PTG Energy Plc, the operator of the PT petrol station chain and the sixth-biggest fuel retailer in the country, made its debut on the Stock Exchange of Thailand in May 2013. Chief executive Pitak Ratchakitprakarn discusses the company’s outlook and strategy.

What is PTG’s business model?

The core businesses of PTG are retailing and wholesaling of fuel via our PT petrol stations that are Company-Owned-Company-Operated (“COCO”) and through PT petrol stations that are Dealer-Owned-Dealer-Operated (“DODO”).  We also conduct fuel wholesaling to other fuel traders (jobbers)and industrial operatorsin Thailand. Today we have 800 stations throughout Thailand with our own truck fleet and tank farm logistic centers to ensure timely deliver to our stations and our customers.

How does PTG manage its logistics and inventory so well?

There are two reasons, we currently have 9 tank farms throughout Thailand that have a capacity of 200 million litres which allow us to be within 200 km’s from each PT Petrol Station in Thailand meaning  a delivery time of 4 hours and allows for us to maintain inventory levels at 2-3 days. We also have our own large fleet of trucks that is more cost-effective versus outsourcing. These two reasons ensure that we can maximize our marketing margins and minimize our logistic costs.

What differentiates PTG from its competitors?

There are several factors but the core reason is that PTG is smaller than its competitors and as a result of this we are faster, more flexible, and focus purely upon the retailing business of oil. For example all of our locations are on a rent model which allows us to set up and operate in a faster, more cost-effective manner. Our locations are not solely located on the main roads of Thailand, we look for locations that connect the provinces and districts of Thailand. Also the fact that we have our own large fleet of trucks and tank farms in all regions of Thailand keeps our logistic costs low and finally our membership card has shown high growth with a total of 1.7 million members today.

Why did PTG decide to IPO?

There were several reasons for PTG to IPO, firstly we were able to raise capital of THB 1.6 billion to further expand the business, secondly, to improve our operations and thirdly is to enhance our brand awareness. Today not many people in Bangkok know of our PT Petrol Stations because we are not prevalent in Bangkok. We want to improve the brand awareness of our company and we are glad to hear that people don’t recognize our brand (us) or do but have never filled up at our stations because we see it as an opportunity to meet our new customers and the growth can be exponential. We have seen the benefits from this as our Same-Store-Sales growth have been very positive in the past 12 months.

How will PTG further improve its brand awareness?

Through a combination of marketing,expansion of stations and utilizing our membership base. On the two main highways of Thailand we will have large-size station expansions, the first is in Khao Pho, an area that every vehicle has to pass through in order to go to Southern Thailand, with an approximate area of 163 rais, the second is in Chinat which is on the way to northern Thailand and has an area of 5 rais. Our Max Card has done very well since we first launched it 2 years ago, we have invested heavily in IT to improve our CRM and since we have launched we achieved 1.7 million members at a rate of 100,000 new members a month, by the end of this year we should be at 2.6 million members. Currently 63% of our business is from our members and we maintain a relationship with our members with special treat, such as sending them the birthday wishes via SMS.

What impact will the AEC have upon your business?

We see demand for oil increasing in Thailand and especially on the border areas of Thailand with its neighboring countries. We already have several stations across the key border areas of Thailand that will benefit from this. As a company, we will still continue to operate in Thailand for the time being because the market opportunity here is still plentiful.

What are the biggest risks facing your business?

The main risks are generally out of our control. For example, if the economy slows down tremendously and road usage of vehicles decreases,the industry as a whole will naturally be affected.If oil prices are incredibly volatile on a short term basis, it will impact the industry as well. However because of our locations and our ability to manage inventory well we have been able to mitigate these risks.

Where do you see PTG in five years from now?

We will continue to expand the number of stations we have in Thailand by 200-300 locations per year plus we will expand the types of petroleum products that we offer as well. We see the power of our network and in the end our aim is to have a PT station in every amphur in Thailand thereby servicing all of the people in Thailand.

Source: Bangkok Post