Dennis Uy's Phoenix bullish on CME venture

MANILA, Philippines — Phoenix Petroleum Philippines Inc. of Davao-based businessman Dennis Uy is counting strongly on its planned venture into the manufacture and distribution of coco-methyl ester (CME) to help revitalize the company. 

Stockholders of Phoenix have approved the amendment of the company’s articles of incorporation, particularly article two on primary purpose to include the manufacture, processing, sale, marketing, and distribution of CME.

CME is a biofuel made from coconut oil that is converted to a diesel-substitute while exhibiting combustion-improving properties to lower harmful emissions and improve mileage.

“The proposed amendment under article two is intended to allow the company to process, manufacture, sell, and distribute coco-methyl ester or CME to other parties. CME is a natural raw material for petroleum fuels sold within the country,” Phoenix corporate secretary Socorro Cabreros said. 

Cabreros said the amendment would enable Phoenix to tap another potential business, which is the manufacture and sale of CMP. 

“This will add another possible income stream for the company,” Cabreros said. 

“This will also allow the company to avail of certain tax holidays, incentives and/or exemptions upon approval of the appropriate government entities,” she said.

Oil giant Petron had started earlier this year the development of its CME plant after also amending the company’s primary purpose under its articles of incorporation to include biofuels.

The plant will allow the company to produce its own CME once completed, eliminating dependence on third-party suppliers and provide higher margins for diesel.

Phoenix Petroleum, which offers a wide range of petroleum products that service the needs of various customers, is in the process of streamlining its operations, restructuring its debts, and identifying potential sources of liquidity.

Phoenix president Henry Albert Fadullon said the company’s fuels business has been experiencing challenges due to working capital limitations. 

“The sustained impact of geopolitical tensions on the global market have derailed our intentions to restore the business. Fortunately, our capital light supply model has been essential in keeping operations sustainable,” Fadullon said. 

“Generally, the downstream oil sector continues to be a fundamental component of the economy. And we believe that once we obtain the working capital support to revitalize this part of our portfolio, we will be in a better position to address the demands of our customers,” he said. 

Phoenix saw losses widen to P2.07 billion in the first half from P62.11 million in the same period last year,  as lower volume sold during the period slashed revenues by more than half. 

As of end-June, it has a total of 598 operating retail service stations nationwide.

As the company navigate through the socio-economic challenges this year, Fadullon said Phoenix has taken deliberate steps to repurpose the business to combat hurdles, as well as achieve long term sustainability.

He said the company has been finding ways to adapt according to the evolving business landscape and shifting customer demands. 

“Charting our course forward, we have reorganized Phoenix into four major pillars; fuels, LPG, non-fuels retailing, and terminal services to maintain a better perspective of our business and identify vital points that need our attention,” Fadullon said. 

“Our ongoing initiatives involve several moving parts, including our unwavering focus on efficiency. We now operate in a leaner structure, a more streamlined business to manage our funds more effectively, reducing operating expenses,” he said. 

Further, the Phoenix executive said the company is also actively on the lookout for assets whose value can be optimized or monetized. 

“With this highlight on active portfolio management, we are able to generate additional resources to power up operations while keeping our focus on our core operations,” he said.