SET-listed sugar miller Buriram Sugar Plc is downbeat on its 2018 revenue as the global sugar price is expected to drop for the second consecutive year.
Earlier the firm projected a 30% rise in revenue this year from 5.93 billion baht in 2017. But the current sugar price made it revise its full-year target.
Buriram Sugar reported first-half revenue dipped 16% year-on-year to 3.46 billion baht, while net profit fell 56.6% to 288 million baht.
Anant Tangtongwechakit, chief executive of Buriram Sugar, said governments in India and Pakistan subsidise their producers for sugar exports, causing the global sugar price to crash during the first half from a glut.
"Sugar futures in New York dropped to 9.91 cents per pound in August, then increased by 11 cents a week ago, but the price trend has yet to stabilise," said Mr Anant. "This creates negative momentum for Thai sugar exporters as the country is the world's second largest sugar exporter with a production of 10 million tonnes of sugar.
Buriram projects its sugar cane output for the 2018-19 crop year, starting in November, to stand at 3.2 million tonnes, up slightly by 1.4%, producing 380,000 tonnes, up by 0.48% from the last crop year.
The 2017-18 crop year, ending May, produced 3.15 million tonnes of sugar cane and made 378,185 tonnes for sugar.
Pattarapong Pongsawasdi, the deputy managing director, said Buriram Sugar is committed to an investment plan of 750 million baht, with 400 million going to a sugar mill refinery plant with a capacity of 1,000 tonnes daily.
"This facility is expected to start operations by next June," said Mr Pattarapong.
"Buriram Sugar wants this facility to produce new white sugar products that have higher value than ordinary sugar in a bid to diversify into other markets."
The remaining 350 million baht will be spent on a bio-degradable packaging project with a capacity of 800,000-1 million pieces per day.
Buriram Sugar expects to complete this project in the first quarter of next year.
The company also projects two sugar mills to be built with 8 billion baht -- in Buri Ram and Surin.
Each plant will have capacity of 24,000 tonnes per day to process sugar cane.