The net income of independent Philippine oil industry player Eastern Petroleum Corp. is expected to rise to the P300-million level next year because of its recently launched new liquefied petroleum gas (LPG) product.
Set to become the firm’s major income contributor in the next two years, the Eastern Composite (EC) Gas LPG cylinder was recently launched. It is a modern kind of LPG cylinder.
“With the contribution of EC Gas, we expect around P300 million in net income for full-year 2014. This is a very good number compared to the P60 [million]to P100 million we are expecting for 2013,” Fernando Martinez, Eastern Petroleum chief executive officer and chairman, said in an interview with reporters after the launch of EC Gas held on Thursday.
“The contribution [to Eastern Petroleum]starting 2014 of EC Gas is 30 percent of the total sales. We expect P5 billion in gross sales next year so about P1.5 billion will come from the LPG business [including EC Gas]and the remaining from the retail side,” Martinez further said.
Eastern Petroleum tapped Norwegian firm Hexagon Ragasco AS to be the exclusive distributor for its modern LPG cylinders.
Hexagon Ragasco AS of Norway is the world leader in the manufacturing and marketing of composite LPG cylinders.
Initially, the oil firm plans to cater to 100,000 households by the end of this year, with the roll out of first 100 outlets. In 2014, the company hopes to expand its retail outlets to 300 with additional three refilling plants.
Jose Carlos Martinez, division manager for EC Gas, also mentioned during the EC Gas launch that Eastern Petroleum plans to expand the distributorship of its LPG products, particularly in the cities of Cebu, Davao and General Santos.
It was previously reported that Eastern Petroleum earmarked an investment amount of P3 billion for its new LPG product.
“It took us more than two years of comparative studies of various technologies in LPG handling before finally embarking on this European-made composite cylinders,” Martinez said earlier.
He also specified that the gas for the LPG will be imported from Liquigaz, a firm based in The Netherlands, and will be stored in Eastern Petroleum’s depot in Bataan.
Madelaine B. Miraflor