Bangchak interested in only a few RPC stations

“Currently, we have not made a decision on purchasing RPC’s gas stations because we don’t know if RPC feels it is more advantageous for them to sell all their stations to one buyer, or just some to multiple buyers. Either way, Bangchak is only interested in buying 10 suitably located stations,” Anusorn Sangnimnual, Bangchak’s president, said yesterday.
Negotiations are not yet complete because RPC may want to ideally sell all of its 60-70 stations to one buyer, but Bangchak only wants those with long ground leases remaining and locations away from its own stations, he said.
Bangchak already has a company that is expanding production of biodiesel from 300,000 litres to 360,000 litres per day. If the government’s policy is to support only biodiesel B5 fuel, then Bangchak has no need to expand its current capacity any further.
Bangchak is concerned about the demand for ethanol produced from cassava because it costs Bt6 more per litre compared to ethanol from molasses. Molasses ethanol costs Bt20 per litre while cassava ethanol is Bt26. Petrol traders are not buying cassava ethanol because mixing it with diesel results in a higher pump price.
Cassava ethanol at the price of Bt26 per litre represents 30 per cent of Bangchak’s fuel purchases and the Oil Fund provides a subsidy of Bt6 per litre. The government’s intended policy is to require all petrol traders to buy cassava ethanol equal to 30 per cent of their total purchases. If it follows the plan, demand for cassava will increase by 1 million tonnes per year.
If sales of 91-octane petrol are halted, that will create demand for 500,000 more tonnes of cassava per year. Currently, the domestic demand for cassava is 6 million tonnes per year and the country exports 16-17 tonnes per year.
Cassava price will increase to Bt3 per kg from the current less than Bt2 per kg. This increased cost will only translate into 10 satang per litre. With the mixing of B100 with 5-per-cent diesel concentrate, the public will shoulder 50 satang per litre.
Bangchak plans to add auto repair services at its filling stations. It will be a joint venture with international specialists that have the required technology for these services. Bangchak would then be able to offer faster auto repair service at its gas stations than car service centres or garages.
First-quarter results will be positive because the company’s gross refining margin (GRM) has improved. GRM without oil stock is US$6-$7 per barrel, but combined with stock, it jumps to $10 per barrel.
The company’s refining capacity increased to more than 100,000 barrels per day. Solar power generation is now contributing to gross revenue. The company forecasts earnings before interest, tax, depreciation and amortisation at Bt300 million this year and Bt 1.5 billion next year, he added.