SET-listed animal feed producer and trader Thai Luxe Enterprises Plc has announced a 5-billion-baht capital spending budget for 2018-19 as the company looks to expand its renewable energy business in Japan.
Chief financial officer Suwit Wannasirisook said the investment is one of the group's largest. The funds will come from loans, debenture issuance and cash on hand.
Thai Luxe's investment will go to the development of 41 new geothermal units in Aomori, Japan, each with a capacity of 125 kilowatts.
Thai Luxe already operates a geothermal facility in the same prefecture, including 15 units with a capacity of 125kW each. By April, nine more units will be added, and a further 32 units will be in operation by 2020.
The geothermal project will have the ability to generate power all day and night, unlike other renewables whose utilisation rates average 20%.
Thai Luxe also plans to develop 200 new wind turbine power generators in Japan, where it currently operates seven units, Mr Suwit said.
Thai Luxe is shifting its investment strategy towards renewables because these products have thicker margins (about 15%) compared with animal feed products (4-5%).
Revenue from renewables will represent 10% of sales after the investments are completed, up from 5% last year.
Energy-sector revenue is expected to top 160 million baht this year, up from a few dozen million baht in 2017.
Revenue for the animal feed business is expected to grow by 33% to 2.4 billion baht, up from 1.8 billion baht of last year, when it rose 20%.
The shrimp food segment is surging this year, thanks to the higher protein content of the product leading many farm operators to shift to Thai Luxe Gold.
Thai Luxe's production base in Songkhla and Phetchaburi has a capacity of 110,000 tonnes a year. The company expects to utilise 80% of the capacity this year, Mr Suwit said.
Production can be increased immediately in response to growing demand, he said, since the plants currently operate only during the daytime.
TLUXE shares closed yesterday on the Stock Exchange of Thailand at 7.25 baht, up five satang, in trade worth 3 million baht.