PTT Oil and Retail Business (OR) is putting new non-oil businesses it has recently invested in, including Ohkajhu organic restaurants and Pacamara coffee houses, on a fast track for business expansion, OR president and chief executive Jiraphon Kawswat says.
The new non-oil businesses will consume 15% of its 74-billion-baht capital spending budget between 2021 and 2025.
Their rapid growth will synergise with the operation of PTT stations nationwide, which currently offer a range of services from oil refilling to convenience stores and Cafe Amazon.
Despite their primary purpose to refuel cars, PTT stations see more than 60% of their average daily 3 million customers use non-oil services while only 40% have their cars refilled, said Ms Jiraphon.
The synergy plan, which will also include its overseas businesses, is overseen by OR wholly-owned Modulus Co, which was established last month.
"We are scaling up several new non-oil businesses which are expected to grow rapidly over the next five years," said Ms Jiraphon.
They include Ohkajhu organic restaurants, now with 14 branches countrywide. Its operator Pluk Phak Praw Rak Mae Co sold a 20% share, worth more than 400 million baht, to OR last month.
OR also spent 172 million baht buying a 65% share in Peaberry Thai, which manufactures and distributes coffee beans and equipment as well as operating cafes under the Pacamara brand.
It also purchased a 10% share worth 900 million baht in Flash Express Co, which provides express delivery service, in October last year. This startup firm will synergise with 2,000 PTT stations and 3,200 Cafe Amazon stores nationwide.
Ms Jiraphon said OR is looking for new investment opportunities in other startups in the health care and ride-hailing sectors.
Her company also plans to allocate 450 million baht to add 100 electric vehicle charging outlets nationwide this year, up from the current 33 outlets. The numbers will increase to 300 by the end of next year.
Other non-oil businesses, including those under franchise, are Fit Auto car care service and Jiffy convenience stores, as well as food businesses Texas Chicken, Hua Seng Hong Dim Sum and Daddy Dough.
Earnings before interest, taxes, depreciation and amortisation (Ebitda) from all non-oil businesses are expected to increase to 33% from 25% within five years, while Ebitda in oil retail will decrease to 55% from 70%.
Ebitda from overseas business is expected to increase to 12% from 5%.
OR's profit margin in the oil trade has stood at 4% over the past three years due to stiff competition, compared with a 25-28% margin made by its non-oil businesses.
The company earlier announced an allocation of 74-billion-baht in capital spending from 2021 to 2025. Up to 33% of the budget will go to the oil trade, followed by 29% for existing operation of non-oil businesses, 21% for overseas business and 15% for new non-oil businesses.