Bt2 billion will be spent on the construction of two ethanol plants. One will be located in Nakhon Ratchasima province and will have a production capacity of 200,000 litres a day. The project cost is Bt800 million.

A location has not yet been chosen for the second plant, which will have a daily capacity of 250,000 litres and a project cost of Bt1.2 billion.

Both projects will be joint ventures with foreign investors - a Japanese firm for the first facility, a Chinese company for the second. Boonyarit declined to disclose the names of the potential strategic partners, with whom negotiations are under way.

Boonyarit said that the company had delayed the construction of its ethanol plants from last year because it wanted to wait and see the direction of government policy, which is now to control the price and export of ethanol.

"If the government's policy had not changed, we may have delayed construction of our ethanol plants," Boonyarit said.

Other investments include Bt800 million to move its sugar plant from Kanchanaburi to Maha Sarakham this year and Bt150 million to renovate its production plant in Lop Buri.

The remaining Bt600 million will be spent on a white-sugar refinery in China, an investment that is in the process of negotiations with Wangkanai's strategic partner in China.

Part of the funding for the huge investments will come from the company's cash flow and its major shareholders, while the remainder will be borrowed from commercial banks.

"We cannot calculate exactly the percentage used from our cash flow and borrowing from the banks, but we will maintain our debt-to-equity ratio of 2:1," Boonyarit said.

Boonyarit said that since Wangkanai succeeded in restructuring its debt last year, its business plan had focused on sugar and sugar by-products.

 "We expect to be sugar experts rather than diversify our business into other fields that are not related to the sugar business," he added.

The company has a Bt40-million marketing budget to promote Wangkanai sugar in the domestic market this year. For the first time in 30 years, it will launch movie advertisements.

Boonyarit said that the company would also promote one-kilogram retail packages in Hong Kong and Singapore this year. Nine years ago, the company succeeded in promoting its 50-kg packs.

Currently, 70 per cent of its total production is exported to a wide range of markets. The company recorded Bt7 billion in sales last year.

Boonyarit said that supplies of sugar-cane had dropped 15 per cent this year compared with last year following a period of drought.

To maintain its sales, the company will focus on the premium sugar market, which now has higher demand than white and pure white sugar. At present, 60 per cent of its sales come from white sugar, 15 per cent from premium sugar, and 25 per cent from pure white.

Boonyarit said the company expected its market share for premium sugar to increase to 60 per cent this year.

The company is the market leader with a domestic market share of 90 per cent in white sugar and 55 per cent in premium sugar. Its share of the pure white sugar market is only 10 per cent.

"We want to be the leader in premium sugar, and so we are promoting our premium brand in the domestic and worldwide markets," he said.

Somluck Srimalee

The Nation