Eastern Sugar banking on IPO

Eastern Sugar banking on IPO

Eastern Sugar Co plans to expand its renewable energy and biofuel sectors through an initial public offering (IPO), in order to tap rising demand.

Executive vice-president Kittisak Wattanavekin said yesterday the company aimed to raise capital of several hundred million baht to expand its biomass and biogas power plants whose feedstock is waste from the sugar production process.

Capital raised from the IPO would be set aside for working capital, used to develop production facilities for ethanol and organic fertiliser as well as fund research and development.

The sugar producer recently filed for listing on the Stock Exchange of Thailand with the Securities and Exchange Commission. SCB Asset Management has been assigned as financial adviser.

Mr Kittisak declined to reveal the exact figure it aimed to raise from the IPO, only saying the fund would be another big source of the company's investment capital.

"This move is part of the fully integrated system of its sugar business in order to gain higher value from sugar and waste," said Mr Kittisak, referring to the company's huge investment in the past.

He said the last major investment by the group was in 2008-2009, when it invested more than 1.2 billion baht to develop an ethanol production facility to boost daily output to 150,000 litres as well as to develop its biogas and biomass power plants.

The two projects started operation in the second half of 2009 under its wholly owned ES Power Co.

Mr Kittisak said the fund from the IPO would also help enhance the competitiveness of the company in the global market.

"We are the first group in Thailand's industrial sector to run an operation with zero discharge. The second step is that we are moving into the renewable energy and biofuel business," he said.

This integrated process would help the company increase productivity and create additional revenue from waste as well as make cost control more efficient.

The company is supporting sugar growers around its plantation in Sa Kaeo to be smart growers, capable of growing sugar cane at higher yields.

The Eastern Sugar group has a crushing capacity of 32,000 tonnes of sugar cane per day.

The capacity of the biomass power plant stands at 55 megawatts and that of the biogas plant at 4.8 MW.

Some 31 MW of total power generated from the power plant is sold to the Electricity Generating Authority of Thailand.

The company has the capacity to produce 123,000 cubic metres of biomethane per day and 20,000 tonnes of organic fertiliser per year.

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