Oil refiner Petron Corp. has completed the first phase of its retail expansion program under the management of food and beverage giant San Miguel Corp. (SMC).

Ramon Ang, Petron chairman and chief operating officer, said the expansion of the company’s retail network, which is already the most extensive locally, would allow it to secure its position in the market.

“We intend to pursue our network expansion program to bring Petron’s first-rate fuel products and quality services closer to Filipino motorists. This is also in line with our strategic initiative to strengthen the company’s core business and ensure our market dominance over the long-term,” he said.

At the heart of the expansion program is the establishment of Petron service stations in far-flung areas, which also serve as the framework for volume-building.

The company said the concept is based on pre-fabricated models that can start with two to three product pumps. These stations can be expanded later on when demand increases in growth centers, real estate development sites and provincial areas.

From January 2009 to January 2010, Petron has opened 200 new service stations under this concept across the country, bringing its total service station count to 1,463. Of the new Petron service stations opened last year, 84 are located in Luzon, 48 in Visayas and 68 in Mindanao.

Eric Recto, Petron president, said the additional stations are estimated to cost around P2 million each, or a combined P450 million.

The company owns about 30 percent of the total service station count of the local oil industry. To complement its retail expansion, Petron is also rolling out more services at its various gasoline stations to give customers more service convenience. These include bank ATMs, money transfer, bill payments, and additional food and service locators.

The expansion program is part of Petron’s plan to put up 1,000 retail outlets in three years—an aggressive roll out after SMC took over the company in 2008.

Petron also announced on Tuesday that it has set a dividend rate of 9.5281 percent per annum for its preferred shares that would be sold next week.

The oil firm said the rate was based on Tuesday’s PDST-F rate of 6.2781 percent per annum, plus a spread of 3.25 percent.

BDO Capital and Investment Corp., BPI Capital Corp. and ING Bank N.V. Manila were tapped as joint issue managers and lead managers for the capital-raising activity.

The proceeds from the offer would be used for its capital expenditure requirement and repayment of short-term debt, Petron said.

At end-September, the oil company had consolidated short-term debt of P45.6 billion.

Petron posted a net income of P3.37 billion in the first nine months of 2009 and continued to recover from losses suffered in 2008. This is equivalent to a 21-percent increase from the P2.78-billion net income posted over the same period in 2008.

Petron’s shares closed flat Tuesday at P5.20 per share.
Euan Paulo C. Añonuevo and Maricel E. Burgonio