Bangchak touts growth path under diversification 

The company would also strengthen its resources and bio-products units under plans to bolster their status as the “fourth and fifth pillars” of the business.
Reflecting its diversification beyond the oil and gas industry, the company will ask its shareholders at the annual meeting on April 5 to approve a name change to Bangchak Corporation.
Chaiwat, who is also the company’s president, said Bangchak had succeeded in solidifying its three core businesses: refinery, marketing and electricity. Now, he said, it was time for Bangchak to move ahead with a plan to build up the resources and bio-products businesses and make them significant contributors to the group’s income within two years.
The group could list the two operations on the stock market, depending on capital requirements, and thus realise the true value of the businesses, he said.
Chaiwat said he was satisfied with all aspects of Bangchak’s businesses that he had overseen in the two years since taking the helm of the company. One exception, he said, concerned the valuation of the company by the stock market. Bangchak shares are being traded on the Stock Exchange of Thailand at just about 9 times its earnings.
In comparison, BCPG, its spun-off power subsidiary, has gained a |better realisation in market value, being traded at over 16 times its earning.
Chaiwat said each of the resources and bio-products business groups should generate EBITDA of at least Bt1 billion annually by 2019, up from about Bt300 million and Bt400 million to Bt500 million, respectively, at present. Bangchak reported consolidated EBITDA of Bt18 billion last year.
The bio business could show major development this year with several high-value-added products in the development pipeline. One of them is phase-change material, which is the subject of discussions for a joint-venture plan with potential Japanese partners, Chaiwat said.
Bangchak is also looking to expand the production capacity of its bio-fuel business, through organic means and mergers and acquisitions. Current output is not sufficient for its internal requirements. Bangchak uses 800,000 to 900,000 litres of ethanol a day; its current capacity is only 200,000 to 300,000 litres.
The resources group includes its petroleum and exploration and lithium-ion mining businesses.
On the rebranding plan, Chaiwat said the planned deletion of “Petroleum” from the company’s name would reflect its business direction to “rebalance” its operations toward more sources of incomes beyond fossil fuels. Unlike 30 years ago, “petroluem” nowadays is not such an alluring name, he said.