Eastern Petroleum invests P3B in LPG franchise
MANILA, Philippines—The Eastern Petroleum group is spending some P3 billion to roll out a new brand called EC Gas for Eastern Composite, an LPG (liquid petroleum product) product encased in an innovative plastic composite tank with an automatic shutdown mechanism to ensure users’ safety.
Company chairperson Fernando L. Martinez told reporters that the initial investment will fund the opening of 200 outlets for EC Gas by September 2013. That number is seen to reach 1,000 outlets by September 2014.
EC Gas is available in 11-kilogram tanks. The initial order costs P4,500, including a P3,000 deposit for the tank.
Martinez said that LiquiGaz based in the Netherlands would supply the LPG, while the tank would come from Hexagon Ragasco AS of Norway.
Once the local market for EC Gas reaches 500,000 cylinder tanks, the partners will consider manufacturing the product in the Philippines, Martinez said.
For now, Martinez said, the product would have to be imported. But this adds cost due to the 15-percent import tariff and 12-percent value-added tax.
Martinez said that Eastern Petroleum and its franchisees would promote EC Gas to consumers who are safety-minded and are willing to pay the premium for it.
Data from the National Headquarters of the Bureau of Fire Protection showed that, from 2005 until the first quarter of 2013, more than 800 LPG-related fires occurred, making it the third cause of fire after faulty electrical wiring and those attributable to candles and lamps accidentally left.
An average of 100 fires was reported annually in the last eight years.