PTT sees higher lube demand

Industrial, transport sectors drive market

PTT Plc, the national oil and gas conglomerate, is upbeat that its sales for lubricant products will grow by 5-10% this year because of increasing local demand and the company’s overseas expansion.

The company has set an ambitious target to double lube sales volume to 400 million litres by 2022.

Buranin Rattanasombat, PTT’s executive vice-president, said the company forecasts the domestic lube market to grow by 3-5% to 824-840 million litres this year.

He said growth in 2018 will mark a market recovery for the first time in several years.

“Local demand will be driven by the country’s industrial and transport sectors,” Mr Buranin said. “The market has declined by 1% per year over the last several years because of economic conditions.”

He said new lubricant products have specifications for prolonged life cycles, lasting 10,000 kilometres for petrol engines and 20,000km for diesel engines, up from only 5,000km in the past.

PTT sold 200 million litres of lubricant products last year, a decrease of 5%.

Mr Buranin said PTT’s contraction paralleled the overall local market, which fell by 5% to 800 million litres.

“But we still controlled a 25% market share last year,” he said.

For PTT’s overseas outlook, Mr Buranin said the company will maintain its production facility in Thailand through subsidiaries Thai Oil Plc and IRPC Plc, which are hubs for the Asean region.

PTT has two original equipment manufacturers for lubricant products in Singapore and China to serve exports in other regions.

Mr Buranin said PTT plans to set up the subsidiary in Shanghai in the first half of 2018 to take over lube sales in China.

“We are enthusiastic about the China market because the sales volume performed very well in that country, with 4 million litres last year,” he said. “Last year, PTT entered South Africa and South Asia.”

Mr Buranin said PTT is seeking new assets for lubricant products in several countries to push its export sales to 50% of total sales by 2022.

Lube exports grew by 20% to 25 million litres last year, mainly consisting of 10 million litres sold in Myanmar.

Mr Buranin said the business expansion is company-wide, spanning all products under PTT, not just lube, oil and cooking gas, but also non-oil segments such as Cafe Amazon shops, Fit Auto quick-repair garages and restaurants.

“One of our fastest expansions was in Myanmar,” he said. “In 2009, PTT recorded lube demand of only 200,000 litres. PTT’s local partner in Myanmar is Tunn Star Co. For several countries in Asia, PTT has yet to open fuel retail businesses, but we plan to penetrate those countries with our lubricant products.”