Ptt Public Company Limited Competitive Position Essay Example
Ptt Public Company Limited Competitive Position Essay Example

Ptt Public Company Limited Competitive Position Essay Example

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  • Pages: 6 (1420 words)
  • Published: November 27, 2016
  • Type: Case Study
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PTT is currently ranked No. 95 among the world’s largest 500 companies (based on the 2011 performance), up from No. 128th in 2011, with sale revenues of 2,428,165 million Baht, or a jump by 529,483 million Baht or 27. 9 percent from 2010. Furthermore, PTT, having successfully been assessed by the SAM Corporate Sustainability Assessment that covered economic, social and environmental factors, is currently ranked among the top 10 percent companies or one of the fifteen companies out of 125 firms to become Dow Jones Sustainability World Index’s 2012/2013 member (DJSI World) in the oil and gas producer sector before the targeted goal. PTT Group’s average ROIC rate is currently 11 percent.

However, PTT plans to improve the efficiency in each operation area; namely, project investment management, operation system, marketing and sales, business development, corporate strategy and investment, corporate finance, human resource and org


anizational management, stakeholder management, social responsibility and R&D and management of technology.

Upstream Petroleum & Gas Business Group Oil and Gas Exploration & Production PTT is currently investing through PTT Exploration and Production Public Company Limited (PTTEP) who currently explores and produces petroleum in 44 projects located in 12 countries with production capacity of 313,969 barrels of crude oil equivalent per day and 901 million barrels of crude oil equivalent reserves.

PTTEP has defined key action plans in order to increase production as follows:

• To expedite the exploration and production and an assessment process for drilling and exploration work in Thailand, Myanmar, Australia, Algeria, Indonesia and others through projects such as the Zawtika and the Floating Liquefied Natural Gas (FLNG) projects.

• To expand

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the investment in the North American continent by focusing at liquefied petroleum gas projects such as shale gas and shale oil.

• To seek strategic partners to expand investments in various regions around the world. Coal

PTT is currently investing through PTT International Company Limited where it has invested in a coal mining business in Indonesia through PTT Mining Limited (PTTML). Through PTTML, the shareholding ratio in Sakari Resources Limited (SAR) has been increased which contributes to increases of coal production from 5 million tons to 10 million tons and coal reserves from 680 million tons to 1,400 million tons. Exports are now being made to Japan, Hong Kong, South Korea, India and Taiwan. In addition, PTT is currently investing in a coal mining project in Madagascar through PTT Asia Pacific Mining Proprietary Limited (PTTAPM).

The project is currently under an investment feasibility study while the coal mine is expected to boast 330 million tons of reserves. At the other front, a joint venture was set up to study coal reserves potential in Brunei and Cambodia while new investment opportunities are constantly being analyzed in target countries such as Indonesia, Australia, Myanmar, etc. Plantation PTT is currently investing through PTT Green Energy Company Limited (PTTGE) which has a control over 196,258 hectares (PTTGE’s investment ratio only) of which 23,337 hectares have already been developed.

PTTGE now owns 2 crude palm oil (CPO) mills that boast a production capacity of 45 tons per hour and 30 tons per hour, respectively. In addition, PTTGE has collaborated with local communities through an initiation of social responsibility activity/project. It has also introduced the zero waste

management system to effectively manage the community’s environment. Natural Gas PTT is currently supplying, transporting, and distributing natural gas and products derived from gas-separation plants as well as retailing gas for vehicles and investing in other related businesses.

PTT is sourcing natural gas from both domestic and overseas sources, in total contributes to over 969 cubic feet of liquefied natural gas imported per day which are being distributed through transmission pipeline stretching over 3,714 kilometers. Six gas separation units that produce more than 6. 4 million tons of production per year. Power PTT is currently investing through Independent Power (Thailand) Company Limited (ITP) and PT Utility Company Limited (PTTUP) with production capacity of 1,038 MW and plans to expand investments in Thailand and overseas with an intention to invest more in renewable power.

