FRIDAY, March 29, 2024
nationthailand

Biomass power to help push Mitr Phol revenue to Bt100 bn in three years

Biomass power to help push Mitr Phol revenue to Bt100 bn in three years

Mitr Phol Group targets revenue of Bt100 billion within three years, driven by sugar-related businesses such as ethanol and the biomass power plants it is investing in here and in China, Laos, and possibly Australia.

The company plans to invest in biomass power plants and ethanol through MSF, an Australian sugar miller in which Mitr Phol is in the process of acquiring a 100-per cent stake, in addition to focusing on the sugar business itself, said Krisda Monthienvichienchai, Mitr Phol’s president and chief executive officer.
The group’s revenue in its fiscal year ending last October is estimated at Bt50 billion. He said the company would record increased revenue from MSF in its current 2011-12 fiscal year. In that case, total revenue should grow by more than 20 per cent as usual.
Mitr Phol is in the process of a tender offer for MSF shares. It currently holds a 22-per-cent stake in MSF. Late last year, it announced that it would purchase the remaining shares in the miller, which may require an investment of 313 million Australian dollars (Bt10.2 billion).
Krisda said he had just come back from Australia, where he met with sugar-cane farmers who supply MSF’s four mills. He told the farmers as well as the MSF management team that Mitr Phol would invest in biomass power plants as well as ethanol to increase values from the Australian mills’ business.
Thailand can produce 100 million tonnes of sugar cane per year, while the sugar industry is valued at Bt200 billion per year. Waste from the sugar-milling process can be used to produce biomass power, which can reduce import of electricity by Bt6 billion per year. If the government increased the proportion of biomass electricity it purchased to more than 3,700 megawatts, the value of electricity from this source could go as high as Bt30 billion per year, Krisda added.
“I told them that sugar is not always a sweet business. This industry is volatile, so we have to make value-added products from sugar. Our business in Thailand is an example of how we can utilise all of the output from sugar cane to have zero waste, and we can generate more revenue from related businesses. We plan to propose this idea to the trade minister of Australia in our next visit to that country.”
He said the investment would depend on the Australian government’s policy on biomass power plants. If MSF can invest in such plants, they would be the first renewable-energy plants of their kind in that country, where most electricity comes from coal-fired plants.
Krisda said Mitr Phol’s investment budget for 2012-13 was Bt20 billion, or Bt10 billion per year. Its sugar mill in Loei province with production capacity of 20,000 tonnes per annum will commence operation next October, while the expansion phase in Kalasin province will start production as well. The company will invest in three biomass power plants this year, two in Thailand and one in China.
Mitr Phol is also looking for an opportunity to invest in sugar and sugar-related businesses in Burma, as that country has areas suitable for growing cane. Burma currently imports sugar from Thailand, so there is room to grow the business in that country.
He said Mitr Phol expected sugar-cane production of 17 million to 18 million tonnes in the 2011-12 seasonal crop in Thailand, with sugar-production capacity of 1.7 million to 1.8 million tonnes. In the 2010-11 seasonal crop, it produced 16.7 million tonnes of cane with sugar-production capacity of 1.7 million tonnes.
“We have secured contracts to sell 90 per cent of our sugar production at the average price of 25 [US] cents per pound, higher than around 23 cents per pound in the 2010-11 seasonal crop. This year’s price is very good.
“In Asia, the sugar supply is lower than the demand of 10 million tonnes this year because of the increasing demand from China.
“So it will be another good year from Mitr Phol to export sugar in this region,” he said.

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