Thailand: Refilling stomachs, not cars

• Jul 05, 2021

The next job on the checklist for PTT Oil and Retail Business Plc (OR), which operates the Cafe Amazon franchise, may stun its rivals embarking on non-oil ventures.

OR is moving ahead with a “Beyond Fuel” concept, making its food and beverage business as well as electric vehicle (EV) charging outlet development the priority to match the new lifestyles of customers.

Dek pam, or oil refilling staff, will no longer be the first persons greeting motorists who drive into their petrol stations.

“Where are the oil dispensers?” visitors may say, but Beyond Fuel wants to abandon the conventional image of filling stations.

Instead of adding coffee houses, restaurants, shops and convenience stores to fuel service stations, oil dispensers will instead become a “supplementary facility” in the compound of an eating-cum-shopping establishment, according to OR.

The company is convinced this is the way forward as oil retailers agree stations with oil as the sole product will become a thing of the past.

NO OIL DISPENSERS?

OR is preparing to intrigue motorists on Vibhavadi Rangsit Road with a redesigned PTT station.

The new design is scheduled for completion around the middle of this year.

Once it tests the concept, OR plans to concretise it, building an unconventional petrol station on this busy road.

The company insists it is not merely a rebranding of an oil refilling station, similar to moves by other oil retailers.

Chevron Thailand, which operates petrol stations under the Caltex brand, renovated and painted its petrol stations in a bright red tone, with a contactless payment system using the company’s Smart Design Pump.

OR wants food and beverage as well as other non-oil shops to front the stations, moving the fuel service zone deep inside.

“We want products and services in the non-oil zone to create a window shopping mood,” said Jiraphon Kawswat, president and chief executive of OR.

Petrol will not be the primary purchase for visitors to PTT stations, she said.

The company recorded more than 60% of its daily average of 3 million customers use non-oil services, while only 40% have their cars refilled.

“Motorists take just 3-4 minutes to refill oil and pay bills, but they spend a total of 15-20 minutes at our petrol stations on average. This data means we can benefit from other business opportunities,” said Ms Jiraphon.

The volume of customers and large network of PTT petrol stations are essential to its non-oil businesses.

“The next job this year is to expand PTT station numbers by 192 branches, up from a total of 2,346 branches in Thailand, Myanmar, Laos, Cambodia and the Philippines,” she said.

COFFEE MANIA

Along with new filling stations, OR wants to continue to expand its Cafe Amazon empire as well as make its other coffee brand Pacamara more recognisable among coffee lovers who demand high-quality aromatic brew.

OR spent 172 million baht buying a 65% share in Peaberry Thailand Co, which manufactures and distributes coffee beans and equipment as well as operates cafes under the Pacamara brand.

Peaberry has been one of OR’s coffee suppliers. The company also provides coffee machine maintenance for OR.

The share acquisition not only helps OR better manage its coffee operation costs, but also allows OR to access the high-end market, said Ms Jiraphon.

Pacamara is positioned as the speciality coffee house of OR and the company plans to increase its branches over the next couple of years.

“Thais consume 1.5 kilogrammes of coffee per person annually, compared with 3kg consumed by Europeans and Japanese. There is room to grow this business,” she said.

Other oil retailers are also seeking opportunities in this market and have launched various coffee brands to lure in customers.

PTG Energy Plc, Thailand’s second largest fuel trader by sales volume, is stepping up efforts to strengthen its two coffee brands and other non-oil businesses.

PTG president Pitak Ratchakitprakarn said the company is testing its new food and drink menus, featuring cannabis and hemp ingredients.

They will be offered at its Punthai Coffee Shop branch at PTG headquarters in Bangkok, he said.

The company also plans to increase the number of Punthai Coffee, Coffee World and Max Mart convenience stores, as well as Autobacs car service centres to 870 from 756 last year.

Bangchak Corporation Plc (BCP), a mostly state-owned energy firm, is planning to increase its Inthanin coffee houses in foreign markets once the Covid-19 pandemic subsides.

BCP chief marketing officer and senior executive vice-president Somchai Tejavanija said earlier the company is starting with 3-5 new cafes in Laos.

While Cafe Amazon features a leafy design, Inthanin Coffee claims to be environmentally friendly.

BCP operates a total of 690 outlets in Thailand and eight overseas.

Last year Chevron Thailand introduced Chaodoi Coffee, along with Somtum Jadjan (papaya salad with a strong taste) and Moom Gapao (basil corner), at roughly 100 petrol stations.

OR plans to expand Cafe Amazon outlets across Asia, from Oman to Japan, adding 552 branches, up from 3,575 total branches, according to Ms Jiraphon.

FOOD REFILL

As more motorists enjoy having their stomachs refilled rather than their cars, providing them with quality food services will help oil retailers draw more customers.

OR decided to buy a 20% share worth more than 400 million baht in the Ohkajhu organic restaurant business under its merger and acquisition strategy.

Ohkajhu eateries, which feature salads as signature dishes, are very popular among Chiang Mai and Bangkok residents. Visitors often wait for hours to get a table.

There are 14 Ohkajhu restaurants in the two provinces.

OR plans to add Ohkajhu branches at PTT stations to better serve organic vegetable lovers.

Motorists keen on other food brands can place their orders at Texas Chicken and Hua Seng Hong Dim Sum at OR stations.

To further diversify its non-oil business, OR is developing a central bakery and mixed beverage powder plant, as well as a goods distribution centre for Cafe Amazon in Ayutthaya’s Wang Noi district, said Ms Jiraphon.

The new business is scheduled to begin operations in the third quarter this year.

According to OR, new non-oil businesses are expected to make up 15% of its 74 billion baht in capital spending allocated for 2021-2025.

FUTURE FUEL

Many oil retailers are investing in EV charging facilities, in line with government initiatives that aim to promote the technology as the country tries to become more environmentally aware.

OR provides a charging service for battery-run vehicles at its PTT stations.

It plans to increase charging outlets nationwide from 30 to 100 units by the end of this year, rising to 300 in 2022.

BCP installed 56 EV chargers as part of its business trial.

The company plans to increase the number of chargers to 150, along with branching out its battery swapping stations.

The latter service aims to facilitate electric motorcycle drivers who have a low battery. They can search for stations on their mobile phone and easily replace their batteries with fully charged ones in a few minutes.

Oil retailers clearly envision a future when the term pam namnam, meaning petrol stations, is defunct, with widespread EV charging infrastructure in place and motorists determining their stops based on coffee shops and eateries.

Source: https://www.bangkokpost.com/business/2143567/refilling-stomachs-not-cars