Dr Pailin Chuchottaworn

Pailin Chuchottaworn
President and CEO

PTT Plc

Pailin Chuchottaworn holds a Ph.D degree in Chemical Engineering. In 2011 he was appointed Chief Executive Officer of PTT. Prior to that he was CEO of IRPC (formerly the Thai Petrochemical Industry Public Company Limited).

 

Watch interview highlights

 

A view from the top

In this short video, Dr Pailin Chuchottaworn shares his view on today's key business issues: risk, volatility, innovation, talent, and growth

Quotes

Pailin Chuchottaworn

Dr Pailin Chuchottaworn

President and CEO, PTT Plc

We are now into the fourth year of the economic crisis and none of the European countries have emerged from the downturn – nor are they confident that they soon will. Compare that with the Asian economic crisis that began in 1997. By 2001 or 2002, most Asian countries had repaid their debts to the IMF and Japan.

Pailin Chuchottaworn

Dr Pailin Chuchottaworn

President and CEO, PTT Plc

In the case of the EU, it seems that all its members were anxious to benefit from the union but some didn’t want to uphold their responsibilities. The members of ASEAN must not fall into the same trap.

Pailin Chuchottaworn

Dr Pailin Chuchottaworn

President and CEO, PTT Plc

We have significant investments in North America, Australia, and across Asia. And if the European countries eliminate their protectionist policies, Europe would be very attractive to us also. So I’m rather confident that we can maintain our growth.

Pailin Chuchottaworn

Dr Pailin Chuchottaworn

President and CEO, PTT Plc

We could help with charity and philanthropic work, but we feel that’s not enough. Instead, we intend to provide Rayong with a higher education infrastructure, so that the children living there can acquire the skills needed to work with us in our local petrochemical refinery.

Pailin Chuchottaworn

Dr Pailin Chuchottaworn

President and CEO, PTT Plc

We have already outgrown our country. We’ve exhausted our lending limit with most of the Thai banks. This means that if PTT is going to grow, it needs to grow outside of Thailand.

Pailin Chuchottaworn

Dr Pailin Chuchottaworn

President and CEO, PTT Plc

To provide Thailand with energy security, we need to acquire reserves outside of the country. Consequently, PTT has committed itself to go wherever we can find energy resources. We’ve gone to Middle East. We’ve invested in Australia and Indonesia. And now we are going to Canada to pursue shale oil. So for PTT, overseas expansion is inevitable.

Pailin Chuchottaworn

Dr Pailin Chuchottaworn

President and CEO, PTT Plc

We have already demonstrated that we’re capable of innovating on our own, but the idea of innovation has not yet become embedded in our corporate culture. So we need to change the mindset of our people and encourage them to try new approaches.

Pailin Chuchottaworn

Dr Pailin Chuchottaworn

President and CEO, PTT Plc

PTT does have well trained middle managers, but the problem is, we don’t have enough. So we need to encourage young and capable people to join us in order to realise our growth goals.

 

Read interview transcript

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In your view, what is the current state of the global economy?

The situation is very gloomy. I think it’s even possible that the EU will break apart. We are now into the fourth year of the economic crisis and none of the European countries have emerged from the downturn - nor are they confident that they soon will. Compare that with the Asian economic crisis that began in 1997. By 2001 or 2002, most Asian countries had repaid their debts to the IMF and Japan. So four or five years after that crisis started, most Asian countries had emerged stronger. Now compare that to what’s happened in Europe and the US since 2008. The nations that were hit first - Greece, Spain and Italy - are still suffering serious disruptions and can’t come up with any real cure for their ailing economies. It’s possible that these countries could drag down the entire EU. So it’s clear to me that the world needs a new economic order. But, up until this time, Asian’s role model for it’s own economic community has been the EU. The possible failure of the EU means that Asia will no longer have a good model of economic cooperation. I’m inclined to believe that there’s no way out of the economic crisis other than to accept austerity measures. That is what Asian countries did to deal with their own crisis - and their economies emerged stronger for it. Will Asia and South Asia emerge as the new economic centre of the world? I think that’s highly probable. And, if it does, it may be time for Asians to consider whether or not we want to lead the world out of its economic crisis and what we need to do to accomplish that. Is China prepared to lead the world out of the crisis? Is Southeast Asia prepared for that role? In the case of the EU, it seems that all its members were anxious to benefit from the union but some didn’t want to uphold their responsibilities. The members of ASEAN must not fall into the same trap.

