Thailand: PTT seeks to diversify from oil

Thailand: PTT seeks to diversify from oil

PTT, THAILAND'S leading energy conglomerate, announced it will invest more
than Bt50 billion in a strategic expansion from this year until 2021.

Auttapol Rerkpiboon, senior executive vice president of the oil business
unit, said that of the Bt50 billion investment, about 70 per cent would
remain in the oil business, including expanding its oil stations and
improving the company's warehouse system, logistics and transportation. The
remaining 30 per cent would be equally divided between overseas investments
and non-oil businesses.

PTT is reshuffling its business direction towards potential non-oil
businesses, which will be expanded not only in Thailand, but also in other
potential markets in Asia and around the world. They include a solar power
plant, energy storage systems, Caf้ Amazon coffee houses, and an electric
vehicle charging network.

The key directions of future business expansion will be strategic shifts
from oil to retail business as a new growth engine, from product to business
platforms, and from domestic to regional and global markets.

PTT president and chief executive officer Tevin Vongvanich said that the
solar rooftop market has strong potential for growth as the Ministry of
Energy encourages people to install such electricity generating equipment at
home. However, people who install solar rooftops will still need to buy
electricity from the Electricity Generating Authority of Thailand during the
night time when they cannot produce their own electricity from solar rooftop
panels. Storing solar energy captured during the day to provide electricity
for use at night could solve that issue.

"We are studying investing in the production of energy storage equipment and
systems, which are now in the development stage," said Tevin.

He said that PTT's flagship for electricity and utility, Global Power
Synergy Plc (GPSC), recently signed an agreement with 24M Technologies for
the exclusive right to produce lithium-ion batteries in Thailand starting in
2019. The batteries would be used as backup storage for the energy grid,
supporting alternative energy such as wind and solar.

GPSC had made its first expansion of energy business in Japan with last
year's development of a 20.8 mega-watt solar power plant in Ichinoseki at
the cost of 10 billion yen (Bt3.011 trillion). The plant is scheduled for
commercial operation in the fourth quarter this year and will supply
electricity to Tohoku Electric Power under a 20-year contract.

Auttapol said that PTT planned to increase the number of its oil stations
from 1,544 at the end of last year to 1,852 oil stations by the end of 2021.
The company would also increase the number of oil stations in overseas
markets including Laos, Cambodia, -the Philippines, and Myanmar from 183
stations at the end of last year to 535 stations by the end of 2021.

He said that the company also wanted to increase the number of PTT oil
stations installing electrical vehicle chargers from six stations currently
to about 20 by the end of this year. He believes the move will be in line
with the increasing number of electric vehicles on the road in the future.

Meanwhile, they will increase the number of Cafe Amazon coffee houses from
1,667 stores at the end of last year to 2,000 stores by the end of this
year. Of these, about 1,700 stores will be owned and operated by small and
medium enterprises under licences granted by the company. Caf? Amazon
currently employs 12,000 skilled staff in Thailand. PTT also opened Amazon
outlets in Laos (21), Cambodia (26), the Philippines (1), and Myanmar (1).
The first Caf? Amazon coffeehouse in Japan opened in Kawauchi in November
last year. Japan is one of the top three coffee consuming nations in Asia.
Japanese people consume between 3.5 and 4 kilograms of coffee per capita
yearly.

"We plan to open 2,700 Cafe Amazon coffee-houses totally in Thailand, and
another 400 coffee-houses in overseas markets by 2021," said Auttapol. Oman
will get its first coffeehouse this year, and the company is in negotiation
with potential partners in many target markets, including Malaysia,
Singapore and Shanghai," said Auttapol.

Auttapol said that PTT had also strengthened its back-end facilities by
developing its own distribution centre for the supply of coffee ingredients
and equipment to Caf? Amazon outlets. The company last year also opened its
own coffee roasting plant on 20 rais land plot (3.2 hectares) in Wang Noi,
Ayutthaya, with current capacity of 2,700 tonnes yearly. The capacity is
projected to triple by next year.

Auttapul said Cafe Amazon served 140 million cups in 2016 with sales posted
at US$229 million (7.78 billion baht), up 30 per cent over the previous
year. He expects Cafe Amazon to serve 180 million cups this year with sales
reaching U$285 million.

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Link to Original
Article: http://www.nationmultimedia.com/news/business/corporate/3031
9781

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com