PSP Specialties Plc, Thailand's largest lubricant producer by capacity, is benefiting from the growth of the electric vehicle (EV) industry by selling lubricants and lubricant-related products suitable for battery-powered cars.
Unlike local auto parts manufacturers who supply products mainly for internal combustion engine (ICE)-powered cars, which are currently concerned that their sales will decline as assemblers of EVs do not require many of these kinds of components, PSP Specialties is playing down the impact of technological disruption, saying its products serve customers in both the ICE and EV segments.
The expanding EV market is expected to drive demand for products such as grease, which facilitates the movement of wheels, said Sakesan Krongphanich, deputy chief executive of PSP Specialties.
PSP Specialties now produces 27,550 tonnes of grease, 212 million litres of lubricant, 44 million litres of rubber process oil and 25 million litres of transformer oil a year at its production facilities in Samut Sakhon.
The company will focus on making specialty lubricants and lubricant-related products and services, which are set to represent 50% of its total sales, up from 40%, while the proportion of lube sales will decrease to 50% of the total, down from 60%, said Mr Sakesan.
To gain more revenue, the company is also developing a variety of high-value added products.
It is collaborating with the National Energy Technology Centre to develop bio-transformer oil, produced from palm oil, and is preparing a field trial of this new product in cooperation with the Provincial Electricity Authority, the state power distribution arm.
At present, ICE cars dominate the transport sector, commanding more than 98% of 599,403 new car registrations in the first quarter of this year, with the remainder being EVs, according to the Department of Land Transport.
But the number of EVs is set to soar in the future as the government has set a goal for battery EVs to comprise 30% of total car manufacturing by 2030 through the production of 725,000 zero-emission cars, 675,000 electric motorcycles and 34,000 electric buses and trucks.
PSP Specialties announced a 14% increase in revenue for the first quarter, reaching 3.5 billion baht, up from 3 billion baht in the corresponding period last year.
The net profit also saw a surge of 338%, rising to 184 million baht from 42 million baht in the corresponding period last year.