SET-listed mining contractor Sahakol Equipment Plc (SQ) plans to step into the energy business by operating a coal-fired power plant, expecting to strengthen its coal-related business across the region.
Sasavat Sirison, chief executive of Sahakol, said coal mining is still the firm's core competency but the energy business will help the company manage future risk better.
"The company is seeking new partners that have experience in the power plant business," he said. "We believe the energy business is a key challenge and a big opportunity for us to grow stronger in the near future."
Mr Sasavat said Sahakol has expanded its mining business into neighbouring countries. It also operates dragging and transport of soil and lignite coal for Hongsa Power Co, a local coal-fired power plant with a capacity of 1,878 megawatts in Laos.
In Myanmar, Sahakol has a contract for dragging and transport of rock, soil and tin ore for the Heinda mining project in Dawei. Heinda is located in the Tenasserim Hills on the Thai-Myanmar border. Sahakol is scheduled to start operation of this project in the first quarter this year.
In Thailand, he expects the company to win an auction at Mae Moh mine phase nine in Lampang. Sahakol is also talking with Asean Potash Chaiyaphum Plc about a potash mine located in Bamnet Narong district, Chaiyaphum.
"The company expects both projects to be disclosed soon and I believe we can win both because of our experience in the mining business, such as underground and open-pit mining," Mr Sasavat said. "We had backlog projects worth 36 billion baht as of last September, which were separated into 10 billion for the Hongsa coal mine project, 1.6 billion for Mae Moh phase seven and 3.6 billion for Heinda."
He expects total revenue this year to grow by 20% on increased capacity after Sahakol invested in new machinery last year worth 7 billion baht to upgrade efficiency.
The company has not submitted its full-year performance for 2017, but Sahakol posted revenue of 2.5 billion baht for the first nine months last year, a 24% year-on-year gain.
Net profit for the same period rose sharply, up 138% at 349 million baht.
Mr Sasavat said Sahakol is focusing on its business presence in neighbouring countries to expand future mining projects because the sector in Thailand has aggressive competition and there are too many conflicts with local villagers.
The company expects overseas revenue to make up 40% of the total by 2023, up from 25% now.