SET-listed Thai Oil Plc (TOP), the country's largest oil refiner, plans to mobilise funds of US$1.18 billion over the next two years for finance its future investments.
Shareholders yesterday gave the nod to a further $500 million to be raised in addition to $680 million approved last year.
The programme is to serve the planned five-year capital expenditure of 34 billion baht through 2018, aimed at boosting its return on investment capital to top 15% by then.
Chief executive Veerasak Kositpaisal said the planned outlay would focus on higher efficiency at the oil refinery, high value-added petroleum and petrochemical products, energy saving, expanding power business and overseas investments.
"TOP this year will continue with measures to boost efficiency of the refinery and energy saving projects with total investment of nearly 5 billion baht. These plans including a waxy distillation project which could increase high-margin refined oil from our production and reduce the proportion of low-margin oil," he said.
These projects are to be operational by the end of the year and could save millions of baht in energy consumption.
"These projects are short-term measures to gain higher investment returns from cost saving and greater efficiency," Mr Veerasak told a general meeting of TOP yesterday.
For the medium term, the company will allocate 12 billion baht to develop a linear alkyl benzene (LAB) production plant, a feedstock for detergent and related products, in Sri Racha, Chon Buri, with a capacity of 100,000 tonnes per annum.
LAB, a joint-venture of Japan's Mitsui and TOP's subsidiary Labix Co, is expected to operate next year.
TOP plans to develop two power plants with a capacity of 90 megawatts each at the cost of 12 billion baht under the Small Power Producer (SPP) scheme. The projects are expected to operate in 2016. It will double the capacity of solvent production to 141,000 tonnes a year from 76,000 tonnes for 2 billion baht to tap high demand in Southeast Asia.
"These projects will help maintain TOP's return on investment at above 15% for a short and medium terms," Mr Veerasak said.
For the longer term, TOP expects to receive a licence from the Myanmar government to upgrade two oil refineries and develop another refinery in Yangon.
The plan will be submitted by mid-year and then investment partners would be sought to develop the projects, Mr Veerasak said.
Shares of TOP closed yesterday on the Stock Exchange of Thailand yesterday at 52.75 baht, down 25 satang, in trade worth 260.7 million baht.