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High cassava prices force rethink of plan
YUTHANA PRAIWAN
Thai Oil Plc, the country's largest oil-refining company, plans to delay its cassava-based ethanol investment plan on rising cassava prices, according to an executive.
As well, the ethanol surplus has yet to be tackled, said the source who declined to be named. "The company needs to keep an eye on the oversupply situation."
He added that export procedures were still unclear and the government's effort to promote ethanol appeared half-hearted as long as the Energy Ministry still insisted on keeping premium petrol available.
"Now the prices of cassava chips have risen to 12-13 baht a kilogramme while there is sufficient production of molasses, which is the other ethanol raw material. We need to study the return on investment once again to see whether it is viable," he said.
Thai Oil had planned to invest 5.1 billion baht in an ethanol plant with production capacity of 500,000 litres a day. It was expected to start operation in the middle of next year.
However, its other ethanol ventures will proceed according to plan. The Mae Sot project, a joint venture with Padaeng Industry Plc and Petro Green Co, would have a production capacity of 100,000 litres a day when it opens late next year.
"The project can be carried out as the capacity is not high and the investors have clear investment plans," he said.
Padaeng and Petro Green each hold a 35% share while Thai Oil has 30% in the 1.5-billion-baht project, located in Mae Sot district, Tak.
So far, Thai Oil has not been seriously affected by the phase-out of octane 91 petrol as its petrochemical business can help absorb the capacity.
With the planned introduction of gasohol E85, in which only 15% petrol would be used compared to at least 80% now, Thai Oil also foresees no decline in production.
"If the government allows us to export petrol then there shouldn't be any problem as demand in the region is still high," the executive said.
It is not concerned about the possible revenue decrease from the oil business because there is demand for diesel and it has high production capacity.
TOP shares closed on Friday on the Stock Exchange of Thailand at 53 baht, down two baht, in trade worth 1.5 billion baht.
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