Ratch in quest of integration
Expanding into new markets and stepping beyond power generation to become an integrated energy company are among the key strategies of Ratchaburi Electricity Generating Holding (Ratch) to overcome its matured growth stage, said chief executive officer Pon
Speaking at a media conference to announce the hand-over of his CEO post to Rum Herabath, 59, who will take charge tomorrow, Pongdith pointed out the two key reasons behind Ratch undertaking a major revamp in its business plan. First is the slump in power demand and more than 30-per-cent surplus of power capacity, which will eliminate the need for new generating capacity in Thailand for at least 10 years. The second reason is the expiration within 10 years of the power sales contracts of Ratch’s principal plants.
Therefore, in a bid to achieve its 10-year business goal to increase its enterprise value by 2.5-2.6 times, from Bt118 billion last year to Bt282 billion by 2023, and to increase its power capacity from 6,200 megawatts to 9,700MW during the same period, Ratch will have to emphasise penetrating new markets other than Thailand and Laos, which are maturing, and new energy businesses such as fuel supply and power distribution and retailing, with strategic partners, he said.
On Monday, Ratch joined forces with Banpu to submit a proposal to build a 2,000MW coal-fired power plant in Indonesia for a total investment of US$3.7 billion (Bt135 billion). Six other bidders are in the mix, four from China and two from Malaysia, taking part in the so-called Java 7 power project. It is also expected to unveil next month a new hydropower project in Laos that will have an installed capacity of about 300-400MW.
On solar-power projects in Japan, it has already signed a joint-venture contract with Chow Steel Group to develop solar farms at two sites for a combined capacity of 33MW, and is considering two more projects there.
It is also expected to conclude early next year an agreement with Taiwan’s Huamin Group for development of a 100MW solar-farm project in mainland China.
Rum said Ratch had enjoyed the power-generation business because it had become accustomed to it. Nevertheless, expanding into new overseas markets and upstream and downstream businesses is not without high risk.
"Therefore, seeking partners and procedures to consider project risks are what we must enhance and strengthen," he said.
Listed on the Stock Exchange of Thailand after spinning off from the Electricity Generating Authority of Thailand’s 3,400MW Ratchaburi power plant in 1992, Ratch is still 45 per cent owned by Egat. It also owns 40 per cent of the 1,878MW lignite-fired Hongsa power plant in Laos, its largest overseas project so far.
