PTTOR targets overseas markets in expansion bid

PTTOR targets overseas markets in expansion bid

PTT Oil and Retail Business Plc (PTTOR), the wholly owned arm of national oil and gas conglomerate PTT Plc, is planning to expand its export market for lubricant products after witnessing limited growth in Thailand.

Buranin Rattanasombat, senior executive vice-president for lubricants, said total sales volume this year is expected to be 190 million litres, up by 6.7% from 178 million litres in 2017.

The export outlook is expected to grow by 20%, but the domestic market growth is only 4.5% in 2018.

PTTOR expects exports of lubricant products to make up 30% of the total within five years, up from 15%.

"We predict the domestic market will see aggressive competition because new players are developing products with new technology to give lubricants longer lifespans, which extends the period for lubricant refilling," he said.

PTTOR is testing market conditions in Kenya to capture emerging demand, and will send a shipment of 30,000 litres this year.

Recently, it signed a memorandum of understanding with Thai trading firm, Kenthai Global Steering Co as PTTOR's sale agent for Kenya.

Mr Buranin said Kenya is a developing country that is expected to be a regional aviation hub.

"We believe lubricant demand has growth potential because Kenya is a gateway for business and investment in West Africa, so we decided to penetrate the markets," said Mr Buranin.

The market feasibility study will include market size, demand growth, logistics system and business regulation.

Mr Buranin said once PTTOR enters Kenya successfully, it can penetrate other countries in Africa such as Congo, Djibouti, Ethiopia, Tanzania and Uganda.

Furthermore, another PTT subsidiary, PTT Exploration and Production, has been in Mozambique on an off-shore Rovuma Area 1 gas field, encouraging PTTOR to also explore the lubricant business in this region.

In the first year of market testing, PTTOR estimates there will be a sales volume of 200,000 litres from Africa.

Last year, Africa saw a sales volume of 2 million litres, mainly from North Africa, which saw 10% of total exports.

"Entrance into the economies of emerging countries is crucial to for PTTOR's business growth because lubricant demand is still high," said Mr Buranin.

In China, PTTOR is setting up PTTOR China as a representative office in Shanghai with an initial investment of 150 million baht.

The lubricant demand in China is roughly 8 billion litres each year, compared with Thailand at only 800 million litres.

Mr Buranin said PTTOR aims to sell 4 million litres of lubricant products in China this year.

"We will sell more than 4 million litres next year," he said.

PTTOR is conducting a feasibility study to penetrate India, where demand is skyrocketing due to a massive car population.

Myanmar receives 40% of PTTOR's lubricant exports, while Vietnam, the Philippines and China, each purchase 10%.

Domestically, Mr Buranin said PTTOR plans to focus more on premium grade and tailor-made lubricants such as special products for electric trains.

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