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Bangkok Post (Thailand): Shell revamps local stations

Apr 27, 2007

Shell Companies of Thailand has budgeted 500 million baht to renovate petrol stations and improve efficiency this year, according to chairman Tiraphot Vajrabhaya.

Shell has 570 petrol stations, of which 10 to 20 are targeted for closure.

“Thailand is one of the most challenging markets. … Over 10,000 pumps nationwide are much higher than demand,” he said, adding that Shell had seen narrow profit margins in Thailand for two consecutive years.

Shell targets sales this year at 2.8 billion litres, an increase of 6-7% from last. However, the company aims to increase its market share to 18% from the current 16% by 2008. Its operational improvement programme could increase sales volumes by 20%, he said.

Mr Tiraphot said Shell would not abandon its Thailand operations despite the difficulties, and increasing competition from PTT.

He insisted that the expansion of PTT, which recently acquired more than 100 Jet stations from ConocoPhilips, did not intimidate Shell.

However, he conceded that companies including Shell, Esso and Caltex needed to work harder to compete with majority state-owned PTT, the market leader.

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