PTT in tasty expansion plans for non-oil business

Thailand’s national oil retailer PTT Plc is aggressively expanding its non-oil business, including the launch of fast-food chains, in search of a bigger profit margin.

Domestic oil retailing is about to be saturated, said Sarun Rungkasiri, chief operations officer for the downstream petroleum business group, explaining the switch in business focus.

The shops that will make up the nonoil retail business will be attached to PTT’s petrol stations nationwide.

“About 40% of net profit last year was contributed by non-oil retail business, while the rest was from oil business. We want the profits to be 50:50 from each business within five years,” said Mr Sarun.

PTT yesterday announced that it had won an exclusive agreement to be the franchisee of well-known Georgia-based Church’s Chicken, owner of restaurant chain Texas Chicken.

At least three branches are expected to be opened in the second half of this year, mostly in Bangkok’s central business district.

Mr Sarun said the company expected to open 70 Texas Chicken branches within 10 years, both at petrol stations and as standalone restaurants.

“If our restaurants receive a warm welcome from customers, we will ramp up the expansion to have 70 branches within only five years,” said Mr Sarun.

Texas Chicken, which is the name Church’s Chicken uses for its restaurants outside North America, serves fried chicken, burgers, winglets and nuggets.

Thailand is the fifth country in Southeast Asia where Church’s Chicken has expanded its business after making rapid moves into Asia over the last five years.

“Last year, oil products contributed 80% of sales, while 20% was from non-oil products,” Mr Sarun said.

“But, looking at the profits contributed to the company, it is very interesting to go on with non-oil business.”

He said PTT was also in talks with ice cream and burger restaurant chains to get other franchises. Deals are expected to be finalised by the end of this year.

In July 2014, PTT joined with Daddy Dough (Thailand) Co, a doughnut shop chain, to open 11 shops at its petrol stations, while another 25 shops will open this year. PTT plans to expand the doughnut chain to up to 100 branches within 10 years.

Buranin Rattanasombat, the company’s oil business unit’s executive vice-president, said non-oil business was linked directly to the lifestyle of the young generation as well as metropolitan style.

It is an interesting business whose net profit has been growing rapidly even though it contributes smaller revenue to the company, he said.

“PTT is revamping its own coffee shop chains before granting franchises to other overseas retailers next year,” said Mr Buranin.

PTT started its non-oil business seriously in 2013 when it joined with local small investors to open Amazon Coffee shops at its petrol stations.

Now it has 1,000 Amazon Coffee branches at its petrol stations and another 200 elsewhere.

PTT also plans to brush up on other nonoil retail businesses such as its own Jiffy convenience stores and Pearly Tea Shops. However, the business plan has not yet been revealed.