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Thai companies invest in power plant at Dawei, Burma near Kanchanaburi, soon to be deep seaport for shipping to Europe & the Middle East.

Photo above of airport at Dawei which is to be transformed from a small city into an important deep sea port connecting Thailand to India, the Middle East and Europe, avoiding the long detour of Singapore and the Straits of Malacca. 

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Ratch, ITD do Dawei deal: Coal plants to fuel infrastructure projects by Nareerat Wiriyapong

SET-listed Ratchaburi Electricity Generating Holding (Ratch) has formed a partnership with Italian-Thai Development (ITD) for coal-fired power plants producing almost 4,000-megawatts in Dawei, Burma. 

A memorandum of understanding signed yesterday gives Ratch 30% ownership of a new company to be formed next year and ITD 70%. 

In the first three years, three small-power-producer projects will be developed with a capacity of 130 MW each.

Six 600-MW units will also be built under the agreement, but Noppol Milinthanggoon, Ratch's chief executive, declined to give a time line.

The investment cost is US$1.5 million per megawatt. Ratch is also keen on related joint projects in Dawei including a deep-sea port, said Mr Noppol. Dawei, also known as Tavoy, is in southern Burma, west of Thailand's Kanchanaburi province.

SET-listed ITD, Thailand's biggest contractor, has signed a separate agreement with the Burmese government for the 10-year project, with the first phase worth $8 billion.

The entire project could be worth $58 billion.

"Mainly, these power plants are aimed at serving electricity demand in Burma for the many infrastructure projects expected to be built. The surplus will be used to strengthen Thailand's power security," said Mr Noppol. 

ITD may partly offload its ownership in the project to other partners. 

PTT Plc, Thailand's top energy conglomerate, is also keen to take part in the Dawei Development Project. 

Mr Noppol said the Dawei project is among four foreign investments that Ratch has been negotiating, three of which are expected to be concluded next year.

Apart from Laos, Australia and Burma, Asean countries such as the Philippines and Indonesia have been singled out as investment destinations for Ratch.

In addition to power plants, the company holds stakes in coal mines in Australia and Indonesia. 

Ratch predicts its generating capacity will increase from an expected 5,180 MW this year to 6,660 MW in 2016. 

Foreign projects now account for 30% of Ratch's portfolio. 

Thailand's largest private power producer has earmarked 12 billion baht to expand its business next year including through acquisitions. 

Mr Noppol said the company's financial strength gives it room to invest in such projects. 

Ratch has a debt-to-equity ratio of 1:1 and net debt to equity of 0.5:1

Cash on hand amounts to 7-8 billion baht, while shareholder approval has been granted to issue 7.5 billion baht worth of debentures. 

The company will spend 3 billion baht by next June to raise its ownership in Ratch-Australia Corporation, which was renamed from Transfield Services Infrastructure, to 80% from 56.16% now. 

The power producer yesterday posted a third-quarter net profit of 1.23 billion baht, down by 1.7% year-on-year due to foreign exchange losses. 

Revenue nonetheless increased by 31.6% to 14.7 billion. 

Nine-month earnings edged up by 1.7% year-on-year to 4.31 billion baht, while revenue surged 2.9% to 35 billion. 

Mr Noppol said the severe flooding will pressure Ratch's financial performance in the fourth quarter, as many factories and households struggle.

Electricity consumption was relatively flat year-on-year in the third quarter compared with a normal annualised growth rate of 4-6%.

Meanwhile, seven remaining projects by Solarta, a solar farm joint venture 49% owned by Ratch, have been postponed until early next year due to the floods.

Only the first 3-MW phase of a total 34.25 MW is operational.

Ratch shares closed yesterday on the SET at 41 baht, down 25 satang, in trade worth 214 million baht. 

(Source: Bangkok Post, Ratch, ITD do Dawei deal, Coal plants to fuel infrastructure projects, Nareerat Wiriyapong, 15/11/2011, link) 

Energy Sector Joint Venture Foreign Investment Vocabulary

Dawei, Burma - a town located on the coast of Burma, plans are to use this city as a port to send and receive ship goods from Thailand and avoid the Singapore and Straits of Malacca detour, more feasible than the Isthmus of Kra canal idea (See Wikipedia)

Straits of Malacca - a narrow 805 km stretch of water between Malaysia and Sumatra, one of the most important shipping lanes in the world, the main shipping channel between the Indian Ocean and the Pacific Ocean, linking major Asian economies such as India, China, Japan and South Korea (See Wikipedia)

deep-sea port - a port that can handle large ships (See Wikipedia for exact definition)
detour - going around and avoiding a place 

