PTT reinvestment: Diversifying beyond oil and petrochemicals for future growth

National energy conglomerate PTT Plc has initiated a reinvestment phase, eyeing new ventures for future growth. This move follows the stagnation of the company’s traditional businesses, which are primarily centred around the oil refinery and petrochemical sectors. As these avenues have limited potential for enhancing future income, the company emphasises the need for reinvestment.

PTT’s President and Chief Executive Officer, Auttapol Rerkpiboon, considers this PTT reinvestment a necessary step towards cultivating new business sectors. He acknowledges that while not all new ventures will necessarily prove fruitful, a portion of these fresh investments is expected to generate profits for the company.

Under the banner of Future Energy and Beyond, PTT’s reinvestment strategy involves exploring sectors such as electric vehicles (EVs), EV batteries, future energy sources like hydrogen, AI and robotics, lifestyle, life science, nutrition, logistics, and pharmaceuticals. The company anticipates 30% of its net income to be derived from future energy, with a billion baht allocated for investment in future energy and beyond businesses from 2023 to 2027.

PTT aims to reduce its group’s greenhouse gas emissions by 15% from the 2020 level by 2030, with the ultimate goal of achieving carbon neutrality by 2040 and net zero emissions by 2050. The company’s newly established ventures are expected to yield results within the next 3 to 5 years.

Notably, some of PTT’s previous investments have already started to produce substantial returns. This is exemplified in the company’s pharmaceutical venture in Taiwan, where, via its subsidiary Innobic, PTT has become a significant shareholder in Lotus Pharmaceutical Co. The business primarily profits from the production and sale of cancer medications in the United States, generating over a billion baht.

PTT Reinvestment Initiatives

Auttapol emphasizes that PTT’s reinvestment strategy is intentional, with every investment aimed at fostering new technologies and generating employment opportunities. He believes the private sector plays a vital role in bringing government policies regarding new S-Curve industries to fruition.

Additionally, PTT is backing the research and development of Manee Daeng, an innovative anti-ageing drug. The project, in collaboration with medical professionals from Chulalongkorn University, has shown promising results in animal trials and is gearing up for human trials in Thailand and abroad.

Despite the focus on reinvestment, PTT remains committed to the country’s energy security. The company made strategic decisions to purchase and store 4 million barrels of oil during the onset of the Russia-Ukraine crisis, even at a cost exceeding US$100 per barrel. This move was aimed at securing the country’s energy supply and bolstering consumer confidence despite the ensuing losses when prices fell.

PTT has also implemented initiatives to support the public during energy price crises, such as price control for natural gas vehicles and liquefied petroleum gas, and providing loans to the Electricity Generating Authority of Thailand to stabilise electricity costs.

However, Auttapol highlighted the delicate balance PTT must maintain as a state enterprise and a listed company. The company is cautious not to subsidise energy prices to an extent that could jeopardise its financial stability or affect its credit rating, reported Bangkok Post.