BUSINESS ECONOMICS

ANALYZING KEMAMAN
BITUMEN COMPANY
IN MALAYSIA BITUMEN
INDUSTRY

• Mohd Noor Adam Mohd Nordin (M18211013)

KBC History

Date of Incorporation : 21st April 2003

Equity/Shareholders : Tipco Asphalt Public Company Limited (100%)
Refinery : Teluk Kalong, Kemaman, Terengganu
Head Office : Empire Tower, Subang Jaya, Selangor
Competition In The Industry
Refinery
Petronas Dagangan Berhad (PDB)

Kemaman Bitumen Company (KBC)

Bitumen Depot
Innate Sinergy
Shell
Blackhem
Puma Energy

Singapore
Singapore Petroleum Company (SPC)
Chevron
ExxonMobil

LY!
GO PO
OL I
*PDB only have Bitumen depot in Sabah and Sarawak
 
Potential Of New Entrants Into The Industry

After the inception of Petronas as the national

oil company, every oil & gas products seller,
dealer and operator are required to apply for
PDA license under Petroleum Development Act
1974. This is to ensure Petronas business
interest is well protected. This is why, there are
only two (2) refineries producing bitumen and
only four (4) Bitumen depot are licensed to
operate in Malaysia.
 Power Of Suppliers
• BACHAQUERO-13 • BOSCAN • LAGUNA
Typical Typical Typical
Characteristics Units Characteristics Units Characteristics Units
Value Value Value
Gravity °API 12.2 Gravity °API 10.1 Gravity °API 10.9
Sulphur WT % 2.8 Sulphur WT % 5.4 Sulphur WT % 2.66
Kinematic Viscosity Kinematic Viscosity Kinematic Viscosity
CST 48.6 CST 11233 CST 6908
at 100 °F at 100 °F at 100 °F
Vanadium ppm 442 Vanadium ppm 11222 Vanadium ppm 395
Neutralization Mg Neutralization Mg Neutralization Mg
3.13 .91 2.82
Number KOH/gr Number KOH/gr Number KOH/gr
Pour Point °C -18 Pour Point °C 7 Pour Point °C 6
Power Of Customers

140 PWD registered

premix plant
Road contractor Premix plant

West Wharf
Liquid Chemical Berth (LCB)

KBC Refinery

80% 20%
(International) (Local)
Bachaquero
Laguna
Boscan Road Tank Truck
Capped at 20% to avoid
breaching the 25%
maximum local sales
benchmark stipulated in
the PDA License
Threat Of Substitute Products

Types of Road Surface

• Asphalt
• Concrete
• Composite pavement
• Recycling
• Bituminous surface
• Gravel surface
Market Analysis Summary
Factors Affecting Demand and Supply

DEMAND AND SUPPLY

INFLUENCER

PROJECTS PRICE WEATHER

 Elasticity of Demand
3,000 2,804 200
175
Monthly Bitumen Sales 2,500 2,404
180
160
Volume and Revenue for 2,000 1,862
2,0972,022
140
113 114
East Coast Region in 2017 1,385
104 101
1,445 1,433
120
1,500 82 100
75
1,154 71 71
65 61 80
1,000 738 797 753 49 60
500 40
20
- -

Y
V200ER IC
Bitumen Sales Actual Average Margin/mt

3000 186
180AS
T
2500
2,418
2,079
2,224 2,138E
L
160
2000 140
104 103 120
85 85 92 1,356
1500 1,300 1,307 100
1,109 63 73 71
1,493 66 80
1000 840 51
606 35 60
517
500 40

0
20
0 Monthly Bitumen Sales
Volume and Revenue for
Central Region in 2017
#REF! Bitumen Sales Actual
Average Margin/mt
Conclusion & Recommendations

File petition to MITI under

Trade Remedy Measure for
anti-dumping

Diversify source of crude oil to

lower threat of supplier
If KBC take necessary risk
power
mitigation, vigilant in its pricing
strategy and adaptable to changes,
KBC is in good position as a major
Work with the authorities and
player in an oligopolistic market
universities for R&D on KBC
Naphthenic Bitumen

Sale Bituminous product too

instead of just raw Bitumen
Thank You
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