Is it possible that Asia could help revive the economies of the West?

European would first have to eliminate their protectionist policies. They would have to allow China to freely buy or invest in European assets. The US, too, does not allow China to make major investments in America. At the moment, Germany is the “last man standing” in Europe, but it’s quite doubtful that Germany alone can bail out the whole of the European economy. If we want a timely resolution to the crisis, Asian participation will be required. We have a young workforce, we have the financial reserves, and we have the resources.

How confident are you that PTT can meet its growth targets?

The recent flooding that inundated much of Thailand definitely affected the growth of the domestic economy. But it didn’t really affect PTT. We are an energy supplier. And energy is central to the recovery of the country. So, we believe that our domestic sales will accelerate as reconstruction in Thailand moves forward. Moreover, PTT is expanding into foreign markets. We have significant investments in North America, Australia, and across Asia. And if the European countries eliminate their protectionist policies, Europe would be very attractive to us also. So I’m rather confident that we can maintain our growth. We expect to achieve the goal of joining the Fortune 100   by 2020.

Are there strategic priorities at PTT that you want to change or re-think?

Being a state enterprise - a national oil company - our first duty is to guarantee energy security for the Kingdom of Thailand. Our second duty is to contribute to the sovereign wealth of the nation.  And our third duty is to ensure sustainability for the organisation. Sustainability, as I use the term, means that we must have the economic resources to ensure our continuity, and - being a state enterprise - we must maintain the support of the public, which grants us our “license to operate”. Because of the nature of our business, which involves the use of public resources, public approval is vitally important to our company’s success. 

How does PTT go about gaining the public’s approval?

In order to be granted a “licence to operate”, we need to gain the public’s trust and respect. And in order to gain their trust and respect, we need to work with local communities and convince them that their needs are being met. We must let them know that we care for them. So in my view, the term CSR stands for “Care, Share, and Respect”. Of course, there are many ways to approach CSR. One is to follow what I call “the cookbook template”. There are lots of widely accepted CSR practices with which one could just easily comply - go by the book, as it were. But at the end of the day, simply adhering to established practices may not be sufficient to gain the confidence and respect of the community. We try to take an approach that we refer to as “responsible care”. Responsible care is meant to demonstrate our respect for the community. One example of responsible care is a higher education system that PTT is establishing in Rayong. PTT has had significant refining assets in Rayong for about 20 years. And members of the Rayong community, understandably, want some tangible benefits to flow to the community as a result of our operations there. Sadly, right now, we can’t point to much in the way of benefits. The level of poverty in Rayong is about the same as it’s always been. We could help with charity and philanthropic work, but we feel that’s not enough. Instead, we intend to provide Rayong with a higher education infrastructure, so that the children living there can acquire the skills needed to work with us in our local petrochemical refinery. The project will become a centrepiece of our approach to CSR and demonstrate that the PTT Group cares for local communities, shares its wealth with the public, and helps our nation’s children to live in prosperity.

What are PTT’s plans for expansion overseas?

PTT is Thailand’s largest company and our market capitalisation represents almost a quarter of the total share value on the Thai bourse. So we have already outgrown our country. We’ve exhausted our lending limit with most of the Thai banks. This means that if PTT is going to grow, it needs to grow outside of Thailand. I said previously that one of PTT’s prime duties is to provide energy security for the nation. But Thailand, itself, does not have substantial oil reserves, and only limited gas and coal reserves. So, to provide Thailand with energy security, we need to acquire reserves outside of the country. Consequently, PTT has committed itself to go wherever we can find energy resources. We’ve gone to Middle East. We’ve invested in Australia and Indonesia. And now we are going to Canada to pursue shale oil. So for PTT, overseas expansion is inevitable.

