Mitr Phol, called Mipeng Co in China, has four core businesses - sugar, yeast, logistics services and the newest, pulp and paper manufacturing.

The China plan will streng-then the company's manage-

ment so it can diversify over the next five years as well as move towards integrated sugar manufacturing.

Paper manufacturing gets the largest chunk of investment - Bt2.24 billion.

A plant is expected to be

completed next March with

an initial production capacity

of 60,000 tonnes of paper

made from bagasse, the pulp

left over from sugarcane crushing. Guangxi Nanning East Asia Paper Co Ltd, the wholly owned company set up to run the plant, is leasing 40 hectares of land from the Chinese government for 50 years.

Pairoj Arunpairo-jana, managing director of Mipeng, said the paper would be distributed via agents to Guangzhou province. The price of offset paper is US$700 (Bt26,300) per tonne, while bagasse costs only $30.

"We hope to break even in three to five years," he said.

This year the company

will open a Bt1-billion yeast factory.

The company will change

its focus from sugar business

to non-sugar ventures in order

to strengthen its competitive-

ness in the world market as

well as to reduce risk.

"Sugarcane has increased more than sugar production. So we are planning to boost our competitiveness by balancing our main businesses with more variety," Pairoj said.

From now to 2010, production will still be 90 per cent devoted to sugar.

After all new business are developed, the main sources of revenue will be energy and sugar, he said.

Allan Poh, managing director of Guangxi Qinzhou Zhong Tai Service Co, a joint venture with UST, an affiliate of logistics provider Ronggui Trading Co, said the company is planning to build revenue to Bt500 million in 2010 from Bt40 million last year, its first year of operation.

Poh said logistics services would play a key role among business in the next three years because the Chinese government has planned to develop logistics into the leading business of its country.

Mitr Phol has set up Guangxi Nanning East Asia Group as

its holding company to facili-

tate its investment plans in China. The group plans to increase

its total revenue by 15 per cent

this year from Bt20 billion last year.

After almost 14 years, Mipeng has become the second-largest sugar producer in China. The leader is Nan Hua, a domestic player.

Mipeng's five sugar mills in Guangxi produced 890,000 tonnes of sugar last year, which is more than what Mitr Phol produced in Thailand.

The company also plans to increase sugarcane yield in China from 11-12 tonnes per rai to 14 tonnes, compared with Thailand's seven tonnes.

Petchanet Pratraungkrai

The Nation