Thailands PTT Lubricants Revamps

State-owned PTTOil and Retail Business Co. is preparing for listing on The Stock Exchange of Thailand next year and expects to grow its lubricant business.

They are in the process of listing, which is expected in the middle of next year. But it also depends on market conditions [for listing]. Asset transfer has been completed since the third quarter of this year, Kannika Siamwalla, head of regional oil and gas for RHB Securities (Thailand) PCL, told Lube Report.

PTTORs listing was scheduled for this year, but in May 2017 PTT said it was delayed due to a longer-than-expected asset transfer procedure and compliance with regulations.

In August, its parent company, PTT Public Co., said it started transferring assets to subsidiary PTT Oil and Retail Business, which includes the lubricant businesses in Thailand and overseas, in preparation for a listing on the Stock Exchange of Thailand.

The listing is part of PTTs restructuring program to grow the business and allow for more flexibility for acquisitions and foreign expansion. This will improve competitive advantage both domestically and abroad through more flexibility, united and more efficient operation, said PTTs restructuring document. PTT and government agencies will hold less than 50 percent of PTTORs total paid-up capital after its listing on the Stock Exchange of Thailand.

Apart from the lubricant business, PTTOR also manages 1,500 gas stations and other businesses like cafes and convenience stores in Thailand, and 181 gas stations in four other Southeast Asian nations. It claims the largest share of Thailands lubricant market and has 24 Fit Auto stations for oil change and car maintenance services. The company exports lubricants to 36 countries.

PTTOR plans to double the number of FIT Auto stations and to set up a new warehouse and distribution center. The company also plans to set up overseas subsidiaries to expand its lubricant business in Vietnam and Southeast Asia, said Buranin Rattanasombat, senior executive vice president for the lubricants business of PTTOR.

This year the company also signed a memorandum of understanding with Thai trading firm Kenthai Global Steering Co. to be the company's sales agent for Kenya to export PTT lubricants there.

The company also announced this year that it is setting up a subsidiary, PTTOR China, to carry out its lubricants business in China with a registered capital of about U.S. $2.26 million.

Next year, Ratanasombut forecasts the lubricant industry in Thailand to improveand grow by 4 to 5 percent, similar to the amount of growth expected in the countrys gross domestic product, due to an increase in infrastructure construction projects. He estimates demand for lubricants grew only by 1 to 2 percent this year.

In the next five to 10 years, industrial lubricants sales will increase to account for 60 percent of PTTORs lubricants business, while automotive lubricants would be reduced to 40 percent due to an increase in electric vehicles and longer recommended drain intervals for lubricants, he said.