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Published on January 23, 2008

Construction is slated to commence next year for completion in 2012. Following the operation, Dragon One expects revenue of Bt7 billion a year from the new business, surpassing that of its IT business, Dragon One CEO Jrarat Pingclasai said.

 Recently, the company signed a memorandum of understanding with the Krong Pailin administration in Cambodia to evaluate investment opportunities in the city. The businesses included design and development of a power plant and an industrial estate, establishment of an ethanol plant and a brewery, and the establishment of a railway line to support all of these projects.

Following the evaluation, Dragon One showed an interest in the development of a power plant and an industrial estate. The board of directors of Dragon One approved a resolution on January 15 to establish two subsidiaries - Dragon Power and Dragon Pailin - to pursue investment in Krong Pailin.

Dragon Power will develop a coal-fired power plant to supply no less than 200 megawatts to Cambodia and the east of Thailand. Dragon Pailin will invest in an industrial estate primarily for the manufacturers of electronic parts, textiles and footwear products.

Jrarat said the company needs about Bt25 billion to finance the power plant. In addition to the loan from the JBIC and foreign banks, the company would increase capital to finance the investment.

The company is now seeking a Thai co-investor who would help operate the power plant due to their own lack of experience in the area, Jrarat said. Meanwhile, it would also give an opportunity for a foreign investor who wants to co-invest in the project. The deals should be concluded in three months, he said.

Jrarat added that the company had recently purchased 600 rai of land from the Cambodian government for the power plant, large enough to house five power plants if future demand rises.

The company also plans to sell excess supply to the Electricity Generating Authority of Thailand.

"It is necessary to establish a new business for the company," Jrarat said. "We have secured a 25-year power supply contract from the Cambodian government. The break-even point of this business is seven to ten years after operation with an internal rate of return (IRR) at 10-15 per cent." 

Meanwhile, Jrarat said that the company will increase Dragon Pailin's registered capital from Bt5 million to Bt500 million in three months to finance the industrial estate development. Construction will start next year and the first phase will be operational in 2010.

Dragon Pailin has 12,000 rai of land, which can be divided into four or five phases. Each phase is expected to generate revenue of Bt2 billion a year, he said.

Nalin Viboonchart

The Nation