By Sheldeen Joy Talavera, Reporter
CEBU-BASED fuel retailer Top Line Business Development Corp. (Topline) is acquiring P180 million value of assets as a part of its planned P925-million investment to speed up expansion within the Visayas.
“As a part of our flexible strategy for expansion, we explored opportunistic acquisitions of retail fuel stations to fast-track the expansion of our Light Fuels brand. This acquisition supports our broader long-term growth objectives by enabling faster market entry and operational scalability,” Eugene Erik C. Lim, chairman, president, and chief executive officer of Topline, said in an announcement on Tuesday.
To speed up the rollout of its expansion plans, Topline’s subsidiary Light Fuels Corp. entered into a purchase order agreement with Total Oil & Gas Resources, Inc. (TOGRI) and Ballston Metro Corp. (BMC) for P120 million and P60 mil-lion, respectively.
The assets involved include 38 retail fuel stations positioned across Cebu, Leyte, Siquijor, and Negros Oriental. The acquisition also features a two-million-liter depot facility, 15 fuel tanker trucks, machinery and equipment, and in-tangible assets resembling a customer loyalty program and leasehold rights.
“The acquisition will enable [Topline] to speed up its market entry and rapidly scale its operations across key regions,” the corporate said. “That is aligned with the corporate’s long-term growth objectives of expanding its presence within the retail fuel sector and increasing brand visibility.”
The acquisition is being financed through a mix of bank financing and internally generated funds, the corporate said.
“Our systems are in place for prudent inventory management and efficient fuel deliveries to our recent stations as we grow our footprint,” said Brigitte Carmel C. Lim, senior vice-president and chief operating officer of Topline.
With the extra stations, the corporate expects to distribute at the least 35.6 million liters in fuel sales volume annually. Last 12 months, the corporate sold 72.45 million liters of liquid fuels.
“With continued consumption and economic growth within the Visayas, this strategic acquisition strengthens our retail fuel revenue stream while complementing our robust industrial fuel trade revenues,” Mr. Lim said.
While industrial fuel trading stays Topline’s core business, the retail fuel segment is emerging as a growth pillar because it is poised to consolidate fuel station chains within the Central and Eastern Visayas regions, in accordance with Peter Louise D.C. Garnace, equity research analyst at Unicapital Securities.
“With this horizontal expansion, Topline is well-positioned to widen its geographical footprint and tap underserved markets where competition is less saturated,” he told BusinessWorld.
Mr. Garnace said the expanded retail fuel station network “will reinforce its ability to produce fuel at competitive prices, strengthen customer loyalty, and drive market share growth.”
Franco M. Fernandez, equity research analyst at DragonFi Securities, Inc., said investors are revaluing Topline, with its shares closing at P0.85 apiece, up 49.12%.
“From a market structure standpoint, this expansion enhances their credibility and brand awareness, difficult legacy players like Petron and Shell. Competitors may begin to feel pressure from Topline, potentially prompting defensive reinvestment in retail infrastructure or lower prices. Consumers within the region stand to learn probably the most within the near term,” Mr. Fernandez said.
He added that Topline’s expansion comes at a vital time amid geopolitical tensions that impact oil prices.
“Due to this fact, strengthening regional supply chains and logistics through localized depots and a bigger tanker fleet helps mitigate potential supply disruptions and cushions price volatility.”
Jayniel Carl S. Manuel, sales and trading department assistant manager at Seedbox Securities, Inc., said the entry of Topline into more locations introduces “fresh competition, which could pressure incumbents to enhance pricing, service levels, or efficiency.”
“Over time, this reshapes the fuel retail landscape by making a more competitive and consumer-oriented market environment,” he said. “For end users, the advantages are clear: improved access to fuel stations, higher service attributable to heightened competition, and potentially more stable pricing from increased supply chain efficiency.”
Topline was the primary company to conduct an initial public offering (IPO) on the Philippine Stock Exchange this 12 months. The corporate allocated P400 million out of its P733-million IPO proceeds for the expansion of its service station network.