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Taking a look at Petronas Dagangan, Malaysia's innovative fuel retailer

Petronas Dagangan Berhad (PDB), the retailing arm of Malaysian energy company Petronas, posted a 27% increase in profit for the second quarter of 2017, showcasing the company's recent growth and increased brand awareness.

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Last weekend’s Malaysian Formula One tournament was another reminder of how Petronas has become a globally recognized brand. With its involvement in Formula One since 1995 the Malaysian company stablished its brand abroad, paving the way for the expansion of the company to other countries. Since its Formula One team, Mercedes AMG Petronas, signed Lewis Hamilton in 2014 they have won 3 straight World Championships, boosting its world brand recognition even further.

On the fuel retailing side, the company has kept busy by stricking new partnerships with service providers and developing new concepts, as seen with this summer's launch of the Petronas Dagangan online store in collaboration with Shopee. The new service allows Malaysian shoppers to buy Petronas fuel gift cards online and exclusive SEA Games merchandise at discounted rates, with free shipping throughout the country.

“Malaysia boasts 15.3 million online shoppers and we are very excited to be in the e-commerce space. The collaboration with Shopee supports our aim to be an omni-channel retailer and provide greater accessibility to our customers. Today’s shoppers want ease and unique experience, and that is what we want to deliver to our customers,” said Aadrin Azly, PDB Head of Retail Business.

In 2016, the company's retail segment accounted for 56% of its total operating profits. The rest came mostly from the commercial segment, which distributes a wide range of petroleum products to industrial-based customers. From 2014, when the operating profits for the retail segment sank to RM291 million – the lowest since 2010 – the company has boosted its profit due to better margins and a slight increase in prices, posting a RM682 million profit in 2016, according to The Fifth Person. The results of the second quarter of 2017 back the upward trend.

PDB’s results registered a profit before tax of RM317.2 million ($74.9m) for the second quarter of 2017, a 27% increase compared to the corresponding quarter last year of RM 249.7 million ($58.9m). By August 2017 the company enjoyed a market capitalisation of RM24.2 billion.

“Moving forward, for retail business, our focus will remain on enhancing customer experience through superior products and services. We will also continue to seek strategic partnership opportunities to provide added convenience to our customers,” PDB Managing Director and Chief Executive Officer Dato’ Mohd Ibrahimnuddin Mohd Yunus said.

Petronas Dagangan expanded its network of Petronas service stations gradually — from 892 stations in 2008 to over 1,000 stations in 2016. It currently has the largest network of petrol stations in Malaysia. In addition to petrol sales, the company has added a number of value-added service such as Kedai Mesra, the convenience store chain operating at Petronas stations. The number grew from 530 locations in 2008 to more than 760 in 2016.

Other added services include quick-serve restaurants such as McDonald’s, Baskin Robbins and Starbucks, car wash services, car care solutions, and financial services like e-Pay and Touch & Go facilities.

Petronas Dagangan has operations overseas, too, with retail businesses in the Philippines, Thailand, Vietnam, Sudan and South Sudan. Engen Petroleum is Petronas’s African-based downstream petroleum products marketing and retail outfit.

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