Malaysia's national oil and gas company Petronas is rebranding its service stations and convenience stores in Thailand in response to a changing urban lifestyle and increased competition.

Senior Petronas executive Amyn Mohamed Hussain said the company had acquired the former Q8 retail chain, which has 117 outlets in the Thai market, at an initial cost of US$60 million (Bt2.09 billion).

"We're a long-term player [in the Thai market]. We're making an additional investment to rebrand these service stations. However, the Thai market is very competitive," he said.

"[Essentially], we have to deal more with the drivers than the cars, in the sense that we have to constantly improve our customised service. The concept of service stations has constantly expanded. Today, service stations are becoming one-stop outlets for many things, including a well-stocked convenience store, a restaurant, a laundry outlet, a florist's shop, a car-care or ATM outlet or a banking kiosk.

"Selling petrol generates a small margin so we need to provide more services [to increase our profit margin]. We'll have to consolidate our service-station business in Thailand before we consider further expansion."

The rebranding programme for Petronas stations in the Thai market is due for completion around June this year. The upgraded stations and their Suria convenience stores aim to respond to changing urban lifestyles in which customers are seeking greater convenience and faster service.

In the Thai market, the Malaysian firm has partnerships with food and beverage and other service chains such as A&W, Narai Pizzaria, Coffee World and B-Quik (car care).

In Malaysia, Petronas's retail arm is the market leader with a 41-per-cent share, operating about 800 retail stations. Petronas also owns 80 per cent of Engen, a market leader in South Africa, which owns and operates 1,500 service stations.

The Malaysian firm is also pushing its lubricant business here under the brand names Petronas Syntium for premium synthetic lubricants and Suvium for high-performance diesel-engine lubricant.

In the late 1980s, Petronas turned to motor sports as a platform to promote its lubricant products. In 1995, it became involved with Formula One grand prix events to promote itself as a global brand and strengthen its technological capabilities through new research and development efforts based on F1 technology.

Formula One is said to be the world's most testing motor sport, posing the toughest challenge to man and machine in terms of speed, performance and endurance.

Currently, Petronas is a key partner of the BMW Sauber Formula One team as well as the title sponsor of the Malaysian Formula One Grand Prix.

Besides retailing, Petronas is no stranger in the Thai upstream and downstream petroleum sectors. In 1990, the Malaysia-Thailand Joint Authority was established to oversee the exploration and production of petroleum resources in the area to the south of the Gulf of Thailand, where the offshore territories of the two countries overlap. The authority will share any resources on a 50:50 basis. The Malaysia-Thailand Joint Development Area currently has three blocks for exploration and development.

In 1997, Petronas entered the Thai downstream sector when it formed joint ventures with PTT for gas pipeline and separation plant projects. Trans Thai-Malaysia (Thailand) and Trans Thai-Malaysia (Malaysia) were set up to oversee operations in the two countries.

So far, about $1.2 billion has been invested in the upstream operations of the Malaysia-Thai Joint Development Area, while Petronas and PTT have jointly

invested $800 million in the related downstream sector.

Nophakhun Limsamarnphun

The Nation

KUALA LUMPUR