A MAGSAYSAY-led subsidiary which provides fuel for the vessels of its parent company expects to increase revenues this year by attracting more customers in a market served only by a few players.

By increasing its market leadership to 45 percent from the current 35 percent, Marine Fuel Philippines Inc. (MFPI) also expects to earn some P1.5 billion in revenue for 2008, Fil R. Santos, the company's general manager, said. If this target is reached, it would be a historic high for the company, which was only established in 2001.

In 2003 MFPI’s revenues only reached P77.84 million with earnings amounting to P476,605, according to documents it submitted to the Securities and Exchange Commission (SEC). During the following year, revenues almost doubled to P113.24 million. Similarly, profits also went up to P625,612. Profits finally reached the million-peso mark in 2005 when it posted earnings of P3.11 million on the back of P363.4 million in revenues.

In 2006 the company, a wholly owned subsidiary of National Marine Corp., said revenues reached P1.13 billion while it posted earnings worth P12.74 million.

“Our margins will be small because the operating cost is high,” Santos said Friday when an international body certified that the company’s quality- management systems complied with world-class standards.

He added that the company needs to ensure that its systems and processes comply with International Standards Office (ISO) standards to make its services more attractive to oceangoing vessels.

Santos admitted that their current market share is volatile since none of its business transactions are on long-term basis and most, if not all, orders depend solely on a vessel’s fuel needs.

MFPI provides refueling services to vessels of the Magsaysay Group and its subsidiaries. It has three barges which can carry some 600 to 850 metric tons of fuel.

Santos added that the company is also thinking of replacing two of its carriers with bigger ones to expand its operations.

“We need to expand our bottom lines,” he said.

According to the executive, the Philippines sells marine fuels at a higher cost since there are no economies of scale compared with transshipment hubs such as Hong Kong, Singapore, Taiwan and South Korea. As a result, most of the vessels that call at local ports only order enough bunker fuel to reach other ports which sell the commodity cheaper.

Marine-fuel company expects higher revenues

A MAGSAYSAY-led subsidiary which provides fuel for the vessels of its parent company expects to increase revenues this year by attracting more customers in a market served only by a few players.

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