Bangchak unveils ambitious new strategy as it prepares for sustainable future
Bangchak Group has come up with a corporate strategy to enable its five business groups to achieve 10-fold growth in earnings before income tax, depreciation and amortisation (EBITDA) by 2030.
Chief executive officer and president Chaiwat Kovavisarach revealed that the group had adapted to the Covid-19 crisis with its 3Rs approach:
- Refocus, by accelerating the balance between energy security and the transition to clean energy
- Restructure, by creating new channels to access markets and customers
- Reimagine, by selecting opportunities and investment tools that optimise returns for the company
In the first nine months of 2022, the group recorded EBITDA of 37.773 billion baht, compared to an average of 10 billion baht from 2015 to 2020.
“Today, Bangchak Group is moving towards a critical challenging new era to achieve net zero greenhouse gas [GHG] emissions by 2050, with the first milestone of carbon neutrality by 2030.
“As such, Bangchak has adopted a new vision and mission: ‘Crafting a Sustainable World with Evolving Greenovation’, set growth strategies through to 2030 for the five business groups aligned with the BCP 316 NET plan that will lay the foundation of future sustainable growth targets,” Chaiwat said.
Refinery and oil trading
The company is committed to its niche product refinery capacity such as unconverted oil, and Sustainable Aviation Fuel (SAF) by leveraging growth from new capabilities in addition to refining and process efficiency enhancements, he said.
It aims to increase the EBITDA proportion of non-transportation fuel to more than 60% by 2030.
The company aims to develop consumer-centric services beyond the service station, through the scale-up of non-oil offerings such as food and beverages, and EV chargers, Chaiwat said.
The company also planned to develop partnerships and revenue from the franchise scheme by expanding the service station network to cover 1,900 stations, and 3,000 Inthanin locations by 2030.
Green Power business
The company targets to increase its capacity to 6,800 GWh, mainly from green power business growth from local projects under the new Power Development Plan (PDP 2022 from 2022 – 2037) and development abroad as the world transitions to clean energy, compounded by future peripheral growth such as battery and energy storage, Energy as a Service (EaaS), new forms of energy, and low-carbon businesses.
Bio-based products business
The company targets to increase the proportion of high-value products to more than 70% of EBITDA, to become its core business.
The company plans to emphasise health products development through Synthetic Biology (SynBio) to design and manufacture desired qualities for the global health and beauty segment such as good health and well-being.
Moreover, the company plans to strengthen and expand its biofuel business, especially SAF for the aviation industry.
Natural resources and new business
To address energy security through the expansion of natural resources businesses, with the exploration and growth business, the company targets to produce more than 100,000 boepd (barrels of oil equivalent per day) by 2030 through capability enhancements of OKEA ASA Norwegian oil field holdings, in which Bangchak Group is the principal shareholder.
Moreover, it is exploring growth in other high-potential locations.
Apart from this, the company targets to increase the proportion of new developing businesses to 7 billion baht EBITDA by 2030, such as Winnonie, the battery as a service ecosystem for EV-bikes, liquefied natural gas, and new S-curve businesses.
Chaiwat added the strategy will unlock EBITDA growth up to 10-fold by 2030, while also balancing energy security and environmental sustainability, reiterating the approach to develop sustainable business innovation in harmony with the environment and society.
Meanwhile, the company also revealed its new corporate logo which will be effective from Wednesday.
“From 2015, Bangchak Group, as the leader in energy transition, expanded into new businesses such as green energy business, bio-based products, natural resource, Bangchak Initiative and Innovation Center (BiiC), in addition to its foundational businesses of refining and oil trading, and marketing businesses, and becoming a transnational corporation with operations in more than 10 countries around the world.
“Like a journey into a new era, where more opportunities for growth await, leading to the introduction of the new corporate identity and new corporate logo, symbolising everlasting innovative energy power towards the future," Chaiwat said. "It reflects the vision of 'Crafting a Sustainable World with Evolving Greenovation, mission of 'Committing to accelerate sustainable energy transition while balancing energy security."
"We are energising lives through greenovative solutions and promoting ESG [environmental, social, governance] for all” and corporate strategy for business growth and expansion of Bangchak Group,” Chaiwat said.