Trang Palm Oil to tap Mai, expand power plant
Bt400 million needed for project.
Trang Palm Oil plans to mobilise funds on the Market for Alternative Investment (MAI) in 2012 and 2013 to expand the capacity of its power plant.
Managing director Manit Wongsureerat said the company plans to boost the plant's capacity from 2MW to 9MW. The company's palm-oil operation produces enough palm shell and other waste products to be able to produce 9MW, but its plant's capacity is only 2MW.
To realise the expansion plan, the company needs Bt400 million, so it is considering ways of raising the funds, including tapping the MAI.
Trang Palm Oil has appointed KT-Zmico Securities as its financial adviser.
The company is applying for a Bt300-million loan from Bangkok Bank, and hopes to pay off the debt gradually with funds earned after listing on the MAI, Manit said.
The firm plans to make the power plant itself its core business in the near future on the strength of steady purchasers, including the Electricity Generating Authority of Thailand.
The company's electricity business generates average revenue of Bt40 million per year. However, it plans to more than triple its annual income to Bt130 million after listing on the MAI. At present, the company's core revenue comes from crude palm oil, which generates Bt1.2 billion per year.
The company plans to invest another Bt500 million to facilitate its diversification into cosmetics, the key ingredients of which would come from crude-oil extracts.
"We have heard that producers of cosmetics and related products want natural materials, with palm oil as a required ingredient," he said.
The company plans to increase its registered capital from the current Bt108 million to facilitate business expansion.
Addressing the concerns of suppliers of crude to oil companies, Manit said the government's inconsistent policy on alternative energy had prompted Shell and PTT to delay purchases of crude oil. However, the problem has not caused major difficulties for Trang Palm Oil itself, Manit said, as the company exports to refineries in Malaysia.