Isthmus of Kra Canal - a plan for a large canal that would cut through southern Thailand to enable improved transportation in the region, like the Panama Canal and Suez Canal (See Wikipedia)

Isthmus of Kra -  the narrow land bridge which connects the Malay Peninsula with the mainland of Asia, Thailand and Burma both own part of this area คอคอดกระ (See Wikipedia)

transform - change

power - energy in the form of electricity produced in large quantities and used to operate lights, machines, and heating
coal-fired power plants -  a plant that produces electricity for the people living in an area "by burning coal to boil water, producing steam which drives a steam turbine which turns an electrical generator" (See Wikipedia)

plants - factories
coal plants - factories to make electricity from coal (same as "coal-fired power plants" above)

infrastructure - the high-cost facilities that everyone in the economy shares (water, roads, electricity, trains) สาธารณูปโภค
fuel - provide the power and electricity for some machine or activity

coal plants to fuel infrastructure projects

SET-listed - when a company's stock shares are publicly traded on the Stock Exchange of Thailand (SET)

Ratchaburi Electricity Generating Holding (Ratch) - a company that generates electricity founded in 2000, sells electricity to EGAT (See Business Week and website)

Italian-Thai Development (ITD) - a large construction company, "constructs civil and infrastructure projects, including airports, buildings, dams and tunnels, highways, expressways, railways, bridges, industrial and power plants, mining, marine construction services, steel structures, telecommunications, and pipelines and utility works. It also provides support services for its construction works covering steel structure fabrication and erection; precast, pre-stressed concrete beams, panels, and viaduct sections; granite and marble cutting and polishing; glass-reinforced-concrete prefabricated elements; and construction plant and equipment maintenance. In addition, the company engages in the real estate operations, and in the rock quarrying, processing, and distribution activities; manufactures and distributes cement; involves in mining business; produces and sells vessels and equipment; and provides foundation and piling work services. Further, the company manufactures and distributes steel pipes for water transmission, piling, and other civil engineering applications; and turnouts for railway projects, as well as offers reinforcing bars and wire rods, enamel-coated wires, and power line and telecommunication cables. Additionally, it leases and sells sheet piles and beams; produces and distributes electricity; manufactures, distributes, and installs concrete sheets; operates as a service agent for Myanmar companies, as well as a designer and contractor for the chemical and petrochemical industry; and offers coal digestion services. Italian-Thai Development Public Company Limited was founded in 1958 and is headquartered in Bangkok, Thailand" (See website and Business Week)

partnership - when two companies join together to do a business or a project
formed a partnership with Italian-Thai Development (ITD)

partners - the companies owning part of the joint venture หุ้นส่วน

offload - sell, get rid of (so you don't have or own anymore)
offload ownership - sell

ITD may partly offload its ownership in the project to other partners. 

coal-fired power plants producing almost 4,000-megawatts in Dawei, Burma. 

memorandum - an informal legal agreement ข้อตกลง
memorandum of understanding (MOU) - a temporary written agreement between two companies, a company and the government, etc, that explains how they plan to do some project or business with each other and what their relationship will be in the future

producer - a company that produces a certain kind of good ผู้ผลิต (here: electricity)
capacity - the amount of something that can be produced ความสามารถในการ (ผลิต)

small-power-producer projects will be developed with a capacity of 130 MW each.

decline to do - refuse to do, say you won't do 
time line - a schedule or calendar for a project or event; a line that shows when different things happen in a project or event
declined to give a time line - did not say exactly when the projects will happen

investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
the investment cost is US$1.5 million per megawatt

keen on - very interested, eager or wanting (to do) something very much สนใจ, ใจจดใจจ่อ สนใจอย่างยิ่ง
joint - done together; belonging to or shared between two or more people ความร่วมมือกัน

joint projects - business projects done together with other companies
keen on related joint projects in Dawei including a deep-sea port

contractor - 1. a person or company whose job is to do work for another person, organisation, company, etc. ผู้รับเหมา; 2. a construction contractor, a company that does construction work on buildings

SET-listed ITD, Thailand's biggest contractor

phase - one part of a project (that has many parts)
first phase - the first part of a project
the first phase worth $8 billion. The entire project could be worth $58 billion.

