Petronas Dagangan Bhd (PetDagang) is a company that needs little introduction to Malaysians. Incorporated in 1982 and listed in 1994, it is the principal domestic marketing arm of national oil giant Petroliam Nasional Bhd (Petronas). PetDagang markets a wide range of petroleum products including motor gasoline, aviation fuel, kerosene, diesel, fuel oil, bunker fuel, lubricants, liquefied petroleum gas (LPG) and asphalt in Malaysia.

Amir Hamzah Azizan, managing director and CEO of PetDagang, shares with The Edge Financial Daily his strategies and vision for the company.

What are the company’s competitive strengths and advantages?
Amir: In addition to the strong brand presence through Petronas’ involvement in Formula One Grand Prix, Petronas’ collaboration with strategic partners such as the Mercedes GP Petronas Formula One Team has built in-house expertise in fuel and lubricant technology which has contributed to delivering breakthrough products exceeding customers’ expectations.

The latest addition to our fuel stable, the Petronas Primax 95 Xtra, a RON 95 fuel inspired by the Formula 1 technology; and our world class lubricants, Syntium and Syntium Moto, add to the other niche products developed to support the industry’s demand and consumers’ requirements.

Apart from offering high-quality petroleum products, PetDagang is also committed to offer convenience and continuously reward our consumers through the services offered at our retail outlets and various initiatives and promotions. Our loyalty programme promises to provide our members with a wider range of benefits and strengthen our brand in the market.

As a key differentiator, Petronas service stations also offer the convenience of a one-stop centre, offering various services and facilities in line with our commitment to support our customers’ needs. The offerings include items ranging from foodstuff to household, car lubricants and accessories, as well as other facilities including banking and e-Pay.

PetDagang has a large network of 958 petrol stations and 619 Kedai Mesra located across Malaysia. Our petrol station network also includes more than 40 quick-serve restaurants and more than 600 ATMs nationwide.

Amir: We are ready to overcome business challenges in the year ahead.

In our aim to be a reliable partner and supplier in the retail and commercial segments of the petroleum industry in Malaysia, we have further expanded our extensive logistic and distribution networks to ensure operational efficiency. We also have a strategic network of bulk and aviation depots, bunkering facilities, LPG bottling plants, as well as a comprehensive fleet of tankers to ensure seamless delivery of our products and services at all times.

PetDagang also provides the advantage of added assurance to our customers as they have a central point of reference for all questions and inquiries through our customer service call centre, Mesralink. Consumers can rely on us to offer a comprehensive solution to their individual or business needs.

What have been the major achievements of the company in the past four years?
PetDagang has been innovative with our offerings particularly in our retail business segment. Since our establishment, we continued to lead the way in the domestic market with several initiatives including the following:

•     The first unleaded petrol in 1990
•     The first API SL grade lubricant in 2001
•     The first hyperstation with a one-stop centre concept to provide more convenience to customers by incorporating a supermarket, postal service and quick serve restaurant in 2003
•     The first API SM grade lubricant in 2004
•     The first Pay-At-Pump facility for EMV chip-based credit card in 2005
•     The first Euro 2-M fuel standards in the market in 2009
•     Syntium Moto lubricants; a premium-quality lubricant for two-wheel vehicles in 2010.
•     NGV lubricants for gas powered vehicles that provides excellent protection at higher operating temperature of NGV engines in 2010
•     Nautimar Fishing Boat Oil; a marine lubricant that addresses Malaysian fishermen’s requirement for lubricants in 2010
•     Introduced in 2010 Petronas Primax 95 Xtra; a revolutionary RON 95 fuel inspired by the Formula 1 technology in April 2011
•     Within the petromart industry, PDB was the first to introduce Petronas Mesra Shoppe; the first standalone convenience store in 2009.

We also achieved more than RM1 billion in pre-tax profit for two consecutive years (FY March 2010 and 2011), with PetDagang’s share price growth overtaking the market’s.

What are the major challenges your company faced over the years and how did it overcome them?
The challenges we faced include stringent products quality and competitive substitution; introduction of new policies and regulations; rising costs leading to compressed margins; development of efficient & innovative technology and changes in consumers’ profile.

PetDagang overcomes the challenges by focusing on producing as well as offering quality and innovative products and services. We are committed to continue reaching out to our customers, shareholders and stakeholders through various means and initiatives.

We will stay focused in our quest to grow and remain competitive, adding value to our stakeholders through initiatives which include innovation and change, enhanced operational efficiency, cost optimisation and excellent services for customers’ satisfaction and loyalty.

When we started out in 1982, PetDagang was a fledgling company competing in unfamiliar territory against multinational corporations with substantial experience. Over the years through perseverance, a sense of national responsibility and a passionate workforce, we have overcome many odds to be the market leader in Malaysia.

How is the company positioning itself within your industry? What are your strategies to grow or gain market share?
PetDagang is committed to a growth agenda to solidify our position as the market leader. We are disciplined in continuously investing time, resources and expertise to enhance our customers’ experience by delivering top quality products and excellent services.

As a domestic petrol retailer, two key elements to sustain business growth are high-quality products and unparalleled customer services.

What is also fuelling growth is the changing face of the typical petrol station. Nowadays, consumers can expect to find convenience stores, coffee joints, restaurants and banking facilities apart from just petrol pumps at their neighbourhood petrol station. We are beginning to redefine convenience for the consumers.

Apart from that, PetDagang also integrates a comprehensive sustainable framework into all our four core businesses of retail, lubricants, commercial and LPG to ensure the highest standards of business operations and sustainable performance. In addition to our business expansion plans, we have also facilitated a more effective and meaningful communication between the company, our shareholders and the financial community in our investor relations activities.

What are your company’s plans for the future, short- and long-term? What are your plans to compete in the increasingly globalised environment?
Our plan for the near future is to remain vigilant and flexible in responding to ever changing market demands and customer needs, which we believe will further create and grow shareholders value, and eventually push at our current domestic boundaries.

Numerous challenges need to be addressed, as the oil price volatility affects product cost, directly impacting on margins. Apart from prudent capital investments to ensure the company’s growth and competitive edge, stringent inventory management will continue to be exercised moving forward.

We will remain committed to offer high-quality products and services through continuous efforts to enhance our offerings not only at our petrol stations but also throughout our business divisions. We will also continue to reach out to our customers and loyalty members. We intend to show them that we are with them all the way, and will continue to give them all the right reasons to choose PetDagang as their brand of first choice.

What is your dream for your company? How would your like to see it in 10 years?
Growing only in size and sales volume will not turn PetDagang into the leader I envision; we must also be top in class in business conduct and operational standards.

To our customers on the road, this means uncompromised excellence in customer service and superior quality products that cater to their needs.

I would like to see PetDagang as a company held in high regards by the corporate community as well as the man on the street for its strong business acumen and unbending integrity.

With continued focus on improvement initiatives and human capital development to ensure operational excellence, we are ready to overcome business challenges in the year ahead. We are determined to deliver the best products and services to the satisfaction of our customers, while adding value to shareholders and stakeholders. Our vision is to be the “brand of first choice”.–The edge  Malaysia