products, lubricants and other chemical products, operation of oil depots and storage facilities and allied services, Phoenix Petroleum has grown from a family venture to one of the most successful businesses in the retail oil industry.
A global mission
The company became operational in its current form under the name Davao Oil Terminal Service Corporation in January 2004, and was officially renamed Phoenix Petroleum two years later.
Phoenix became the first independent oil company to be listed on the Philippines Stock Exchange and its IPO was so successful that it was 15 times oversubscribed.
The IPO price offered at PhP9.8 ($0.23) soared to PhP14.5, putting the value of the company at PhP2 billion at its peak. In November 2009, the government's pension fund purchased up to 10 percent of the company's capital outstanding stock. It initially acquired 2.83 percent for PhP42 million. As of the end of March 2010, it had 9.7 percent of shares.
As Dennis Uy, president and CEO said: "We have a good brand that is acceptable to the consumer. The Phoenix is a firebird with global acceptability and awareness. Secondly, we have logistic support, which includes the people, the depots and the tax.
"We also have the vision to grow. The initial capital was very low, so we had to plan properly and we were lucky to be able to issue an IPO. This was a very successful transaction that enabled us to develop stations in some terminals and depots. We had plenty of courage, focus and determination to achieve this vision. In less than five years, we grew to have 160 stations and our revenue jumped from PhP1 billion to around PhP13 billion last year."
This achievement is all the more impressive due to the fact that the company had to invest in its own shipping company. "When we started, no shipping company would carry our products, we were not considered a priority, and this compelled us to plan our own supply chain integration, to make our operations more predictable and reliable.
"Slowly but surely, we organized ourselves with our initial vessel and purchased more with the earnings."
As it sets its sights on becoming the leading independent oil company in the country by 2012, quality and efficiency will continue to be the company's watch words.
Dynamic trade hub
One of the most accessible free ports in Asia, Subic Bay boasts of a strategic location that has placed the Philippines at the center of Asia's commercial activity.
And, being less than two hours' flight-time from Hong Kong, and two days' sailing time from Shanghai, the port city offers excellent opportunities for Chinese companies to work in partnership with their Filipino neighbors in a range of sectors, including renewable energies and resorts.
As Armand Arreza, administrator for the Subic Bay Metropolitan Authority says: "The business infrastructure is here. Subic was designed to be a one-stop shop, so once we make a decision, we can fast-track projects very quickly. We have an airport directly accessible to China, and there is no visa required to come here for 14 days.
"Only a fifth of the area has been developed so far, so we are doing all we can to attract the right investment and expertise to help us build the social infrastructure needed. There are a lot of areas, like agricultural and urban development, energy and tourism that we are looking at in order to grow with Chinese partners."
According to Arreza, cumulative investments in Subic rose to $7.16 billion in 2010, an increase of 20 percent over the $5.9 billion total in 2009. Around 92 percent of this was comprised of foreign investments.
(China Daily 08/03/2011 page19)