Petronas back in Thailand, focusing on lube sales

After selling its petrol stations in Thailand to Susco, a local retailer, about two years ago, Petronas has formed a new executive team to re-enter the Thai market with a pure focus on the lubricant market. 

Led by Nattapong Asavathongskul, a former industrial lubricant manager at Shell Thailand, Petronas International Marketing (Thailand) Co’s management team includes Jarus Srisamaikul, a former lubricant manager at BP-Castrol (Thailand), and two other former lube marketing executives from Shell.

Even though the timing of its re-entry is quite challenging – the Thai lubricant market is estimated to have fallen by about 15-20 per cent during the first half of the year – Nattapong said his strong team made him confident that Petronas would be able to achieve its target. It aims to increase annual sales by at least 20 per cent, ending up tripling its sales and getting into the top five in terms of market share by 2020.

Nattapong worked with Shell for 24 years before joining Petronas five months ago. 

Three major oil companies – PTT, Shell, and BP-Castrol – hold about half of the Thai lubricant market, which totals about 600 million litres valued at about Bt50 billion per annum. Thailand’s lube market is second only to Indonesia’s among Southeast Asian nations.

Nattapong said the parent company had allocated a Bt1-billion annual budget to support the Thai operations, including marketing and other support budgets. Petronas’ lack of retail outlets here means a disadvantage in terms of brand building, but oil companies usually sell less than 5 per cent of their lubricants through their petrol networks, he said.

Petronas was able to increase its lube sales in the first half by nearly 20 per cent, reversing the market trend, thanks partly to an expansion of its distributors from more than 10 to about 20, now covering the entire country. Furthermore, it has mobilised a new marketing team to penetrate the industrial lubricant market, which accounts for some 60 per cent of the total lube market here.

The company targets total lubricant sales of 10.8 million litres this year after selling 7 million litres in the first eight months. It has set an aggressive target to grow its market share to at least 7-8 per cent in the next five years.

Nattapong said Petronas was already distributing its lubricants at some  B-Quik outlets and at no fewer than 3,000 garages nationwide. 

Petronas will emphasise building brand awareness and service excellence, such as through offering a 24-hour express delivery service to large customers.

It has a full range of lube products but will initially focus on the passenger-car segment with its Petronas Syntium engine oils.