OR banking on allies to grow non-oil ventures

OR banking on allies to grow non-oil ventures

The firm is expanding to a wide range of sectors, assisting partners with issues in accounting and client relation management, writes Yuthana Praiwan

Ms Rajsuda emphasises sustainable partnership between OR and non-oil companies to jointly achieve outstanding business outcomes.
Ms Rajsuda emphasises sustainable partnership between OR and non-oil companies to jointly achieve outstanding business outcomes.

One strategic move PTT Oil and Retail Business Plc (OR) is making to grow its non-oil businesses is seeking allies to work on new business opportunities together.

Pomelo, a leading fast fashion brand and online platform in Asean, is among startups partnering with OR.

It comes as no surprise to see OR, also a key coffee seller under the Café Amazon brand, quickly diversify into businesses involving lifestyles and mobility by joining hands with various business partners ranging from companies, startups to small and medium-sized enterprises (SMEs).

The company recently revised its vision to "Empowering All toward Inclusive Growth," where all stakeholders are envisioned as the whole country.

While raising funds to strengthen new businesses is crucial, other types of help for OR's partners are needed to ensure everyone enjoys a fruitful outcome.

Opportunities for all

OR plans to equip its partners with know-how in running businesses by sharing its years-long experience to boost opportunities for the growth of non-oil businesses.

"To forge cooperation, we will first look at the passion of our prospective partners and find how their expertise can be synergised with our business direction," said Rajsuda Rungsiyakull, Senior Executive Vice-President, as ORion Project Director, OR.

"We will then develop their skills. If they are encountering problems in such fields as accounting and client relation management, we will help them overcome the hindrances."

Key non-oil businesses emphasised by OR include food and beverages, mobility and people's lifestyles.

Food and beverages is the first non-oil businesses operated by OR. Many companies partnering with OR are growing steadily while others like Pacamara Coffee Roasters and Kamu Tea are waiting for expansion.

The mobility business will focus on the development of facilities to better serve transport of people and goods.

The lifestyle sector will have a wide scope of businesses, including health and wellness to tourism.

It is hard to predict the outcomes of the partnership between OR and companies, startups or SMEs in the long term, but a good start is needed.

"We don't exactly know what will happen at the end of the road in the next 5-10 years. Now we just focus on scaling up businesses and matching products and services with target clients," said Ms Rajsuda.

Expansion plans will be especially applied to businesses with steady growth potential.

Entrepreneurs can invest in OR businesses, including PTT Station and Café Amazon, under a franchise system.

The number of PTT Station and Café Amazon branches run under this model now account for 80% of the total.

These businesses can be further developed with the help of digital technology in order to make products and services appear on mobile phone applications.

Ms Rajsuda said OR also welcomes online sellers who do not fit the policies of other major e-commerce platforms as the company is ready to be an alternative in this business.

One strong point of OR is the great number of PTT Station and Café Amazon branches countrywide, with more than 7.5 million people being members of Blue Card.

Money injection

Funds, notably venture capital, are a key tool to fuel partnership between OR and its partners.

While SMEs are under OR's plan to scale up their sizes, venture capital -- ORZON Ventures, Finnoventure Private Equity Trust I and SeaX Ventures -- have been established to facilitate cooperation with startups.

The move came after the success of OR in working with startup Flash Express Thailand, which provides logistics services for e-commerce, including express delivery services. It is the first Thai unicorn after successfully raising funds in Series D+ and E in just three years of operation.

Flash Express Thailand set out an ambitious plan to be ranked among the top three logistics business providers in Southeast Asia within the next five years, enabling Thailand to serve as a regional logistics hub.

Ms Rajsuda regarded the setting up of ORZON Ventures, a private fund registered in Delaware in the US, in October last year as a big business move for OR. The establishment follows its partnership forged with companies in 500 TukTuks.

ORZON Ventures is aimed to support entrepreneurs in the mobility and lifestyle sectors to help them build long-term business growth, she said.

Among businesses receiving support from ORZON Ventures are Pomelo, a leading fast fashion brand and online platform in Asean, and freshket, an online food supply chain platform for more than 7,000 items of fresh and dried food from quality suppliers.

Other funds also have their own purposes.

The 3-billion-baht Finnoventure Private Equity Trust I focuses on investments in fintech, e-commerce and auto industries as well as potential startups born out of rapid changes in consumer behaviour in the post-pandemic period.

SeaX Ventures aims to develop deep technologies such as blockchain-powered internet, biotechnology and life science, artificial intelligence and robotics.

"Work of some startups are very far from oil and retail businesses, but they have potential to grow together with our businesses. That's why we inject capital into them," said Ms Rajsuda.

Around 10% of startups can manage to enjoy a steady and sustainable growth, she said, citing research on startups in the world.

The statistics is viewed as a challenge for OR. Partnering with startups is part of OR's capital spending worth 240 billion baht to be allocated over the next 10 years.

The company aims to rack up 40 billion baht in earnings before interest, taxes, depreciation and amortisation (EBITDA) in the next decade, up from 20 billion last year.

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