PTT Oil and Retail Business Plc (PTTOR), the wholly-owned arm of Thailand’s oil and gas conglomerate PTT Plc, plans to boost its lubricant exports, especially to high-growth markets such as Kenya, Congo, Djibouti, Ethiopia, Tanzania and Uganda.
PTTOR’s total lubricant sales volume this year is expected to reach 190 million litres, up 6.7% from 178 million litres in 2017, according to Buranin Rattanasombat, PTT’s senior executive vice-president for lubricants.
Growth in lubricant demand in certain export markets can be in double digits, whereas lubricant demand growth in Thailand is projected at only 4.5%. Buranin projects that PTT’s lubricant exports can represent 30% of PTT’s total sales volume within five years.
“We predict the domestic market will see aggressive competition because new players are developing products with new technology to give lubricants longer lifespans, which extends the period for lubricant refilling,” he said.
PTTOR is test marketing in Kenya by sending a shipment of 30,000 litres this year. Recently, it signed a memorandum of understanding with Thai trading firm, Kenthai Global Steering Co., as PTTOR’s sales agent in Kenya.
“We believe lubricant demand has growth potential because Kenya is a gateway for business and investment in West Africa, so we decided to penetrate the markets,” said Buranin. Kenya is expected to be a regional aviation hub in Africa, he said.
Other potential high-growth markets include countries in Africa such as Congo, Djibouti, Ethiopia, Tanzania and Uganda.
Furthermore, another PTT subsidiary, PTT Exploration and Production, has been in Mozambique on an offshore Rovuma Area 1 gas field, encouraging PTTOR to also explore the lubricant business in this region.
PTTOR estimates there will sales volumes of 200,000 litres to Africa during its first year of test marketing. Last year, African lubricant sales volume reached 2 million litres, mainly from North Africa.
“Entrance into the economies of emerging countries is crucial to PTTOR’s business growth because lubricant demand is still high,” said Buranin.
In China, PTTOR is establishing a representative office in Shanghai, PTTOR China, with an initial investment of BHT 150 million (USD 4.5 million). Lubricant demand in China is approximately eight billion litres each year, compared with only 800 million litres in Thailand. PTTOR aims to sell four million litres in China.
PTTOR is also conducting a feasibility study in India. Myanmar currently receives 40% of PTTOR’s lubricant exports, while Vietnam, the Philippines and China, each represent 10%.
Domestically, Buranin said PTTOR plans to focus more on premium grade and tailor-made lubricant products.