The legendary David is back. He is back in the Philippines, battling the giants in the petroleum industry. Slowly but surely, he is creating a niche in an industry dominated by multinational oil companies.
Our modern David goes by the name of Dennis Uy, founder and president of public listed Phoenix Petroleum Philippines.
If you happen to visit Davao City these days, Dennis’ hometown, you will find Phoenix gasoline stations all over the area. From just 20 in 2007, there are now 170 Phoenix retail stations in the country most of them in Mindanao with a network of dealers growing in Visayas and Luzon.
Dennis was inspired to start an independent oil station when he visited Manila in 2002. He noticed a number of gasoline stations sprouting with new brands. He found out that anybody can have their own brand of gasoline station today as a result of the 1998 Oil Deregulation Law approved by former President Fidel Ramos, as long as it gets registered at the Department of Energy.
He looked back at his province and saw that only the three major oil companies were serving his city. He thought that being the 4th player in his city could possibly give his company 25% market share over time. He wanted to establish an independent oil company from Davao. Most of the big players were focusing on Luzon. He got a third part to do a market study to validate his initial assumption and proceeded to build his own gasoline station.
Dennis started out with a joint venture partner but it did not work out. The partner left him with an oil depot, 12 employees and without revenue. But like the legendary bird that rose from the ashes, Phoenix rose from this setback and turned into a success.
Facing the problem head-on, Dennis looked for ways to make money out of the facility. Finally, he got his big break when Cebu Pacific Airlines gave him a 5-year guaranteed contract to lease one of their 3 tanks. Since September 2004, Phoenix has become their exclusive logistics partner, servicing all of their refueling requirements in Mindanao, as well as regional flights from Mactan, Cebu.
In December 2005, “Phoenix Petroleum Philippines, Inc.” and the brand “Phoenix Fuels Life” were officially launched. It is now the fastest growing independent oil company with an expanding network of operations nationwide.
The company operates depots in key locations in Luzon, Visayas, and Mindanao. From these depots, their own fleet of trucks delivers fuel and lubricants to retail and commercial customers. Their clients are primarily in the airline, shipping, fishing, mining, power and transportation sectors.
At first, not many people knew about the Phoenix brand. But Dennis offered lower start-up cost, greater flexibility, and better relationship to their dealers. He says, that it helped that they were from Davao City, so dealers in Mindanao felt more at ease working with them.
Early on, Dennis saw the importance of building a brand. “We made sure our logo down to our stations looked good and inspired trust and confidence.” Many people now think that Phoenix is an imported brand. In 2009, Phoenix opened their 100th station in General Santos city, with Manny Pacquiao as their dealer. He signed the world boxing champ and popular actress Marian Rivera as endorsers.
On the same year, the company bought the 108-hectare Batangas Union Industrial Park, as part of its Luzon expansion program. The park, now the Phoenix Petroterminals and Industrial Park, has a depot with a 50-million-liter capacity.
In 2010, Phoenix revenues hit P14.7 billion, with net income reaching P427 million. Aside from being the market leader among the independents in southern Mindanao, they now have a 2.5% market share in the industry. From only 12 people, close to 350 people now are employed in the company.
Dennis says, it was a challenge starting Phoenix Petroleum. Working capital was limited and banks were hesitant to lend them because they were on leased property. But today, they are supported by 15 financial institutions.
He credits the success of Phoenix to his people who have worked hard and shown dedication and passion to the company and its goals. He is also grateful to the dealers and business partners for their support and trust. He says, prayers and good timing have played a big part in their success.
“I started Phoenix because I find fulfillment in creating a business, helping people and their families through employment, and making the company grow.” Believing that “a good business is good to the community,” he established the Phoenix Philippines Foundation that benefit schools, charities, the sick, disaster victims, less fortunate, and the environment.
His dream is to become the leading independent oil company in the retail industry by 2012 and to be the number 1 petroleum company in the country.
“I want to inspire entrepreneurs to not be afraid to challenge the giants. What is, does not always have to be that way.”
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Prof. Soriano is the Turnaround and Family Advisor of wongadvisory.com and the Chairman of the Marketing Cluster at the Ateneo Graduate School of Business. For comments please email writer at [email protected].
