Ratch Group Plc, Thailand's largest private power producer by capacity, expects revenue from the non-electricity segment will increase to 20% of total earnings within five years after the company diversified into infrastructure businesses, including monorail development and motorway maintenance.
It will also sign a join venture agreement with Electricity Authority of Thailand and its subsidiary Electricity Generating Plc to set up Innovation Holdings Co, with 250-million-baht registered capital, to study electric vehicle and charging facility business once the joint venture is approved by the cabinet.
Ratch began diversifying its business several years ago in a move to lower the risk of depending on a single source of revenue.
It expects earnings before interest, taxes, depreciation, and amortization (Ebitda) from non-electricity business will increase to 20%, from 5% at present, within five years, said Ratch chief executive Kijja Sripatthangkura.
Ratch earlier invested a 10% equity share in a consortium hired by the government for the operation and maintenance of Bang Pa-in-Nakhon Ratchasima (M6) and Bang Yai-Kanchanaburi (M81) intercity motorway projects.
The company also formed a joint venture to develop and operate two monorail projects -- the Pink and Yellow lines -- worth 105.45 billion baht. The rail service, covering 65 kilometres, is scheduled to operate next year.
Last month Ratch acquired a 15.5% stake in jet fuel service provider Bangkok Aviation Fuel Services Plc (BAFS) from Thai Airways International Plc at a cost of 2.71 billion baht.
BAFS has a monopoly of jet fuel service, with long-term contracts with customers. Though BAFS was hit by air traffic restrictions during the lockdown, business should improve later this year following Covid-19 vaccine distribution, said Mr Kijja.
"We are looking for infrastructure projects with private partnerships under long-term contracts," he said.
Ratch is also preparing to develop a wood pallet production plant in Laos after obtaining a licence from the Lao government last year. It plans to start construction within the first quarter.
The plant, which will use raw materials from nearby tree growers, is designed to have an annual capacity of 60,000 tonnes. The products will be exported to East Asia.
For the electricity business, Ratch expects to add 700-megawatt power generation capacity to its production this year, a 10% rise from 8,174MW last year.