BANGKOK – The retail arm of the Thai state-owned energy giant plans to double its bottom line by 2025 as it shifts from a gas station based business to one that also offers drivers some relief from the road, makes deliveries to smartphone users, and gives electric vehicle owners places to recharge their batteries.
PTT Oil and Retail Business (PTTOR) has conducted research which shows that drivers and their passengers “spend about four minutes filling their tanks, but an additional 15 to 20 minutes in other parts of our stations,” the CEO said. Jiraporn Khaosawat in Nikkei Asia. “This is why we see an opportunity to make a profit by offering new products and services that match [Thailand’s changing] lifestyles.”
As he adds to his fossil fuel business, Jiraporn said: “We are making some changes to our 74.6 billion baht ($ 2.2 billion) budget, and the revised version must be approved by the board. directors of the company and is expected to be revealed soon. “
In 2020, PTTOR achieved a total turnover of 428 billion baht ($ 12.89 billion) for a net profit of 8.8 billion baht. By 2025, however, he expects net profit to at least double to 16 billion baht to 20 billion baht.
The makeover is already underway. PTTOR has set aside 15% of total capital expenditure for a wellness and lifestyle business.
It will offer products and services that consumers rarely find in roadside convenience stores adjacent to gas stations. Organic vegetables, other healthy foods, and health care products will be included in the mix. The resorts will include famous restaurant chains selling salads, sandwiches, fried chicken and steak.
PTTOR will also use the funds to create a “mobility ecosystem” comprising Fix Auto outlets, which maintain cars, change tires and provide other auto repair services. In the future, electric vehicle repair services will be available.
Small fitness centers and other leisure services are also in PTTOR’s future playbook.
“We’re not just a place to fill fuel tanks or recharge electric vehicles,” Jiraporn said, “but we are trying to be a provider of mobility solutions.”
The conglomerate, which controls the largest share of the gas station market in Thailand at 37%, intends to maintain this position by gradually transforming thousands of its stations into market places that invite drivers and passengers to get out of the car for grab a bite to eat, something to drink, or maybe buy some eye drops or sunscreen.
As PTTOR expands its stations, particularly along highways leading to the country’s major tourist destinations, it will attempt to lure travelers inside with food courts offering a range of tenants, from dim sum restaurants to luxury lounges. Taiwanese bubble tea. Its roadside resorts will also offer local flavors by leasing space to small community businesses and farmers.
Recently, PTTOR partnered with Flash Express, a delivery startup and the country’s first unicorn, as a first step towards establishing PTT station drop-off points.
The company is evolving on other fronts. On October 28, he bought a 25% stake in ISGC, which operates Japanese restaurant chain Kouen, for 192 million baht ($ 5.7 million). The investment was made to further diversify the types of meals available in the PTT station complexes.
Using Thailand’s expanding highway network is becoming increasingly popular among drivers and motorcycle enthusiasts who prefer the freedom of the open road to public transportation. Being behind the wheel or on the handlebars gives drivers more choices in how they spend their free time, where to go and when to go. Along the way, drivers also like being able to decide for themselves whether they want to pit down, grab a bite to eat, or perhaps in the future, relax in a roadside fitness center.
PTTOR is thinking big with its transformation and also sees itself in competition with department store chains by transforming its service stations into easy-to-access shopping centers.
“Petrol stations are normally located in good locations,” Jiraporn said. “Consumers can easily reach thousands of our stores [as they drive by]. They can get what they want without having to travel to a busy neighborhood [like they would] to reach a large store.
“This is what we see as our new opportunity as we expand our non-oil business.”
To attract shoppers who don’t want to venture into a crowded department store neighborhood, PTTOR will carry cell phone gadgets, electronics, fashion and lifestyle items.
He also extended by 10 years his joint venture contract with the conglomerate CP ALL, which operates the 7-Eleven convenience chain in Thailand. In addition, it has partnered with agribusiness companies in an effort to expand supply chains that end either at its gas station complexes or at its coffeehouse chain Cafe Amazon, which has stores throughout. the country.
PTTOR also plans to more than triple the number of its Cafe Amazon cafes overseas to 1,000 by 2025. © Reuters
Jiraporn said PTTOR also intends to cater to health-conscious consumers and is in talks with drug makers and healthcare companies to bring vitamin and dietary supplements, skin care items as well. than small fitness centers in its roadside markets.
As for its Starbucks-style Cafe Amazon chain, PTTOR intends to expand it to 5,200 branches over the next five years, up from 3,492 current branches. Cafés and their millions of customers will also be introduced to new food products, the development of which will account for a significant portion of the group’s total capital expenditure.
In addition, the company intends to more than triple the number of Cafe Amazon stores overseas to 1,000 by 2025.
PTTOR will devote around 22% of its investment budget to overseas expansion, particularly Cambodia, Laos, Myanmar and Vietnam, as well as elsewhere in Southeast Asia. It operates a jet fuel business in Cambodia and an industrial lubricants business in China. It has Cafe Amazon stores and PTT stations in other Southeast Asian countries.
Another 34% of its total investment spending will be on infrastructure for PTT gas stations and electric vehicle charging points, Jiraporn said.
“We are not ignoring the new trend of electric vehicles,” she added. “But we think it will certainly be a long time before Thailand can become a 100% EV community.”
According to the Department of Land Transport, Thailand had 1,056 legally registered electric vehicles in 2020, representing about 0.13% of the country’s 792,146 registered cars and a net compared to the government’s target of having up to 725 000 electric vehicles on the road by 2030.
In other words, PTT’s customers continue to be the engines of the country’s more than 700,000 internal combustion cars and its 21.4 million motorcycles.
The company plans to aggressively increase the number of its gas stations, not because it expects a surge in demand for oil, but because it wants the infrastructure in place to be able to be reconfigured to serve as the basis for electric vehicle delivery and charging services.
PTTOR plans to have 2,500 stations by 2025, compared to 2,040 currently. It also has 30 electric vehicle charging stations, but that number will increase to 100 by the end of this year and 300 by the end of 2022, according to the company.
After PTT, No. 2 Esso (Thailand) holds 10.7% of the service station market in Thailand and Bangchak Corporation 10.1%, according to data from the Ministry of Energy.
