UAC growth plan centres on Laos, Myanmar

Kitti Jivacate, CEO of UAC, said in a recent interview that the company is interested in investing in hydroelectric plants in Laos, wastewater treatment systems for industrial estates in Myanmar and water purifying facilities in Indonesia.
In Myanmar, the company expects to win two projects in Yangon and Mandalay worth nearly Bt1 billion, which are expected to start construction in the middle of next year and end in 2015. They would contribute Bt300 million-Bt400 million in revenue.
In Laos, some projects are undergoing a feasibility study.
Projects related to water both in and outside the country would be led by its 50-per-cent joint venture UAC Hydrotek Co.
Most of UAC’s revenue comes from trading equipment and petrochemical products such as natural gas.
The Market for Alternative Investment-listed firm also plans to increase its revenue from investment and the joint venture businesses to 50 per cent of total revenue from 15 per cent currently.
UAC’s business is broken down into trading, investment and joint ventures. For investment, the company’s joint venture Bangchak Biofuel Co has the capacity to provide 360,000 litres a day of B100 biofuel. UAC holds 30 per cent and Bangchak Petroleum holds the rest. The plant will be expanded next year.
Since 2010, UAC has invested Bt130 million in a compressed bio-methane gas (CBG) project with capacity of six tonnes per day in Chiang Mai. The project began commercial runs this year.
UAC plans to invest more in CBG projects with a subsidy from a government entity next year. Its Bt620-million PPP project in Sukhothai will operate commercially in May next year. The plant will produce 12,036 tonnes a year of CNG, 6,300 tonnes a year of LPG and 1,345 tonnes a year of NGL.
“The joint-venture business gives a higher rate of return than the trading business,” Kitti said.
The company could save as much as 20 per cent from Board of Investment tax incentives when investing in any projects in the energy sector.
The sources of funds for the expansion plan would be a public offering (PO) and bank loans.
“We expect to have Bt200 million-Bt250 million in more funds from the share sale, depending on the PO price, to invest in our planned projects,” he said.
Subscription for the PO shares is expected to open and the proceeds received in the first quarter of next year, which would double the company’s paid-up capital to Bt500 million.
The company is committed to keeping its debt-to-equity ratio below 1 time.
UAC’s net profit in the first nine months was up by 30 per cent to Bt26.87 million.
“We expect revenue to reach the target of Bt1 billion, growing 15 per cent, and the revenue target in three years is Bt3 billion,” he said.
UAC’s stock on Friday closed down 1.92 per cent at Bt7.65 per share.