ONLY a few years ago, there were three major players in the Liquefied Petroleum Gas (LPG) industry. They were Shell’s Shellane (now renamed Solane), Petron’s Gasul, and Caltex’s Starflame. The latter soon faded from the competition as Caltex/Chevron dropped from the shelves its LPG brand.
But Shell’s and Petron’s virtual twosome dominance in the multimillion peso industry was not to last long as the void left by Caltex was soon filled by Malaysia-based Petronas which in 1995 put up the Petronas Energy Philippines, Inc. (PEPI) which engages in the marketing and distribution of LPG, known as Gas Petronas. It was only in Dec. 2012 that Gas Petronas started to set up shop in Bicol, particularly in Camarines Sur, and without much ado started its operation the following first months of the new year.
The storage and refilling facility would have been situated in Bgy. Calauag within Naga City, but homeowners there opposed the plan. Despite the fact that an LPG storage, which is a contained and restricted facility, is safer than gasoline stations, the latter being wide open to everybody, including mobile vehicles that motor towards a tank to refill, the local operators of Gas Petronas heeded the residents’ call, albeit their unfounded fears.
At the helm of this newcomer in the game is Bob Factora, a 55-year old CPA who for most of his professional years was a COA auditor and had his last five years in government service deployed as Senior External Auditor of the United Nations HQ in New York, USA.
Although he may have been born in Cotabato Cityand studiedin Manila, Bob is a Bicolano by heart and blood who is a member of the old Factora family that has madeJacob Extension, Bgy. Liboton in Naga City their home. Like his elders, Bob is a hardworking and humble man. He reports early in the morning ahead of his personnel and doesn’t mind driving a truck to withdraw from the plant if all drivers are still on their delivery works.
Bicol Mail for its rare interview edition was fortunate to have sat down one lazy afternoonwith Bob in his office at Gas Petronas refilling station in Pamplona, Camarines Sur. He volunteered to discuss interesting facts about the company and its role as partner in the growth and development of Bicol, particularly in Naga City and the two Camarines provinces which comprise his area of operation.
Bicol Mail (BM): You wouldn’t mind talking about your family, where you came from?
Factora: I am a Bicolano, a proud Nagueno who is a 3rd generation member of the Factora family. As told to me by my parents, our grandfather, Col. Marcelo Lopez Factora, a military man from the North, was assigned in Naga in 1928 where he married Eliza RavagoRanara, a teacher from Oas, Albay.
They then acquired a property in Liboton, Naga City and reared 12 children who all became professionals, 10 of whom eventually migrated to the USA. One of the sons, Jesus, a civil engineer and a big-time contractor at his time who is fondly called Chi by his friends, erected with his own money the imposing bell fry of the Penafrancia Basilica when then Imelda Marcos took the cudgel, so to speak, to construct a bigger home for the Blessed Virgin of Penafrancia inBgy. Balatas.
Meanwhile, the family donated 7 hectares of their property for Naga’s urban poor, now known as CLUPA, beside sitioKarangahan in Bgy. Calauag which is an expression of their love for Naga and their fellow Naguenos. Some 3,000 or more families are now its settlers, under the city government’s Urban Poor Housing Development Program during the time of then City Mayor Jesse M. Robredo. Its main road was named Marcelo Factora Street, in honor of the man who gave them a place to build their own families with the assurance that the land on which their homes stand would be theirs and their children’s alone.
BM: Why Gas Petronas?
Factora: A fellow mason who is the point man of PEPI in Luzon operations offered me a Dealership with PEPI to sell Gas Petronas LPG in Camarines Sur/Norte with the main office in Naga City. With the help of our uncle Chi,he offered his property in Jacob Ext.in Liboton to be our showroom for the Dealership and sold his 2 hectares lot in Calauag to Metro Manila Product Dealership (MMPDC) for the supposed refilling plant but which was not realized. I decided to invest in Dealership for Petronas in Naga for the marketing and distribution of LPG cylinders for household and commercial use, and in bulk for industrial and large-scale use that include poultry growers for their ventilated poultry farmsin Camarines Sur and Camarines Norte. The LPG refilling plant in Pamplona is accredited as a third party operator (TPO) of PEPI to refill GAS PETRONAS cylinders only. With the burgeoning economic activities and rising population in the two provinces, we believe there is a room for one more dominant player in the LPG industry here.
BM: Let’s talk more about Petronas.
Factora:Petronas (Petroliam NasionalBerhad) is one of the leading players in the global oil and gas industry with over 100 subsidiaries around the world. It was incorporated on August 17, 1974 as the national oil company of Malaysia. Its Philippine subsidiary covers the entire country with its storage and refilling facilities for LPG and lubricants. Petronas joined Formula1 race with Mercedes Benz as partner and now is one of the biggest corporations in the world and listed 49th in the Forbes Magazine.
