ASEAN KEY DESTINATIONS
Thailand’s Bangchak takes greener focus
Bangchak Petroleum Plc (BCP) plans to reduce oil refining to 50 percent of its revenue by 2015 from 70 percent now as it invests more heavily in renewable energy.
Volatile oil price fluctuations and global warming concerns are the main drivers accelerating diversification into green energy, President Anusorn Sangnimnuan said yesterday at a shareholders' meeting of the majority state-owned refiner.
Shareholders endorsed a plan to seek up to 15 billion baht (US$495.8 million) in funding to invest in renewable energy, either through bank loans or debenture issues.
Last year, Bangchak's earnings before interest, tax, depreciation and amortization (EBITDA) totaled 5.827 billion baht, up from 5.63 billion a year earlier. Of the total, refining contributed 70 percent and oil retailing 28 percent. It expects that EBITDA will almost double to 10 billion baht by the end of its investment plan.
For oil retailing, Dr. Anusorn said the company had been suffering because of the government's diesel subsidy program, with losses estimated at as much as 300 million baht.
The company earmarked about 20 billion baht for investment between 2011 and 2015. Projects include 13.7 billion baht for a solar power farm, 2 billion to expand ethanol production, 3 billion for potash mining in Chaiyaphum province and 2 billion for palm oil and cassava plantations and for research and development of biodiesel from algae.
The company posted an operating profit last year from its renewable energy business. This year, the first phase of its solar power farm is due to be launched in October. Bangchak expects by the end of this year gross profit from biodiesel and solar power will be 370 million baht, increasing to about 700 million next year.
It has three licences for a combined 118 megawatts for its solar farm. The first 38-MW licence should be operational in October, with the second 32-MW licence and third 48-MW licence built by the middle of this year and next year, respectively.
For its potash mining business, the company will apply for a production licence from the Industrial Works Department and start conducting an environmental impact assessment soon. It also plans to increase its shareholding in this project to 25 percent from 16 percent.
BCP has started to plant oil palm on a 100,000-rai site near Rangsit where tangerines used to be grown before diseases wiped out the crop, in cooperation with local farmers. It will expand a cassava plantation in Ubon Ratchathani as well.
"Although we expect our gross refinery margin will be better than last year, we cannot trust the political situation in [oil-exporting countries]," said Dr. Anusorn.
The company forecasts its total sales this year will rise 20 percent to 160 billion baht (US$5.3 billion) from 136.3 billion last year due to rising oil prices.
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