Caltex seeks investors for pump stations

PETROLEUM

Thailand's fourth-largest oil retailer, Caltex (Thailand) Co, expects to phase out its company-owned service stations next year and seek small investors to take them over in line with cost-cutting, says Apiwat Aganidad, senior manager for government policy and public affairs.

"We want to give chances to small and medium-enterprise investors to be our business partners by operating their own Caltex service stations. This is a good solution for stiff competition," said Mr Apiwat.

He said Thailand was among the world's toughest markets for retail oil sales. The marketing margin per litre is 1.50 baht, the lowest in Asia.

Only 10-20% of total revenue from service stations comes from petrol sales, while more than 50% comes from car care and convenience store sales with the remainder from lubricants.

"With strong competition and low margins, this saves costs while keeping our revenue and customer base," said Mr Apiwat.

The petrol station arm of Chevron Corporation in Thailand will maintain the number of stations at 420 but relocate around 20 pumps per year to better service the flow of traffic.

The company set a marketing budget of approximately 100 million baht a year.

It launched a premium grade diesel in September named Techron Diesel that lifted sales volume by 17% year-on-year to 55 million litres per month.

However, the company will not expand its product line to include gasohol E20, 20% ethanol mixed with petrol, because of low demand.

"In Thailand I think it would take five to 10 years to grow the demand of E20 to be on par with mainstream petrol. There are too many conditions right now," he said.