Ratch cuts reliance on power role

 
Rum Herabat, chief executive of Ratch, said the company kept its growth target for 2023 to a financial goal based on generation of 10,000 megawatts, though part of the total sum would come from non-power businesses. The company owns power plants with a total generating capacity of 6,442MW.
In an effort to diversify its earnings sources, Ratch took part in the BSR-led joint venture that recently won a bid to build the Pink and Yellow Line rail projects in Bangkok. The government is expected to sign an agreement in April or May for the BSR consortium to proceed with the projects. Ratch has a 10-per -cent stake in the joint venture. 
BTS Group Holding and Sino-Thai Engineering and Construction are also bid partners.
Rum cited the evolution of the global power industry from a structure that is dominated by centralised, large power plants to a distributed energy-generation business model for its decision to diversify into non-power business.
“Even though electricity will remain our core business, to mitigate risks, we will also be diversifying into other businesses,” he said.
Ratch is interested in infrastructure businesses including water and utilities, along with other infrastructure projects that require big investments and engineering expertise under long-term contracts. 
It is also on the lookout for related energy businesses including energy services, energy storage systems, liquefied natural gas (LNG), operating and maintenance, coal mining, solar-cell manufacturing, electric vehicles and start-ups.
The company is also keen to participate in LNG floating storage and regasification projects in Thailand and Myanmar, given the fuel’s importance in power generation.
“We have begun to get more involved in the upstream business because it might be necessary for our survival in the future,” Rum said. The company recently announced it would invest in a major nuclear-power project in China.
According to Ratch’s diversification road map, the firm will keep income from domestic businesses to no less than 60 per cent of the total, and double the contribution from renewable energy (including hydropower) to 20 per cent by 2023. Domestic business currently contributes 70 per cent of its total.
In growing its overseas businesses, Rum said Ratch would expand from its current bases in Australia and Laos, while also searching for opportunities in new markets such as Indonesia, the Philippines and Myanmar, which had just been added to the company’s focus markets this year. 
Nevertheless, competition has become more intense in Asian markets where returns from recent projects have fallen from high double digits to low double-digit figures.
Ratch has set a target of growing its generating capacity from 6,442MW to 7,500MW this year. Half of the additional capacity is already under development and construction, while the other half has to be acquired this year.
Separately, Rum said Ratch had two wind-farm projects – Huay Bong 2 and Huay Bong 3 – on Sor Por Kor land in Nakhon Ratchasima, but that both projects had fully complied with the agreements the company had struck with the authorities and communities during the more than four years of their operations. No complaints had been received from villagers. 
Nevertheless, Rum said Ratch would have to await the results of an investigation by the Ministry of Agriculture and Cooperatives into projects on Sor Por Kor land, which is meant to be agricultural.
The ministry on Wednesday said it would investigate the contract terms and compliance history of 17 wind-farm projects that had been leased on Sor Por Kor land. Its report would be announced within 45 days.
The ministry earlier ordered the revocation of a Sor Por Kor land lease to Thep Sathit Wind Farm after the Supreme Administrative Court’s ruling early this month that the wholly owned subsidiary of Energy Absolute did not follow Sor Por Kor regulations.