PTT unit embarks on 5-year expansion programme in Philippines

22-May-2012 Intellasia | | 7:01 AM Print This Post

PTT Philippines Corp., the local subsidiary of Thailand’s largest oil firm, is aggressively increasing its presence in the country, mainly through a planned five-year expansion programme that is estimated to require P1.5 billion in investments.

In an interview with reporters, PTT Philippines president and CEO Wisarn Chawalitanon said the company had just received the go-ahead from its parent firm in Thailand to move ahead with the expansion programme.

The plan will see the construction of 75 to 80 new retail stations from 2012 to 2016. These will bring PTT Philippines’ retail network to about 125 to 130 by the end of 2016, from the current station count of 50.

“We will go big in the Philippines…because we saw the opportunity. The Philippines is a net oil-importing country while in Thailand, we cannot consume all our [petroleum] products,” Chawalitanon explained.

“The Philippine market will be a first priority, [reflective] of the sales in the Philippines [compared to other markets]. We got the signal from our head office in Thailand to expand abroad and the Philippines is the first priority,” he stressed.

The plan, he said, was to allocate a budget of about P250 million to P300 million to put up 15 stations every year from 2012 to 2016. For this year, however, PTT Philippines is expecting to surpass that target with the construction of 20 new stations. Some of the stations will be company-owned while the rest may be built through franchises.

While PTT Philippines will be expanding mainly in Luzon, it will also put up more stations in the Visayas, specifically in the province of Cebu.

To support its expansion programme, PTT Philippines will likewise put up two new terminals, in addition to its existing facility in Subic.

“Our problem now is that we only have one terminal. Our concern is how to expand to south of Luzon. That’s why we are looking into the possibility of putting up additional terminals in the north and in the south so that we can expand more,” Chawalitanon said.

In particular, the company is considering putting up a terminal in San Fernando, Pampanga. One terminal is expected to cost more than P250 million, he added, without disclosing the proposed site for the terminal in South Luzon.

Early last year, the Department of Energy (DoE) had asked PTT Philippines to continue expanding its operations in the Philippines, despite the difficulties encountered by industry players in the past.

This, Energy Secretary Jose Rene D. Almendras earlier said, was meant to encourage competition because “we’re trying to diversify the market. We’re trying to invite as many players as we can to the country. It’s not just PTT. The more players, the better for us.”

Encouraging PTT to expand and invest more forms part of the government’s efforts to diversify and widen the Philippine downstream oil industry landscape, to encourage competition which could help make fuel prices more competitive.

Since the deregulation of the downstream oil industry in 1998, there are now more 240 oil companies operating in the country, categorised as oil majors (namely Petron Corp., Pilipinas Shell Petroleum Corp. and Chevron Philippines), new players and independent players, data from the DoE showed.

According to the DioE, the deregulation not only led to a tremendous increase in the number of industry players in various business activities, but also brought in P34.67 billion in accumulated investments as of 2009. -By Amy R. Remo


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