SET-listed Banpu Plc, a coal-mining and power-generation group with a presence in eight countries across Asia-Pacific, plans to expand its power business as strong energy demand in the region provides more opportunities.
"Coal is a commodity, so prices fluctuate, but the power-generating business will provide us revenue stability in the long run," said chief executive Chanin Vongkusolkit, who will soon step down to serve as a board director.
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Mr Chanin said the company would focus on Banpu's existing biomass and renewable energy business to serve rising demand.
He outlined a new strategy for the next phase of growth to 2020, comprising three main themes — regional coal business synergies, power business growth and a possible stock market flotation — plus leadership succession plans.
Banpu wants to continue reducing operating costs and improving productivity in order to maintain its competitiveness.
"We're able to expand production in China by applying technology, and that will also be applied to our operations in Australia," Mr Chanin said.
Due to higher operating costs in Australia, Banpu slightly reduced its production to 1.4 million tonnes last year.
Full capacity is expected to be resumed once coal prices improve again.
In the meantime, the company is expanding its operations in China and Mongolia.
Chinese production rose to 8.6 million tonnes in 2014, up by 43% year-on-year.
Additional plans call for building a power plant in China through a venture in which Banpu would hold a 30% stake.
The company also expect to increase coal exports to Japan from the current 7 million tonnes.
Banpu posted a net profit of 2.68 billion baht last year, up by 5% from 2013, due largely to improved growth in the coal business and diversified power generation.
Its coal sales in 2014 reached 44.5 million tonnes, a net rise of 1.65 million tonnes, with a higher volume of 1.88 million tonnes from Australia and a lower volume of 230,000 tonnes from Indonesia.
The average selling price for coal last year was US$65.40 a tonne, down from $72.40 in 2013, as coal market weakness persisted.
"Coal prices remain low, but I believe prices have passed through the bottom and should rebound in 2016," Mr Chanin said.
BANPU shares closed yesterday on the SET at 28.50, up 25 satang, in trade worth 228 million baht.