Currently, there are 13 Petronas LPG storage and refilling facilities in the Philippines with 7 of them situated in Luzon, 3 in the Visayas and another 3 in Mindanao. The Bicol refilling facility is located in San Vicente, Pamplona, Camarines Sur, with our showroom situated in Bgy. Liboton, Naga City. Compared to our competitors, the Petronas refilling station in Pamplona is the biggest among them. Rivals may have run out of local supply for whatever reason, like cutoff of road link from Manila which happened in the past, but ours will have more to spare because of the bigger storage capacity of 75 tons that we have at any time.
BM: How much investment exposure has Petronas brought so far in our region?
Factora: With barely two years in operation, our company has poured about P80M investments for our LPG refilling plant that include technical facilities and storage, including state-of-the-art refilling machines and a lorry bullet with man tractor head in our Pamplona plant alone. P40M more were added as marketing investment that include P26M for cylindersand regulators while the remaining P14M had been appropriated for land acquisition, and establishment of showrooms in selected municipalities in Camarines Sur and Camarines Norte with their own delivery equipment. These figures exclude similar investments brought to Legazpi and Sorsogon which are handled by a separate marketing and dealership operator.
Under my watch, some 50 professionals are directly employed by Gasmate Trading and MMPDC, with 300 more or less indirect labor for the 200 individually-owned retail outlets.
Owners of retail outlets (RTOs) earn substantial additional income thru sales of LPG, and more for the LPG needs of agro-industry poultry of about 40 SMC and Bounty contract growers thru LPG piping supply. Local contract growers that use LPG gas for their ventilated poultry farmscomposed the bulk of our industrial users of 50Kg LPG cylinders.
BM: With two years on the road, how far already have you met your targets?
Factora: Business is good and booming in Naga with the neighboring municipalities keeping up with the pace. We say we are third in the race against front-runners Gasul and Solane in that order. But that is not something to be sad about as we are a new comer and yet we have hit our dealership target in two years of our 5-year target!
From 4,000 11-kg cylinders at the end of Dec. 2013 which rose to 9,000 in 2014, we are now looking at 15,000 to 17,000 cylinders distributed throughout Camarines Sur by the end of this year. You see, 25% of household owners of about 100,000 more or less throughout Camarines Sur are LPG users and our target is 25% of that by 2017, or five years since we started our operation in Bicol. And we are not talking yet about sales of our 50kg cylinders for industrial users. By the way, around 30% of our LPG customers are households in Naga.
BM: What makes Gas Petronas an advantage against its competing brands?
Factora: Foremost is our best professional service where we delivered door to door for free and we provide free check up and maintenance for the cooking equipment of our end users. Second, we have a very competitive price, which is the lowest among the branded and non-branded LPG, whereby our price difference is substantial for the simple family. We give free regulators made in Germany costing P350. Our low pressure regulators are designed for slow consumption that gives highest BTU (British measurement of heat) which translates into significant savings for home-cooking use. Our conversion program allows one to exchange his/her old and any brand of cylinders to our brand new super kinisGAS PETRONAS cylinders without additional cost to the end-user. Now, our professional technical teams are providing free piping installation including labor and materials for the commercial (restaurant, bars, laundry shops, etc.) and industrial (construction company and poultry growers) users for continuousfive year supply agreement.
BM: By the way, who are the people helping you in the daily operation of your enterprise?
Factora: As a newbie in the business, I thought I was right when I brought along my grown-up children to help me. I always tell them, “Kung hindotayoangmagmamalasakit, sino pa ba?” Right now, my son Karlo Mark, the second to the eldest, handles logistics and Dealers Owned Retail and Delivery Outlets (DORDO) operations while his brotherMikailNikki for field operations, AndreaKamil, the youngestacted as my Executive Assistant, while RiaKorina the eldest who is in the US, helps in the finances. Mrs. Ma. Virgie Go Macandog a former executive of Fortune Tobacco acted as the assistant manager of Gasmate Trading.
BM: Can you educate us on the characteristics/behavior of LPG?
Factora: LPG is liquid inside the container (cylinder) but immediately transforms to the gaseous state when released. Like any other liquid, LPG expands and contract with changes in temperature. It is colorless, tasteless and ordorless, non-toxic or poisionous. LPG in air will ignite if it is within its flammability limits.
If the released gas is not properly dissipated, it will readily ignite upon contact with sparks, open flames, or any sources of ignition. In the open air, flaming LPG vapor travels at about 15 feet/second depending on the atmospheric conditions and the concentration of gas.