Q: How does the Company give importance to innovation and new business expansions?
A: The Company prioritizes the business portfolio balancing. Bangchak main EBITDA was from only the oil business, a business with high volatility from oil prices, therefore Bangchak group aims to create new businesses to diversify risk and not to rely only on a sole business. Bangchak has targeted for new green business (green energy and bio-based products) to contribute 50% of the total EBITDA in the next 5 years. Innovation has been playing an important role for the changes, new product and business creations, as well as emphasizing Bangchak’s role as a leader in green business with social and environmental responsibilities. In order to reach the target, Bangchak established “Bangchak Initiative and Innovation Center (BiiC)” 3 years ago with 3 main corporate positions including;
- Research and Development (R&D): it is an internal innovation to explore, develop and expand the bangchak’s products to serve potential customers’ needs as well as to research for innovations to catch up with the rapid changes in the global business trend. Its current focus is on bio-based business.
- Corporate Venture Capital (CVC): it is an external innovation to scout startup businesses that would disrupt the current portfolio or would be a new business in the next 3-5 years. With this, some employees went to well-known places such as Silicon Valley, USA, Europe, Israel and China to study, and explore the global startup innovations and technologies that could be beneficial to BCP group, especially in green energy and bio-based products.
- Ecosystem & Incubation: it is a hybrid innovation that explores collaboration with startups including universities, research institutes and other public sectors in Thailand by inviting them for project proposals that could solve problems or increase the company’s competitiveness. Then, an internal startup or “The Intrapreneur” project is provided for new employees who have the idea about new different businesses from Bangchak’s current portfolio, and be able to further study and execute as a new business.
Another issue is that the Company realizes the importance of the digital system that has also been playing a very important role in business; therefore, the “Corporate Digital Transformation” unit was established under BiiC this year as well. This is to find pain points or needs of internal departments and use digital technology to help solve those pains such as reducing working processes, increasing the potential of employees, or developing business innovation with digital technology that can generate additional income or reduce expenses for the group.
Q: How does Bangchak foresee the innovations’ significant role in our business, and how would BiiC drive things to happen?
A: As the target of green businesses’ EBITDA to become 50% of total group EBITDA over the next 5 years, innovation is then very important for BCP group, BiiC is the key driver. For example, BiiC has been looking for innovation from startups such as energy efficiency and digital energy to be additional businesses or new engines that would help BCPG grows further. For the bio-based business, the example would be dated back to 5-6 years ago when seaweeds were explored to be used in biodiesel production as they give a higher yield with a lower price comparing to palm oil. R&D was started to develop biodiesel products from seaweeds. Unfortunately, the oil price significantly declined afterward, such research was reconfigured to become a high-value product as Astaxanthin, an antioxidant that is thousand times better than Vitamin C. R&D could successfully research on Astaxanthin within 2 years, also, this is currently being developed into a pilot plant that should be completed within a year from now. By this, it could be seen that BiiC has been looking for new products apart from the energy business. It could be plant-based protein supplementary food, food ingredients, or cosmetics. BiiC has also jointly invested with the startup having high technology in synthetic biology. This technology is going to change the world. It is what we have jointed investment to draw the technology to Thailand, and will become the new products of BBGI.
Q: Which start-up business that BiiC is interested in?
A: For new start-up businesses, BiiC is searching for the ones that create synergies for the BCP group. We are now focusing on 2 aspects of green business startups: 1. Green energy for BCPG, emphasizing on high technology in digital energy, battery, energy efficiency, etc. and 2. Bio-based products for BBGI such as food ingredients, alternative protein and cosmetics, which are high-value products made from Thai agricultural products. We are interested in either Thai or foreign startups with high or deep technology.
Q: Mr. Suwat, would you please tell us about “Winnonie” for its background, pattern and the project progress?
A: Since there has been the training on “Design Thinking” provided by HR to employees in all levels for the last few years, it led to an idea of a project competition for young employees which, at last, developed to “The Intrapreneur project” which turns our employees into entrepreneurs. Participants will have to deeply understand problems of customer groups (Empathizing) including their needs, pain points, and how we can help and create new businesses to solve their problems, and such new business must also be further developed or related to the Company’s businesses. “Winnonie project”, debt-free motorcycle-taxi project, was the first of our startup team. The project was approved to conduct a pilot test for 3 months with the taxi motorcyclists in the areas around the head office and Bangchak’s refinery. The objective is to help reduce their main pain point of debt burden by renting electric motorcycles which reduces the burden of leasing at a very high interest rate. Meanwhile, this is environmental-friendly as electric motorcycles could help reduce PM2.5 as well. Currently, there are 15 taxi-motorcyclists participating in Winnonie in which it is expected to increase by more than 10 times next year. Moreover, the team has been continuously developing by using new business models to suit with real implementation such as “Battery Swapping Station”, that switch a used battery with a fully charged one instead of normal charging to save user’s time, in which we are one of the first in Thailand. The company foresees the electric motorcycle further business opportunity and it corresponds to Bangchak business, which is committed to develop the green business along with society and environment.
Mr. Suwat Meemook
Executive Vice President
BIIC - Bangchak Initiative and Innovation Center