ENERGY

The SET-listed Susco Plc says its purchase of the Thai assets of Petronas, Malaysia's national petroleum company, will be completed next month.

The move is expected to double its petroleum business.

A shareholders' meeting of the Thai oil company on Friday approved the plan to acquire Petronas Retail (Thailand), valued at US$46 million, with payment scheduled for Dec 3.

The purchase will be 30% funded from Susco's cash flow and the rest by bank lending.

Chairit Simaroj, Susco's managing director, confirmed the move will double the company's business.

"It's quite simple. We will earn 15 billion baht this year, and so did Petronas. Therefore, it is reasonable to assume our sales will double next year, as will our net profit of 200 million this year," said Mr Chairit.

Petronas Retail operates 96 fuel stations in Thailand.

Susco plans to negotiate with PTT Plc, the country's sole supplier of natural gas for vehicles, to request subcontracting NGV service stations in appropriate areas.

"Susco will focus on NGV in the future, as the trade margin at 8-10% is higher than for oil. Oil trading has only a slight margin but high competition," he said.

At present, Susco has 142 fuel stations including 10 NGV and eight liquefied petroleum gas stations.

All in all, the company will have 238 filling stations next year.

Susco's next project will be to renovate 30 petrol stations each year at a cost of 1.5 to 2 million baht per station, said Mr Chairit.

He said Petronas's Thai assets will create synergy with Susco since they are in different areas.

Petronas is in residential areas in and around Bangkok, while Susco's stations are mostly in suburbs, with trucks and taxis the regular customers.

The company is also negotiating with retailers to have minimarts at its stations along with Petronas's present Suria convenience stores.

Susco will not invest in minimart operations itself but rather rent out space, said Mr Chairit.

He said Petronas Retail has accumulated billions of baht worth of losses, but tax breaks mean they can be cleared within five years.

Susco will not move towards more acquisitions next year but focus instead on the renovations, said Mr Chairit.

However, all renovations will be complete within 3-5 years, and after that more mergers and acquisitions could be considered.

Susco's main shareholder is the Simaroj family with about a 30% stake.

Chalermchai Mahagitsiri has gradually accumulated 11.23% of Susco shares.

However, Mr Chairit insists Mr Chalermchai has invested solely to gain returns and not management control.

Mr Chairit is one of six top executives of listed firms who are candidates for the Best CEO Award 2012 from the Stock Exchange of Thailand. The winner will be announced on Thursday.

Susco posted a third-quarter net profit of 45 million baht, up from 41 million in the same period last year.

The nine-month net profit was 153 million baht, up from 105 million.

Shares of SUSCO closed Friday on the SET at 3.36 baht, up eight satang, in trade worth 17.6 million baht.