demand - the need and desire to buy goods and services by households and businesses
expected - believe will happen คาดว่า (จะเกิดขึ้น)

serving electricity demand in Burma for the many infrastructure projects expected to be built 

security - the need to provide safety from attack, harm or damage ความปลอดภัย
power security - plans and measures taken to make sure a country does not run out of electricity (stockpiling natural gas or having many sources, for example)

surplus - an amount above the required or necessary amount
the surplus will be used to strengthen Thailand's power security

conglomerate - a large company joining together a group of companies with different business activities
PTT Plc, Thailand's top energy conglomerate

negotiate - have discussions before making an agreement or contract with other companies or people
the Dawei project is among four foreign investments that Ratch has been negotiating

concluded - ended
expected to be concluded - when they think it will be finished

single out - selected, chosen (from a large group of possibilities)
the Philippines and Indonesia have been singled out as investment destinations for Ratch

stake - owning part of a company
hold stakes in - own part of the company ...
the company holds stakes in coal mines in Australia and Indonesia  

generating capacity - the greatest amount of electricity the company can generate during a period of time
generating capacity will increase from an expected 5,180 MW this year to 6,660 MW in 2016  

portfolio - the set of investments owned by a person or companyl หลักทรัพย์
foreign projects now account for 30% of Ratch's portfolio

earmarked - use for a special purpose or programme
expand - to become larger ขายตัวออกไป

acquisitions - other companies bought by a company
earmarked 12 billion baht to expand its business next year including through acquisitions

financial strength - having enough money to keep the business going, even during hard times, as well as expand the business

room to - ability to do many different things because you have the money and resources, have many different options or choices, flexibility
room to invest - able to make investments (because you have the money and resources)

the company's financial strength gives it room to invest in such projects

debt - an amount of money that you owe หนี้
equity - money for a business that comes from owners, not borrowed money (debt) เงินลงทุน ที่มาจากการระดมหุ้นของหุ้นส่วน the value of a company's shares กรรมสิทธิ์หุ้นส่วนในบริษัทห้างร้าน

debt-to-equity ratio - money borrowed as a percentage of the money contributed by owners to a business (See Wikipedia)

Ratch has a debt-to-equity ratio of 1:1

cash on hand - money that you have now (so you can use it now)
approval - official permission การอนุมัต
granted - officially given ให ้  มอบให้
issue - offering securities (stock shares, bonds) for sale  

debentures - a long-term loan to a company with a fixed interest rate การกู้เงินระยะยาว
shareholder approval has been granted to issue 7.5 billion baht worth of debentures. 

year-on-year - compared to the same period last year (same month, quarter, half year)

foreign exchange - foreign money, foreign currencies
foreign exchange losses - money lost in the exchange of foreign currencies

revenue - income from taxes or business activities รายได้
profit - money that you make from selling goods and services after all your costs have been paid กำไร

surged - increased quickly เพิ่มขึ้นอย่างรวดเร็ว
revenue surged 2.9% to 35 billion. 

severe - very serious and worrying ที่รุนแรง ที่น่าเป็นห่วง
pressure - 1. a force causing change; 2. stress ความกดดัน ความตึงเครียด

performance - how well or badly something works (or whether an investment provides a reasonable return)
households - families or groups of people living together (economics treats this as a unit that makes decisions)

struggle - a very difficult task that you can do only by making a great effort; try hard to do something that you find very difficult ความพยายาม

severe flooding will pressure Ratch's financial performance in the fourth quarter, as many factories and households struggle

consumption - money spent by households and families on goods and services การบริโภค (See Wikipedia)
electricity consumption - the amount of electricity used (by a person, family, business, government, whole country, etc)

annualised - for one year ในหนึ่งปี
rate - the level or speed at which something happens or changes, or the amount or number of times it happens or changes in a particular period อัตรา

Electricity consumption was relatively flat year-on-year in the third quarter compared with a normal annualised growth rate of 4-6%.

venture - a new activity, usually in business, which involves risk or uncertainty ธุริกิจเสี่ยงแต่สามารถทำกำไรได้
joint venture - a business owned and operated by two or more companies

solar - involving the sun เกี่ยวกับดวงอาทิตย์
solar power - making electricity from the sun using solar panels (See Wikipedia)
solar panel - an assembly or array of solar cells
solar cell - the technology that converts the light and rays of the sun to electricity (See Wikipedia)
solar farm - many solar panels joined together to generate large amounts of electricity 

solar farm joint venture - a company that makes money by making electricity from the sun (that is owned and operated by other companies)

postponed - delayed; decided that something will be done at a later time เลื่อนออกไป
postponed until early next year due to the floods

operational - able to work normally ที่สามารถใช้งานได้
phase - one part of an activity or project having many parts
only the first 3-MW phase of a total 34.25 MW is operational.

trade - the buying and selling of goods or assets การค้าขาย
trade worth 214 million baht. 

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