Petronas Dagangan to invest more in Philippines

KUALA LUMPUR: Petronas Dagangan Bhd, which has allocated RM200 million to grow its international subsidiaries in the next two to three years, intends to invest in more assets in the Philippines, as the group looks to make its supply chain more competitive in the market where it has a liquefied petroleum gas (LPG) business.
"This means we may be looking at investing in terminals or making other arrangements with regards to terminalling facilities," Petronas Dagangan chairman Datuk Wan Zulkiflee Wan Ariffin told a press conference after the company's AGM here yesterday.
"There are no plans at the moment to look at other areas than where we are today but the plan is to nurture and grow the businesses in Philippines, Vietnam and Thailand," he added. National oil company Petroliam Nasional Bhd (Petronas) owns a 69.86% stake in Petronas Dagangan, which is its principal marketing arm.
Petronas Dagangan's core businesses are namely retail, commercial, LPG and lubricant.
The group has allocated RM500 million in capital expenditure for the local market, which Wan Zulkiflee said represents the company's normal level of expenditure every year. It will be to increase its retail network in terms of service stations. It is also increasing the automation of its terminals and depot, as well as IT systems.
Wan Zulkiflee said the company will open about 40 to 50 stations this year, compared with 42 stations last year. There are currently over 1,000 Petronas stations in the country.
He pointed out that non-fuel income grew 11% last year, largely from the 725 Kedai Mesra nationwide.
Petronas Dagangan is confident that the retail and commercial businesses will remain its key contributors and engines of growth for the years to come. It will continue to sweat its existing retail business' assets by ensuring network efficiency and dealer capability.
The company is on track to maintain its leadership position (68.2% market share) for its commercial business by capitalising on the potential growth of the aviation, bitumen and bunker business to drive the segment.
Petronas Dagangan's domestic LPG business is focused on sustaining its position as Malaysia's number one cooking gas (57.2% market share) through value driven growth, cost optimisation and brand loyalty programme.
For its domestic lubricants business, it expects to improve on its overall gross margin by growing its market share in the country.