Two years after listing on the Stock Exchange of Thailand, Ubon Bio Ethanol Plc (UBE) is eager to craft a new image for the company as a functional food maker.
The company remains interested in the ethanol business, but wants to focus more on the development of value-added products, especially future food, to rake in higher revenue and offer new health solutions to consumers.
Some 3.28 billion baht was raised from UBE's initial public offering in 2021, which can fuel plans to direct its businesses with high technology as well as grow the company in a more environmentally friendly manner.
MAGIC ENZYMES
UBE teamed up with experts from Chulalongkorn University to search for special enzymes that can remove some unwanted characteristics of food, helping the company develop innovative food that better matches consumer demand.
Scientists from Biom Co, a startup spun off from the university, specialise in biotechnology R&D.
The team is conducting a study on enzymes that can be used to develop functional ingredients, which can be applied widely in the production of functional food, as well as some medical and daily use products.
Functional food not only provides nutrients and energy, but in theory offers other health benefits, such as modulating functions in the body to reduce the risk of developing certain diseases.
Sureeyot Khowsurat, managing director of UBE, said the company is interested in using enzymes to develop value-added flour products, with plans to produce them on a commercial scale.
If the project is successful, the UBE-Biom collaboration would mark the first use of enzyme technology in Thailand to make new items in the food industry, she said.
One example is a new type of flour. Usually flour is full of fibre, making it difficult for some people to digest. With the help of a specific enzyme, flour can be more easily digestible, but maintain the health benefits of fibre, said Ms Sureeyot.
She said the company plans to use its enzyme know-how to develop new products as feedstocks for producing other products in the food and energy industry over the next five years.
UBE continues to support development of high value-added products by allocating 5% of its profit to R&D projects, said Ms Sureeyot.
FOOD FOCUS
The emphasis on UBE's food business follows promising sales of its products, especially in foreign countries, she said.
The company, which started its business as an ethanol maker in the northeastern province of Ubon Ratchathani some 10 years ago, wants to position itself as a leading food manufacturer.
According to Ms Sureeyot, consumers in China welcomed its cassava starch, while organic and non-gluten flour products drew great interest from customers in the US.
Gluten-free products are an alternative for people who are allergic to or have difficulty consuming gluten.
These products help them avoid symptoms such as fatigue, headaches, abdominal pain, nausea and constipation, she said.
Aiming to catch a trend, UBE also launched flour for making fritters and organic cassava-derived flour with distinctive characteristics, such as low sugar content and high fibre.
The company is allocating 360 million baht to improve flour production efficiency, including debottlenecking manufacturing processes and increasing flour production capacity to 300 tonnes a day, up from 100 tonnes.
UBE is also expanding its food business through asset acquisition, negotiating with companies in the flour business on new investment, said Ms Sureeyot.
She did not offer details on the negotiations, but indicated a deal is expected to be concluded early this year.
Within a few years, UBE aims to have its earnings before interest, tax, depreciation and amortisation (Ebitda) from the food business increase to 70% of total Ebitda, up from 30% in 2023.
The company wants the proportion from the ethanol business to decrease to 30%, down from 70% at present.
MORE ETHANOL USAGE
Despite its new focus on food manufacturing, UBE still plans to operate its ethanol business and called on the government to promote more uses of this raw material.
The ethanol market in Thailand grew slightly last year, said Ms Sureeyot.
Ethanol is usually mixed with gasoline to make gasohol for sale at petrol stations.
Gasohol 91 and gasohol 95, which are blended with 10% ethanol, called gasohol E10, are popular with motorists. The numbers 91 and 95 indicate different octane ratings.
UBE supports the government plan to encourage more use of gasohol E20, with is composed of 20% ethanol, she said.
In 2022, energy authorities announced they planned to make gasohol E20 the primary fuel at petrol stations, replacing gasohol E10, which would gradually be phased out.
As chairwoman of the Tapioca Ethanol Association, Ms Sureeyot said the group will team up with processed herbs and cosmetic makers to push for what she called "free trade" of ethanol-derived alcohol.
The government has strict controls on using ethanol as a raw material to produce alcohol.
Authorities do not allow the use of ethanol-derived alcohol in industries such as cosmetics production.
GREEN MISSION
As part of its business expansion, UBE has made its manufacturing more environmentally friendly by reducing waste and using more renewable energy.
Solid waste and waste water from cassava processing are turned into biogas for use as fuel for power generation, as well as bio-fertiliser to grow Napier grass as food for cows in communities located near the company's factory, she said.
The company's 7.5-megawatt biogas-fired power plant serves the factory's operations and its surplus of electricity is sold to the state grid.
In 2022, UBE bought the American firm BayWa r.e. Solar Pte Ltd, which specialises in solar power technology, for 82.4 million baht to support its plan to produce electricity from a floating solar farm.
UBE aims to increase power generation capacity from this facility to 7MW, up from 2.83MW at present, helping the company to save on electricity costs.
