by DASHVEENJIT KAUR/ pic by ARIF KARTONO
PETRONAS Dagangan Bhd (PetDag) is pulling the brakes on massive spending as the company seeks to reduce its capital expenditure (capex) by half after 2020 to RM250 million level.
The marketing arm of Petroliam Nasional Bhd (Petronas) allocated about RM500 million for its capex for this year, 67% higher than the RM300 million budgeted in 2018.
MD and CEO Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir said the company will not be able to sustain the current capex in the long term.
“I don’t think we can sustain with this kind of capex for much longer. We are going to push a little bit more until next year, but that’s it,” he said after launching the new range of Petronas Syntium with Cooltech in Kuala Lumpur yesterday.
“We have pushed for the last couple of years to improve our systems. But as you know systems are getting older, our depot needs to be upgraded and maintained carefully.
“After this, it would be business at usual capex, which is about RM250 million for the year,” Syed Zainal Abidin said.
Last year, PetDag’s retail business embarked on aggressive asset refreshing efforts as it transformed the ambience of 300 Petronas stations and 100 Mesra convenience stores nationwide besides opening 12 new stations.
PetDag is also looking to increase its non-fuel revenue to 30% in the next two years from the present 18% by reinventing customer experience at all its stations and partnering potential retailers.
Syed Zainal Abidin said as global trends are moving towards renewable energy such as electric-vehicles, traditional fuel may turn into a diminishing industry and the company must look at non-fuel segments.
“We believe our non-fuel income is a bit low when it comes to the retail profit, and we need to be able to sustain our revenue stream,” he said.
The company’s main revenue is from the fuel segment, while the non-fuel sector contributes between 16% and 18%.
“We are currently upgrading our retail stores to provide new offerings and Setel, our mobile application for fuel payment will be expanded nationwide by year-end. So that’s a big step up,” he added.
Setel, which is Malaysia’s first mobile app for fuel payment, is available at 273 Petronas stations in the Klang Valley.
“By year-end, we will have it available nationwide to eradicate various customers’ pain points when refuelling by integrating payment and loyalty benefits into one app,” Syed Zainal Abidin said.
Setel is also integrated with the Petronas Mesra loyalty programme, allowing customers to earn Mesra points without needing to physically swipe their cards.
On the new range of Petronas Syntium with CoolTech, it is the latest “track-to-road technology” engine lubricants to date by Petronas. The new range also includes the first ever engine oil for hybrid cars.
Mercedes-AMG Petronas Motorsport’s Formula One (F1) driver Lewis Hamilton also shared on how Petronas Syntium plays such a crucial role in the cooling of the engines that supports F1 drivers, especially his team in achieving results on track.
“The teamwork between our technical organisations has been outstanding, and it’s reassuring to know that we have the best and most reliable fluids for our engines.
“It makes it easier to stay focused on our ultimate goal and achieve the best result for the team on the race track,” Hamilton said.