President and chief executive Wanchai Lawatanatrakul told The Nation that water reserves at Chon Buri and in Rayong province now total 502.71 million cubic metres, and that was well in excess of what is needed.

Water demand from both industrial and household users in the Eastern Seaboard averages 20 million cubic metres a month.

"We started the construction of a pipeline linking Klong Yai reservoir to our water system, and a pipeline linking the Phra Sa reservoir to our water system in 2005 after the water-shortage problem. That system was completed last year, and is ready to support our water supplies to both industries and household users this year," he said. East Water also has plans to spend Bt5 billion over the next five years to build pipelines linking other reservoirs, purchased from private owners last year, into its system to provide adequate supplies up to the year 2012.

"We have to invest to secure water supplies in this area to support industrial expansion - especially the third wave of the petrochemical industry," he said.

The company also plans to build a 50-megawatt electricity generating plant in Rayong province to help reduce its operating costs. At present, up to 40 per cent of its costs come from electricity bills.

Half of its investment budget will come from cash-flow and the rest from borrowing, either from banks or bond issues.

East Water is also studying proposals to lay pipelines from Chanthaburi province to Rayong and from Bang Pakong in Chachoengsao province to Bang Phra in Chon Buri province. It is also studying the production of freshwater from seawater.

While looking for future water supplies, East Water is also planning to restructure its businesses to refocus on its core business.

East Water currently has four businesses: supplying unrefined water, operated by East Water; supplying tap water, operated by its subsidiary Universal Utilities; drinking water vending machines, operated by another subsidiary, Global Water; and manufacturing centrifugally-cast fibreglass-reinforced polyester pipes. This is a joint venture called Eastern Hobas Pipes, between East Water and Hobas Engineering GmbH, of Austria.

Wanchai said the company's core business was supplying unrefined water and tap-water. It planned to withdraw from its two non-core businesses - drinking water vending machines and making pipes.

It plans to sell its 50-per-cent stake in Eastern Hobas Pipes to other investors.

"When we move away from non-core business, we will have an investment budget sufficient for core business expansion," Wanchai said.

Currently, 70 per cent of the company's revenue comes from unrefined water, 20 per cent from tap-water, and the remaining 10 per cent from drinking water and pipes.

East Water's total revenue for its fiscal year from October 2005 to September 2006 was Bt2.4 billion and its net profit Bt507.8 million. These figures were up by 15 per cent and 0.2 per cent, respectively, over the previous fiscal year.

The company announced total revenues of Bt583.34 million and net profit of Bt120.57 million from the first quarter of the current fiscal year.

Chalida Ekvitthayavechnukul,

Somluck Srimalee

The Nation