Bangchak allots B77bn for comprehensive expansion

Bangchak allots B77bn for comprehensive expansion

SET-listed energy firm Bangchak Corporation Plc (BCP) has earmarked 77 billion baht for plans to expand and develop both domestically and overseas over the next four years.

Bangchak operates five business units: oil refining, marketing, renewable energy, bio-based products and natural resources.

"Half of the total budget will go towards the 2019 business plan for power plants, biochemical products and petrol stations," said Bangchak president Chaiwat Kovavisarach. "The other half will be spent during 2020-22."

The budget expects Bangchak to double earnings before interest, tax, depreciation and amortisation (ebitda) to 30 billion baht by 2022.

"Bangchak recorded ebitda of 7 billion baht in 2012, doubling to 14 billion in 2017," Mr Chaiwat said.

Under the four-year plan, Bangchak will increase oil refining capacity from 120,000 barrels a day to 135,000 by 2022 under the budget and reduce CO2 emissions via efficiency improvements.

Bangchak is also expanding its trading business for crude oil, refined oil, biofuel and lithium to mobilise its refinery business unit.

For the market segment, Bangchak aims to increase market share in the oil retail business from 15-16% now to 18% by 2022.

The company will spend 2 billion baht in 2019 to add a further 80 petrol stations from 1,170 nationwide and expects sales to grow by 7-8% from 4 billion litres in 2018.

Moreover, it aims to increase ebitda margin from overseas expansion of the oil retail business to 10% from less than 5% now and from non-oil and lubricant business to 30% by 2022.

The Inthanin Coffee chain, a part of the non-oil business, will add a further 200 cafes to 550 in Thailand and neighbouring countries.

Mr Chaiwat said Bangchak aims to increase ebitda in the green power business, which is run by SET-listed BCPG Plc, a renewable power firm.

The power business is aimed to reach 1,000 megawatts in 2022 from 600MW in 2018.

For the bio-based business, Bangchak will expand biodiesel and ethanol capacity from 1.83 million litres per day to 2.2 million by 2022.

"We will soon set up the bioeconomy hub in the government's flagship Eastern Economic Corridor," Mr Chaiwat said. "We expect the bio-based business to represent 40% of our total revenue, with the remainder for fossil-based oil."

Mr Chaiwat said Bangchak is upbeat on lithium manufacturing for natural resources after acquiring 16.1% of Lithium Americas Corp in 2017.

In the first phase the Canadian firm has lithium capacity of 25,000 tonnes a year and will expand to 50,000 tonnes in the future to serve 62,500 battery EVs a year.

BCP shares closed yesterday on the Stock Exchange of Thailand at 32.50 baht, down 50 satang, in trade worth 95.6 million baht.

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