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B Grimm plans big push into power trade

May 14. 2015
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By Kwanchai Rungfapaisarn

The

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LEADING diversified company B Grimm yesterday revealed plans to invest about Bt12.5 billion this year with 90 per cent of the amount diverted into the power business.

Founded in 1878, the company is engaged in the areas of energy, cooling, building and industrial systems, healthcare, lifestyle, transport and real estate. The company plans to list its power business subsidiary B Grimm Power in the local stock exchange by next year.

Harald Link, chairman of B Grimm, said the company is negotiating with the Myanmar government about the possibility of constructing a gas-fired power plant in Yangon with about 400 megawatts capacity. The move is in line with the company’s proactive strategy to explore further business opportunities to invest in the fields of energy, air-conditioning, healthcare and engineering in Asean countries, such as Myanmar, Malaysia, Vietnam, Japan and Singapore, to cash in on the upcoming Asean Economic Community (AEC), which comes into effect at the end of this year.

"I personally expect the ratio of domestic and overseas contributions will be 1:1, one day in the future," said Link.

He, however, noted that the overseas contribution is quite small currently, with less than Bt2 billion revenue from overseas markets expected this year.

"My personal ambition for B Grimm is to increase the company’s total revenue to Bt100 billion within the next five years, of which 70 to 80 per cent will come from the power business," said Link.

B Grimm posted Bt33.06 billion in total revenue last year, up 33 per cent over 2013. Two-thirds of the revenue came from the power business, 15 per cent from air-conditioning, and 10 per cent from healthcare.

"We aim to increase our total revenue by 14 per cent to Bt37.7 billion this year, of which about 70 per cent will come from the power business," said Link.

Link said that B Grimm’s total assets increased gradually from Bt37.7 billion in 2013 to about Bt49.9 billion last year of which 80 per cent was in the power business. The company also expected total assets to surge significantly to Bt62.4 billion this year, with 85 per cent from its investments in the power business.

"This year, we [B Grimm] are focusing on the power plant business with the aim of supporting the total revenue of the whole group. There are few players in the current market place like us, who are able to develop and operate power plant facilities at less cost and high efficiency," said Link.

B Grimm’s fastest-growing business is in energy. Its subsidiary B Grimm Power is recognised as one of Thailand’s leading private power companies.

Currently, there are eight power plants in operation, with a total generating capacity of 892MW and revenue of Bt22.6 billion last year. Last year’s substantial growth of 57 per cent in power business contribution, compared to the previous year, was mainly due to the company’s acquisition of Sime Darby Energy, a Malaysian energy company.

In 2015, B Grimm targets to expand its generating capacity to reach 1,288MW, generated from 26 power plants with expected revenue of Bt26.4 billion.

Link said that the company’s three SPP combined cycle power plants, namely B Grimm BIP Power 1, B Grimm BIP Power 2, and Amata B Grimm Power 4, will reach commercial operation dates within this year. In June, the financing of three power plants in Amata City Industrial Estate in Rayong, totalling Bt17 billion, will be concluded with two local banks and two international banks. In addition, the company has started the construction of a 20MW hydroelectric power project with a local partner in Laos.

B Grimm Power has also joined forces with two major business partners to start the construction of 13 solar farms in Nakhon Pathom, Saraburi, and Sa Kaew, with a total combined generating capacity of 114 megawatts and a total investment of Bt7.5 billion.

All 13 solar farms are expected to commence commercial operations by December this year.

"We expect to expand our portfolio of licences in hand to 5,000MW by 2019, up from 3,000MW today. We would like to increase the licences in hand up to 10,000MW by 2024," said Link.

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