Message from the President and CEO

With our 3S Business Strategy (Security, Stability, Sustainability) and 4G Sustainability Strategy (Green Business, Green Production, Greenovative Experience, Green Society), the company has overcome these business hardships. Though Bangchak Group’s performance in terms of revenue and net profit decreased, the Marketing Business Group had a 7 percent increase in oil sales volume in the retail market, and the company’s cumulative market share of 2019 was 16 percent. Green Power Business had a 24 percent increase in total electricity sales volume. Bio-Based Products Business had an increase in B100 and ethanol production. An associated company under the Natural Resources Business, OKEA ASA’s production and sales were nearly as planned, and it had an Initial Public Offering (IPO) becoming a listed company on the Norwegian Stock Exchange.

1. Green Business:

Creating value sustainably and responsibly for the company by investing in the green power business. These are environmentally-friendly businesses and are prepared to face the Mega Trends that may occur in the future. These companies aim to be low carbon emission companies.

Green Power Business: BCPG, our subsidiary, has increased its installed capacity from solar power plants, wind power plants, and geothermal power plants, locally and abroad, with the addition of a hydropower plant project in Laos PDR with a total installed capacity of 69 MW, increasing the total installed capacity of renewable energy to 404 MW.

Bio-Based Product Business: our subsidiary BBGI PLC achieved a 13 percent increase in B100 production volume and a 30 percent increase in Ethanol production volume as a result of production expansion of 2 plants in Kanchanaburi and Khon Kaen, and from efficiency improvement at the BBE plant. The company plans to seek investment opportunities in the bio-based product business through fundraising in the stock market in 2020, to strengthen the group as the largest manufacturer and distributor of biofuels in Thailand.

Bangchak Initiative and Innovation Center (BiiC) BiiC’s objective is to create a Green Ecosystem to drive innovation, focusing on green and bio-based energy. In 2019, the company invested in Enevate Corporation, USA - a reputable startup company that specializes in vehicle lithium battery production technology, and in Bonumose, USA, another notable start-up company specializing in healthy sugars which add value to agricultural produce. These investments are value-added additions to the company’s Bio-based business.

2. Green Production:

focuses on raising operational levels in an environmentally friendly and safe way by using resources efficiently - especially water and energy resources. The Refinery reached an average crude run at a historically high rate of 123.5 KBD in September. Bangchak was the first company in Thailand to have received an ISO 50001:2018 certification, reflecting its commitment to building an energy management capacity to international standards. The company has managed and invested in energy conservation under the Rocket Project, exceeding target decreases in energy consumption in production units. Energy Intensity Index also surpassed the target. Additionally, an Enclosed Ground Flare project, an environmentally friendly, modern green refinery concept caring for the environment around the refinery, is expected to be completed in early 2020.

For water resources, Six Bangchak products earned certification for their water footprints through the Water Footprint of Products Program. Bangchak was the first oil refinery in Thailand to have been certified by the program for its efficient and cost-reducing water management process. The company continues to reduce water usage and wastewater generation; in 2019 the Refinery reduced water use by up to 31% of total water use.

3. Greenovative Experience:

Focuses on creating green experiences and innovations. The Bangchak Greenovative Experience supports the modern Thai way of life, where everyone can live sustainably. These include:

Greenovative Product: Provide green experience and innovation. In 2019 the company increased sales of B20 diesel in the first quarter and started selling B10 diesel in June, which is both good for the environment and helps support palm oil farmers. Also, at the end of 2019 through early 2020 – a period when Thailand faced a PM 2.5 problem - the company helped alleviate the impact of PM 2.5 dust in Bangkok by adjusting the quality of diesel sold in Bangkok to Euro 5 standards. Additionally, the company had developed the "Your Tree" feature in the Bangchak Mobile Application. It displays the amount of CO2 reduction when customers refuel with renewable energy fuel products, to persuade customers to use alternative energy that will help reduce global warming.

Greenovative Service Stations: Develop a unique service station model by bringing in Innovation in environmental care, using both the 4Rs process (Renewable, Recycle, Reuse, Reduce) and the Green Community Energy Management System (GEMS) project at Bangchak Srinakarin Station. The Station is a service station that produces solar electricity for use in shop buildings and the service station, helping to reduce electricity costs and supporting future electricity trading. The system consists of a solar rooftop of the gas station, an energy storage system (Lithium-ion battery) and the electricity trading platform (Auction Exchange) using Blockchain technology developed by Thai entrepreneurs.

4. Green Society:

The company has hosted an annual environmental seminar to share knowledge about innovation and technology that can change and support climate change problems. In the year 2019, we hosted the "Synthetic Biology: World-Changing Science" Forum, including an exhibition on information and products from the SynBio Innovation. Bringing innovation to Living Organisms is the integration of knowledge in biology, technology, and engineering, combined to solve global resource problems and develop new products, reduce the use of raw materials from natural resources, reduce production process, reduce waste, reduce environmental impact, and reduce the cost of production. It is a Disruptive Technology, essentially a tool for designing a sustainable future. The company announced the establishment of the SynBio Academy with public and private partners, both local and from abroad, aiming to support the development of bio-innovation businesses in Thailand through training, meetings, and data sharing.

The company considers the sustainable use of natural resources worthwhile. Therefore innovations have been adopted, per circular economy guidelines, to reduce plastic waste in our Bangchak Group’s business. We have invited Thai people to join the project - "Reduce source waste with Bangchak" - by campaigning for customers to bring their personal cups to Inthanin Coffee Shops. Other changes include using plastic packaging made from biodegradable products, replacing cup lids with a drinking lid – that doesn’t require straws - that could replace more than 60 million ordinary plastic cups to biodegradable cups.

Another ongoing project is "Cups for Seedlings" in which the company has collaborated with the Royal Forest Department, to recycle used Inthanin biodegradable cups to grow saplings, instead of plastic seedling bags.

The company also has invited customers to bring in used PET bottles to join the "Rak Pansuk" project organized with business partners. The used PET bottles are recycled into fibers and used to produce shirts, bags, and hats for public use. The company has delivered more than 600,000 used PET bottles for recycling, intending to reduce a minimum of 10 million bottles per year. The company also has the "Greenovative Lube Packaging" project, where used gallon containers for Bangchak lubricants are processed into post-consumer recycled resin (PCR) and then utilized as a raw material in the manufacturing of quality recycled gallon containers. The Greenovative Lube Packaging Project not only makes use of alternative materials but also reduces the amount of waste and the negative environmental impacts created by improper disposal of these containers – in line with the concept of the circular economy. The company has set a target of at least a 1 million gallon container reduction in waste per year.

On the occasion that Bangchak is entering the 36th year of business operations, we continue to strive to be a leading green energy company in the region, using innovating in an environmentally and socially sustainable way. Our 2019 performance in three dimensions - economy, society, and environment - will ensure that our 3S Business Strategy and 4G Sustainability Strategy can lead the company to environmentally and socially sustainable business development, a good return for shareholders, and value creation for our stakeholders. This is the DNA of Bangchak people.