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Corporate Responsibility and Sustainability News: Gas, Engineering Firm Plans To Invest In Thai Ethanol Plant



From: Busrin Treerapongpichit, Bangkok Post, Thailand
Published September 1, 2004 12:00 AM

Gas, Engineering Firm Plans To Invest In Thai Ethanol Plant

BANGKOK, Thailand — Picnic Gas and Engineering Plc is poised to invest 1.7 billion baht to build an ethanol production plant with a capacity of 500,000 litres per day in a bid to become a full energy-networking company within the next three years.


The SET-listed company also aims to increase its market share in cooking gas to 35 percent in the same period, mainly through its acquisition of World Gas (Thailand), according to managing director Theeratchanon Lapvisutisin.


He said the ethanol plant, which would use cassava as a raw material, would come online by the middle of next year.


The company would realise revenue from the ethanol project in the fourth quarter of next year and expected to break even within five years of operation.


Mr Theeratchanon said the company was considering raising 1.5 billion baht through debentures or loans to fund the project investment.


The project outlook is seen as promising due to the government's full support for biofuel development.


"Apart from the domestic market, we are conducting market surveys in India and China for ethanol development since demand there is growing steadily," he said.


Picnic aims to control a 35 percent share in the cooking gas business over the next three years, up from 8 percent currently, after it took over World Gas (Thailand) which now has a market share of 16 percent, second only to PTT Plc which controls 44.5 percent.


Picnic Gas is in the process of buying all 9.6 million shares of World Gas Co Ltd from SHV Gas NV Group in a deal worth up to US$28 million.


The acquisition of World Gas will increase the company's sales volume by 30,000 tonnes per month.


Seamico Securities Plc has been appointed as an independent financial consultant for the deal.


Mr Theeratchanon said Picnic's revenue was expected to increase to 7.35 billion baht this year, up 200 percent from 2.45 billion baht last year.


However, World Gas has an accumulated loss of 500 million baht and the company planned to write off the loss by reducing the registered capital and then raising it again by the end of this year.


Picnic Gas shares closed yesterday on the Stock Exchange of Thailand at a one-year high of 21.20 baht, up 1.60 baht and compared with a 52-week low of 5.90, in heavy trade worth 905 million baht.


Source: Bangkok Post, Thailand


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