Year 2010

 April

Ratchaburi sets US$511m budget through 2016
Refiner aiming for 600,000 litres a day

By YUTHANA PRAIWAN

Thailand's largest private power producer, Ratchaburi Electricity Generating Holding Plc (RATCH), plans to invest US$511 million from this year to the end of 2016, said president Noppol Milinthanggoon.

Most of the budget is going to its hydroelectric and coal-fired power plants in Laos, based on its equity ownership in each project. The company holds a 40% stake in the $3.7-billion coal-fired Hongsa Power Co plant; and 25% each in two hydroelectric plants: the $865-jlmillion Xe Pien Nam Noy and the $1.01-billion Nam Ngum 3.

The Hongsa plant is scheduled to start operating in 2015, while Nam Ngum 3 and Xe Pien Nam Noy are expected to start producing power by 2017.

The expansion in Laos is part of a strategy to sustain performance in the long term and diversify the risks from possible shortages of fuels in Thailand.

As a result of a shortage of natural gas from Burma for 10 days in the first quarter, Ratchaburi's net profit fell 21% to 1.4 billion baht from 1.8 billion a year earlier. The decline reflected rising fuel costs, even though its revenue rose 30% to 10.3 billion baht, as power demand in the quarter increased.

''After [all of the projects in Laos] are finished, our power capacity will rise by 27% to 5,518 megawatts in 2016 from 4,500 MW now,'' said Mr Noppol.

The figures do not include plans to acquire operating assets, as it is now negotiating with other power generation operators. As well, it aims to acquire shares of power operating licence holders.

''If [the combined capacity target] includes the acquisition plan, it would rise to 7,800 MW in 2016 or by 73% from now,'' said Mr Noppol.

The company is confident that it can fund all of the investments as it already has earmarked cash on hand of about 10 billion baht for ongoing projects, For mergers and acquisitions, it has agreements with commercial banks for up to 25 billion-baht in financing.

''We are not only talking about acquiring projects, we also have put in bids to build and operate power plants in Southeast Asia, such as independent power producer businesses in Indonesia, the Philippines and Vietnam,'' he said.

''Also, we have a company doing an operation and maintenance business ready to provide service in the region.''

Out of the total investment budget, the company also has one project that is nearly complete, the $1-billion 615-MW Nam Ngum 2 hydropower plant, due to operate by the end of next year.

Shares of RATCH closed yesterday on the SET at 36.50 baht, up 25 satang, in trade worth 3.45 million baht.

By Bangkok Post

April 30, 2010

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