OR banking on diversification strategy

The transformation of a business to ensure its survival in response to technological disruption requires a varied approach, according to Disathat Panyarachun.

The chief executive of PTT Oil and Retail Business (OR) is not opposed to making changes within a business in response to disruption, but in his opinion such steps are often carried out when it's already "a bit too late".

Rather, Mr Disathat is a proponent of individuals trying to "disrupt themselves" first, before the emergence of any tech disruption.

This approach has enabled him to prove that he has guided and directed OR on the right track, ensuring the company is able to further grow from the expansion of its non-oil businesses.

From developing electric vehicle (EV) charging facilities to selling healthcare and beauty products, OR's business diversification has provided opportunities to fuel the company's growth amid technological upheaval and the emergence of new societal and lifestyle trends.

PUSH FOR ELECTRIFICATION

Mr Disathat continues to get behind OR's plan to roll out more EV charging stations at PTT petrol stations to serve EV motorists, a move that aligns with the global trend of promoting greater EV usage.

Like other oil retailers, OR saw the impact of increasing numbers of battery-powered vehicles on the country's roads had on oil sales. This led the company to rapidly roll out charging services for EV motorists at its petrol stations. Indeed, it was one of the first to do so.

In the opinion of Mr Disathat, OR needs to rapidly become part of the EV ecosystem before electric-powered vehicles make an even bigger dent on the demand for oil in the future.

Global demand for oil is expected to rise by 5% to a peak of 50 million barrels per day by 2032, with oil use per vehicle likely to fall sharply as EVs are expected to account for more than half of all auto sales by 2040, according to a report released in June 2024 by Goldman Sachs Research, a division of Goldman Sachs Group, a global investment banking, securities and wealth management firm.

The development of EV charging stations is part of OR's "Beyond Fuel" concept, which also includes the company's food and beverage business. This prioritises matching OR's product and service offerings with the demands of consumers amid new societal and lifestyle trends.

OR has long been working towards realising the Beyond Fuel goal by embarking on non-oil ventures rather than remaining in the comfort zone by enjoying its long-established status as a major oil retailer, said Mr Disathat.

"We don't care what new energies there will be in the future. What we have to do is to maintain our leadership position as we do in the oil retail sector," he said.

The company wants EV charging stations to provide another useful alternative service for motorists, which will also provide OR with a new business opportunity, said Mr Disathat.

OR earlier announced it plans to increase its investment in the battery charging business through its EV Station PluZ plan.

The company expects to have 600 EV charging outlets nationwide within this year, up from 400 outlets as of July 2023. The longer-term aim is to raise the number of outlets to 7,000 by 2030.

BEAUTIFICATION STATION

Another non-oil business OR is keen on promoting is the sale of healthcare and beauty products, representing another aspect of the company's shift away from its decades-long role as an oil retailer.

While visiting a petrol station, consumers can now experience a one-stop shop by selecting a tasty dish, sipping some refreshing coffee and purchasing from a range of alluring cosmetics and skincare products.

Thailand is now the second largest healthcare and beauty market in Southeast Asia and OR is keen to tap into this significant business opportunity.

Through its subsidiary OR Health and Wellness, OR took the step of venturing into the health and beauty business by partnering with Sugi Holdings, a Japanese drugstore chain and nanotech platform operator.

OR plans to open up to 10 shops named "found & found" by the end of this year in order to increase sales of these products.

Mr Disathat said while it would be a challenge for OR to enter the healthcare and beauty business sector, which has a local market value estimated at 1 trillion baht, the step is expected to generate revenue for the company.