Petrochemicals PTT is actively investing in the petrochemical business through 9 companies including PTT Global Chemical Public Company Limited (PTTGC), HMC Polymers Company Limited (HMC), PTT Phenol Company Limited (PPCL), PTT Asahi Chemical Company Limited (PTTAC), PTT Polymer Logistics Company Limited (PTTPL), PTT Polymer Marketing Company Limited (PTTPM), PTT Tank Terminal Company Limited (PTT TANK), PTT Maintenance and Engineering Company Limited (PTTME), and PTT MCC Biochem Company Limited (PTTMCC).

This is to add values to locally-produced natural gas as well as products derived from PTT Group refineries. This bold action is also a mean to enhance the development of Thailand’s petrochemical industry in order to substitute imported petrochemical products as well as to support other major industries heavily relying on petrochemical products as their raw materials.

PTT has already expanded the investment in an environmentally-friendly petrochemical business which

is a project to study and develop biodegradable Polybutylene Succinate (PBS) plastic pellets derived from farm products. In addition, PTT MCC Biochem Company Limited in collaboration with the Industrial Estate Authority of Thailand (IEAT) has jointly developed the PTT Eco Industrial Park (PTT ECO-IP) within the Asia Industrial Estate for sustainable co-habitation between the industry, the community, the society and the environment.

Moreover, the joint venture has launched the Phase 2 project in which bio-plastic bags would be used to separate organic waste which would then be transformed to produce organic fertilizer at Koh Samed to minimize waste and rehabilitate the environment at the Khao Leam Ya - Mu Ko Samet National Park. PTT Global Chemical Public Company Limited has been certified as a carbon footprint label holder by Thailand Greenhouse Gas Management Organization (TGO) for the high-density Polyethylene (HDPE) currently retailed under the InnoPlus Trademark.

PTT also continues to develop the PTT Group Operational Excellence Project to apply an excellent system management to maximize operation efficiency and resource exploitation. Refining PTT has invested in 4 companies; namely, Thai Oil Public Company Limited (TOP); IRPC Public Company Limited (IRPC); Star Petroleum Refining Company Limited (SPRC) and Bangchak Petroleum Public Company Limited (BCP) to secure fuel oil for the country and reduce imports. The total refinery capacity is 1,040,000 barrels a day or 84 percent of the country’s total refinery capacity.

Based on PTT’s shareholding ratio in all refineries, the company has a total refinery production of 436,000 barrels a day or 35 percent of Thailand’s total refinery capacity. In addition, refineries under PTT Group are seeking to expand investment in related businesses

to enhance their competitiveness through investment in the petrochemical industry, the lube base oil industry, the power business, the solvent business, and the renewable energy business such as ethanol and biodiesel derived from oil-based crops.

Also, more investments are being made in an environmentally-friendly business such in the case of Bangchak Petroleum Public Company Limited which recently launched the Bangchak Green Station Prototype, also marks Thailand’s first green service station, and investment in the Phase 1 solar energy power plant with capacity to generate 44 MW of power. Refining business is also part of PTT Group Operational Excellence Project that strives to apply the excellent system management to maximize operation efficiency and resource exploitation. Oil

PTT is operating a business through the distribution of quality petroleum products such as refined products, liquefied petroleum gas, lubricants, and other products through various commercial markets, foreign markets and retail markets via sophisticated and full-scaled service stations which meet the needs of consumer varieties. PTT plays a role in pushing and supporting the government’s policy on renewable energy where it has been a frontrunner to distribute biofuel in the form of gasohol and biodiesel. In collaboration with PTT Research and Technology Institute, PTT is developing the second generation of biofuel.

This year also marks the launch of environmentally-friendly lubricants, aviation biofuels and Zero Waste prototype project at PTT service stations. PTT’s oil business continues to strongly command No. 1 market share in Thailand. This accounts for 38. 2 percent market share or a total sale of 16,982 million liters of refined products (including those sold by PTT Retail Management Company Limited: PTTRM). Similarly, it holds No.

1 market share in the lubricants market of 38. 9 percent with a total sale of 143 million liters. International Trading

PTT is currently conducting an integrated international trade business under a strategic framework to secure Thailand energy supply, expand the business base to every region worldwide, and produce new products aside from petroleum and petrochemical products. The company currently boasts a total sale volume of 72,338 million liters (or approximately 1,243 million barrels of crude oil equivalent) while simultaneously providing international logistics as well as market analysis and price risk management services to support PTT as Thailand’s leading company in the world economic stage.

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