Coffee & Oil: A Deadly Alliance against the Amazon Rainforest


PTT will focus on regional growth, having reached the limit in domestic expansion, with the aim of becoming the second-largest petrochemicals player behind national brands in some countries within five years.

The company will also increase the sales ratio of non-oil businesses such as Amazon coffee houses, 7-Eleven convenience stores and quick-service restaurants from 20-30 per cent to 50 per cent in the next two to three years. The move will offset lower profit margins from oil sales.

Saran Rangkasiri, executive vice president of PTT, said the company would maintain the number of PTT petrol stations in Thailand at about 1,300.

“We will focus on strategic expansion, especially in neighbouring markets where we have a geographic advantage in terms of logistics and distribution of our finished oil,” said Saran.

He said PTT’s overseas expansion would be one of the company’s major strategies in the next three to five years.

The company has 30 petrol stations in Laos, 46 in the Philippines and six in Cambodia.

“Those neighbouring markets, such as Cambodia, Laos, and Myanmar [Burma], have no oil- refinery facilities in the country and they need to import finished oil from our country,” he said. “Opening our PTT petrol stations in their markets will help release our surplus oil and add value to our products.”

He said PTT would spend between Bt300 million and Bt500 million on expanding its network of petrol stations overseas over the next two years.

“We will not focus on the number of petrol stations to be opened abroad, but on oil volume traded per station, as well as their sales values and profit margins,” said Saran.

He added that potential markets included Cambodia, the Philippines, Laos and southern China, as well as Myanmar and Vietnam, once local regulations preventing foreign investment in petrol businesses were relaxed.

“We want to be one of the leading brands in particular countries with the highest market share in the next five years,” said Saran.

PTT yesterday celebrated the opening of 555 Amazon coffee houses in Thailand, of which most are located in PTT petrol stations. The company launched Amazon nine years ago. It expects to sell about 30 million cups of fresh coffee this year, up 25 per cent over last year.

“We plan to open another 120 Amazon coffee houses this year, including 10 pilot outlets that will be opened outside the petrol stations. Potential locations will be large and small shopping malls and office buildings,” said Saran.

He said the company expected the number of Amazon branches to reach 2,000 in two to three years.

He added that the company would open its first overseas Amazon outlet in Laos this year.

Saran said PTT earned Bt1.08 per litre on diesel sales. Dealers earned about 78 satang per litre.

He said the government’s price control policy had cost PTT about Bt1.4 billion and urged the new elected government not to interfere in oil prices.

“We believe in the market mechanism and free trade. Full market competition will benefit both business entrepreneurs and consumers. Any form of government subsidy on energy products such as oil will discourage consumers from energy saving,” he said.

Source: By Kwanchai Rungfapaisarn, The Nation

~ by FSVSF Admin on 6 June, 2011.

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