Shell banks on centre to boost bitumen sales

The most modern centre of its kind in Asean, and costing Bt100 million, was opened yesterday. Shell will use it to conduct research and development with the aim of offering a wide variety of bitumen products to match the different needs of clients.

"The centre is located in Thailand because the country's bitumen consumption is the highest in Asean and third in the Asia-Pacific, following Australia and Indonesia. Meanwhile, there is demand for different kinds of bitumen for different types of works," said Shell chairman Thiraphot Vajrabhaya.

He said Shell sold 15,000 tonnes of bitumen per day worldwide. However, bitumen sales account for just 5 per cent of Shell Company of Thailand's turnover, with the remainder coming from the oil business.

"Shell is interested in enlarging its bitumen business in the future because it generates higher profit than oil, while the bitumen market in Thailand is expanding," he said.

Pairat Tivakornpannarai, bitumen-product manager for Thailand, Laos and Cambodia, said Shell expected to increase its Thai market share for asphalt products to 25 per cent within the next year, from the current 20 per cent.

Shell ranks second in the market with annual sales of Bt4 billion, while Tipco Asphalt leads with a 40-per-cent share. Shell aims for market leadership within five years.

Pairat said expansion in the asphalt market was dependent on continued investment in road and highway construction. Over the past few years, the market has increased by just 3 per cent annually and is expected to shrink by 10 per cent this year due to budget cuts.

However, the market is forecast to recover next year.

Shell also markets its bitumen in Laos and Cambodia due to the large number of road and other projects in those countries.