The most important thing that Pitak Ratchakitprakarn, president and chief executive of PTG Energy Plc, took away from the 1997 financial crisis was the need to keep operating costs at a competitive level in the retail fuel business.
PTG, formerly known as Petroleum Thai Corporation, emerged from the crisis as a debt-ridden basket case, forcing it to spend more than a decade in rehabilitation. The company restructured, renamed itself PTG Energy in 2011 and listed on the Stock Exchange of Thailand in 2013.
"I have never forgotten the toughest days of my life," says Mr Pitak, 52. "It taught me to realise what had made us collapse, what had caused us to grow very slowly and what had made us turn a profit."
PTG's petrol station brand, PT, ranked as the country's fifth-largest fuel retailer as recently as 2013, is now fourth and aims to be No.2 by 2020.
The big push for expansion at PTG stemmed neither from the stock listing nor from any huge borrowing, but rather from Mr Pitak's experiences, he says.
At the time that PTG underwent debt rehabilitation, competition in the retail fuel business was intensifying as several multi-national firms and national energy giant PTT Plc entered the fray.
Oil prices surged to a record high of US$147 a barrel in 2008, further complicating the expansion.
"Not only our creditors, but also our shareholders were not confident that we could operate business smoothly at a time that oil prices were very high and fluctuating," Mr Pitak says. "The most crucial thing we thought of when we decided to expand was how to cut costs, since competition in the market was very intense."
He says the company had a clear and aggressive plan by 2009, with a goal to be the No.1 fuel retailer in Thailand with a station network eclipsing those of PTT, Esso, Shell and Bangchak.
PTG Energy Plc president and chief executive Pitak Ratchakitprakarn.
As a result, PTG continued to expand, raising the number of its petrol stations to 1,407 by the end of 2016. It seeks to expand further to 1,800 stations by the end of 2017 and 4,000 in 2023.
To increase the number of petrol stations more quickly, PTG is encouraging existing petrol stations that have expiring contracts with other fuel brands to switch and become stations of PTG.
This strategy is intended to help PTG cut costs by 5-6 million baht per station, since all facilities of each station have already been built, making for a cheaper process compared with developing brand-new petrol stations.
Mr Pitak says the company has set aside 80-100 million baht for the expansion. PTG will apply the business model of leasing the land to operate the station on its own, because that way it's easier for the company to control the quality.
As a result, PTG's petrol stations will operate under the company's own standards, such as all staff must be Thai and all restrooms must be clean.
Founded in the 1980s, PTG started as a small retail fuel company, selling mostly to fishing boats in the South before expanding to sell petrol to all motorists. The company was hit hard by the Tom Yum Kung crisis of 1997.
After recovering from the crisis, the company continued its expansion by carefully managing fuel stocks and logistics to help cut operating costs while also devising stronger marketing campaigns to promote the freshness of the PTG brand.
left and above Mr Pitak got first-hand experience of work at the pumps, spending a day as an attendant at a PT petrol station.
Another strategy employed by PTG was to set up biodiesel and ethanol production facilities along the same transport routes as oil refinery and biofuel plantation areas, allowing the company to use backhaul transport.
This management of logistics and transport routes has slashed costs and created a higher margin of about 40 satang per litre, Mr Pitak says.
"Moreover, we avoided expanding investment too aggressively, since our strategy is based on our core business and our expertise," he says.
Mr Pitak envisions the fuel retail business becoming saturated by 2020. The company is preparing to diversify into other, non-oil sectors to grow further.
"Food and services will be lucrative new businesses that we will diversify into," Mr Pitak says.
Starting earlier this year, PTG has made inroads into non-oil businesses such as coffee shops, car care services and liquefied petroleum gas (LPG) stations.
In July, PTG acquired a majority stake in GFA Corporation, the operator of Coffee World, Cream & Fudge and the restaurant chain New York 5th Avenue.
This acquisition makes PTG the owner of the existing 130 branches of the restaurants and cafes both in Thailand and overseas.
Mr Pitak says PTG strongly believes it could be the second-largest fuel retailer by next year, up from fourth now and fifth in 2013.
"This move will help enhance PTG's non-oil business to increase its food selling channels via those branches located in places with strong potential," Mr Pitak says.
He says non-oil business has grown substantially in the past few years, generating additional revenue that helped offset declines in oil-related business at a time when oil prices remained at a relatively low level.
In September, PTG created a partnership with Japan's Autobacs Seven Co to expand to 240 auto parts outlets within five years.
Concerning LPG for automobiles, PTG is in talks on mergers and acquisitions to increase the number of LPG stations to 400 by 2020.
Mr Pitak says PTG strongly believes it could be the second-largest fuel retailer by next year, as the sector steams towards its saturation point.
One target he likes to mention is that PTG wants to be a leading fuel retailer -- one that sets its own retail price, rather than being dominated by other giant retailers.
As it stands today, Mr Pitak outlines his principles for doing business thusly: "Do not be too fascinated by your success in the past. We should try to face new challenges to keep ourselves updated, because our competitors never stop improving themselves as well."
