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PTT sees its oil business seriously threatened in next decade by EVs

PTT HAS predicted that clean energy will adversely affect the oil industry over the next decade. The country’s largest energy firm is moving fast to remodel the oil retail business, including helping the small business owners who run gas stations to survive the coming threat from electric vehicles. 



“While the government has estimated that a new wave of clean energy demand worldwide will have significant impact on the fossil fuel business in the next 1520 years, we think it would come sooner, maybe in the next 10 years,” said Suchat Ramarch, PTT Public Co Ltd’s executive vice president for retail marketing of oil.
“So we have to move early in order to cope with the coming change,” said Suchat. 
Some countries have already announced a phasing out of diesel and petrol cars. France and the United Kingdom, for example, are planning to ban them from 2040 in order to reduce greenhousegas emissions and decrease air pollution.
Gas station owners, the business partners of PTT, “are worried about a decline in their future income” as customer demand for oil declines, said Suchat. “We have to help them seek new sources of income,” he said.
PTT now has gas stations – 1,577 of them in Thailand and 186 abroad, mostly in Laos and Cambodia. PTT’s dealers own 80 per cent of the gas stations in Thailand. 
An average PTT gas station’s revenue comes mainly from selling oil products, but nonoil business contributes about 5060 per cent of total profit, Suchat said. 
In the near future, even more income will come from nonoil products and services around the gas station, including convenience stores, food courts, budget hotels and Amazon coffee shops, he said. 
PTT also plans to install electricity charge points for electric vehicles at gas stations but the service would not generate a lot of income as drivers could also charge their cars at home, said Suchat. Moreover, the margin for providing an electrical charge service would be thin.
PTT have sought business partฌners as gas stations reinvent themselves as resting points for motorists. Some station operators already provide budget hotel rooms for motorists. PTT is now selecting a hotel partner to operate budget hotels at PTT stations. 
PTT also recently partnered with Hua Seng Hong, a wellknown Chinese restaurant that retails its dim sum products at gasstation convenience stores.
The Cafe Amazon coffee brand, owned by PTT, recently gained popularity due to its perceived value for money relationship in comparison to other brands. The Amazon coffee brand has also proved popular in Cambodia, which hosts the top three Amazon branches, said Suchat. Each sells more than 1,000 cups a day.
Amazon has grown from a coffee brand selling in PTT gas stations. Now Cafe Amazon coffee has spread to department stores, community malls and other prime locations nationwide. People have even queued to obtain franchise rights from PTT.

Coffee is blue ocean business
“A coffee franchise in Thailand is a blue ocean business, there is much room to grow,” said Tharatip Nutteesri, senior analyst at Cafe Amazon’s business planning and development division.
An investment of about Bt2.5 million is required of a Cafe Amazon franchisee. PTT would help a potential owner to evaluate business viability before investing.
A cafe is likely to survive if it can sell about 250 cups a day, said Tharatip. 
PTT is negotiating with a Chinese businessman who wants rights to the Cafe Amazon coffee brand in Shanghai, said PTT executives. 
Amazon has just increased its coffee and tea production capacity in order to meet demand for its products and plans to expand Cafe Amazon branches from today’s 1,862 to 2,000 by the end of this year. 
The Amazon factory, also known as the Amazon Inspiring Campus, offers training for those who want to run a coffee shop under the Amazon brand. It is located in Wang Noi disฌtrict, Ayutthaya province near PTT’s Oil Business Academy, which provides training services for prospective gasstation owners. 

Published : October 22, 2017

By : Wichit Chaitrong  The Nation