State energy firm PTT will increase R&D spending
Thailand’s privatized energy conglomerate PTT said last week it will increase its budget for research and development from the 3 percent of annual net profits it currently allots so that it can keep pace with new technologies and stay one step ahead of digital disruption.
The Thai government has instructed state enterprises to allocate 3 percent of their profits for research and development (R&D), as Thailand lags behind some other countries in the region in investments in R&D. Increased R&D is essential for the Kingdom to raise its level of competitiveness and to turn its 20-year national development plan, called Thailand 4.0, into reality.
Although PTT was privatized more than a decade ago, it has been following the government’s guideline for R&D spending. Now, PTT intends to go one better and increase that rate to above 3 percent, according to Wittawat Svasti-xuto, PTT senior executive vice-president for innovation and digital.
The exact rate has yet to be decided, however, and may vary for each individual subsidiary of the group. While the group’s main business is energy exploration, production and sales, its overall businesses are wide ranging and include biotechnology, pharmaceuticals and food outlets.
“Many firms have allocated massive budgets for their R&D activities [for other business opportunities] in the digital era and they always know that some businesses facing disruption will soon disappear from the market,’’ Wittawat said.
PTT has budgeted $311 million for its new innovation center in the Eastern Economic Corridor that will be used for R&D into the bio-based petrochemical products. Under a recently signed agreement with the National Innovation Agency, PTT is also developing a project to use innovative new technology to produce biogas from community waste. That project is also located in the corridor and is expected to result in 9.9 megawatts of power generation capacity.
Under the agreement with the National Innovation Agency, PTT will also develop company-wide R&D practices in three years.
PTT Digital Solutions, another subsidiary, is also involved in the startup landscape, partnering with Rise, a regional startup accelerator, to support innovative technology startups around the region.
“The electric value chain and quality clean energy are challenges for the oil industry, driving us to find new technologies,” said Chansin Treenuchagron, chief of technology and engineering for PTT and chairman of PTT Digital Solutions, told the Bangkok Post.