What role does innovation play in PTT’s strategic plans?

For Thai enterprise, I view innovation as the final frontier. In the case of PTT, when we look at our basic business, we are essentially a company that engages in resource extraction. The problem in that is that resources are limited and depleting rapidly. To keep finding oil, we have to go further and further out to sea and drill deeper and deeper. So, if PTT tries to maintain itself solely as a resource extraction business, we will encounter greater and greater difficulties. The question is, are there any alternative lines of business that we could pursue? The answer is yes - if we move a little bit away from being a resource-based business and toward a more knowledge-based business. There are many countries that have scarce natural resources - take the case of Japan and Korea, or Switzerland, for example. These countries do business based on their ability to innovate and add value to basic materials.   To lead this company in the next four year, I purposed PTT’s vision to the selection committee that being TAGNOC is the strategic move. We’re normally referred to as NOC: National Oil Company. But my proposal is for the company to become known as TAGNOC, which stands for Technologically Advanced and Green National Oil Company. And that name change will illustrate that we’ve moved away from just being a resource-based company and have, instead, started to become a resource- and knowledge-based company. I’m very proud to say that, all along, our people have demonstrated their ability to transform PTT in that way. For example, we’re now starting to sell environmentally-friendly products. And we intend to keep on that path and increase the number of “green” products we offer. So gradually, we’re becoming a company that markets innovative, value-added products. For PTT, that’s the only direction in which to move.

How will PTT build a workforce that can move the company in the direction of knowledge-based products?

Through training and encouragement!  But admittedly, it’s not an easy job in that it forces us to move out of our comfort zone. Right now, our comfort zone is that we use our ample financial resources to buy technology. We use that technology until it’s obsolete and then we buy newer technology. That’s our comfort zone. We have already demonstrated that we’re capable of innovating on our own, but the idea of innovation has not yet become embedded in our corporate culture.  So we need to change the mindset of our people and encourage them to try new approaches. That’s the two main things that we do to keep our people moving forward.

What is PTT planning to do in order to attract talent in the years ahead?

PTT does have well trained middle managers, but the problem is, we don’t have enough. So we need to encourage young and capable people to join us in order to realise our growth goals. With respect to that, we are planning to do couple of things. First, we’re developing new recruitment and training systems geared toward young recruits. We’ve also established a number of leadership development programmes and stepped-up our recruitment of experienced mid-career managers. Yes, finding a sufficient number of capable managers to support PTT’s growth plans is a really tough job. I’ve taken personal responsibility for HR matters in this organisation because it’s so important to us. If we fail to recruit and retain talented people, there’s no way PTT can meet its growth targets. 

What sort of skills and behaviours are you looking for in the people you hire? 

We need people who have an international mindset and are willing to take risks. Most Thais tend to be quite reserved, but that doesn’t fit with our new corporate culture. In any case, I believe that the young generation in Thailand is more outward-looking and more willing to take risks. And so we have to find those people, encourage them to join us, and give them the chance to perform. At PTT, we’ve come a long way from the sort of conservative corporate culture that is typical of a state enterprise. Still, some of the old culture remains - and we need to change that. We need to totally - from the bottom up - change that old culture. And as I’ve said, that’s not an easy job so I’ve taken personal ownership of that task.

How will you be able to attract and retain this young generation of workers?

By giving them challenges and opportunities to achieve results. Members of the older generation shy away from challenges - but not the younger generation. For myself, I don’t care whether the people we recruit have an impressive academic record or not. I don’t think that really matters. I look for people who are willing to take the risks and responsibilities that come with the job. To me, anyone can be a good manager if there’s a willingness to take on challenges, do the hard work, complete the assignment, and deliver results. That’s more important than an academic record.