Khon Kaen Sugar keeps its focus on renewable energies

Khon Kaen Sugar keeps its focus on renewable energies

SET-listed Khon Kaen Sugar Industry Plc (KSL), Thailand's fourth-largest sugar miller, expects strong revenue growth this year despite global sugar prices being unlikely to provide substantial profit.

The company's expansion into renewable energy businesses is expected to help boost revenue.

Khon Kaen Sugar, which also produces molasses, fertilisers, ethanol and electricity, expects 2015 revenue will reach 20 billion baht, up from 19 billion last year, said Chalush Chinthammit, assistant vice-president for business development and production techniques.

"This will be another year of strong growth since our expansion is complete, meaning we can run our businesses at full capacity," he said.

"We expect this year's revenue will grow by 5%."

Mr Chalush said the company invested substantially in producing renewable energy and biofuel to capitalise on strong demand, as the government was fully supporting renewable energy producers. Khon Kaen Sugar expanded its ethanol production capacity to 550,000 litres a day, up from 350,000 litres.

The company invested 2 billion baht to increase total capacity on its renewable power plants to 70 megawatts from 50 MW.

"We don't have a plan to invest a lot more after our capacity increases of recent years," Mr Chalush said.

"We've set aside 1 billion baht for this year's investment."

He admitted profit from the sugar business would not be very big this year due largely to weak global sugar prices. However, the company expects sugar prices to be stable this year.

New York raw sugar prices, which reflect global price trends, dropped to between 14.20 and 15 US cents (4.75 to five baht) per pound, far below the record high of 36 cents in 2011. However, traders and analysts expect sugar prices to move in a range of 14-17 cents this year.

Mr Chalush said the company expected to produce 8.7 million tonnes of sugar cane this year, up from 8.4 million tonnes the previous year. That is equivalent to 870,000 tonnes of sugar, up from 840,000 tonnes.

"Khon Kaen Sugar is not very concerned about falling sugar prices since we've diversified our businesses to manage risks," he said.

"We focus more on electricity generation and biofuels such as ethanol, which have strong demand and greater profit margin."

KSL shares closed yesterday on the SET at 13.10 baht, up 10 satang, in trade worth 10.6 million baht.

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