7-Eleven franchisor sets P600 million for capex

MANILA, Philippines - Publicly-listed Philippine Seven Corp. (PSC), the local franchisor of the 7-Eleven convenience store chain, has allotted P600 million for its capital spending next year, the company’s top executive said yesterday.

PSC president and CEO Victor Paterno told reporters during the opening of a 7-Eleven store at the Caltex station in Malugay, Makati that P400 million of the capex budget for 2010 will be spent for the expansion of its network.

He said the P200 million balance would be used to finance other projects such as the upgrading of existing facilities. At present, there are about 400 7-Eleven stores operating in the Luzon area.

Paterno said they would be putting up 120 stores next year but did not specify how many will be located in Caltex gas stations.

Chevron Philippines Inc., which runs the Caltex stations all over the country, and PSC signed an agreement last August allowing 7-Eleven to assume the operations of the existing StarMart convenience stores in the Caltext stations.

By the end of this year, 21 7-Eleven convenience stores will be put up in Caltex retail stations in Metro Manila.

Paterno said this new arrangement will enable the company to continue with its aggressive expansion program of growing its store network by 20-25 percent every year.

PSC acquired from Southland Corp. (now 7-Eleven Inc.) of Dallas, Texas the license to operate 7-Eleven stores in the Philippines on Dec. 13, 1982. Local operations commenced with the opening of its first store in February 1984 at the corner of Kamias Road and EDSA in Quezon City.

For his part, Chevron country chairman Jim Meynink said the synergy of the two popular brands is expected to boost fuel and consumer sales as patrons enjoy the benefit of getting their fuels and consumer products all in the same location.

Meynink said the alliance with 7-Eleven is part of a global strategy that would allow the company to concentrate on its core business function which is to market top quality fuels and petroleum products.

Over the past months, Chevron has closed all its 10 company-owned and company-controlled (COCO) refilling stations. The operations of the retail stations have been given to dealers.

The company will also eventually dissolve Calserve, Caltex’s marketing arm.

It will also be concentrating on upgrading its facilities to conform with the Biofuels Act.  The company earlier said it will be investing about $20 million to comply with the requirements of this law.

In 2003, Chevron converted its refinery in San Pascual, Batangas, into a world-class finished-products import terminal. The company also operates two other terminals in Pandacan, Manila and in Lapu-lapu, Cebu.

Chevron operates a network of over 860 service stations in the Philippines under the Caltex brand name and 42 well-equipped Xpress Lube service centers.