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Published on March 25, 2008

Ube Group yesterday said it would invest Bt3.7 billion in Thailand to build two new plants and also expand its production capacity.

With more than Bt20 billion in assets and 550 employees in Thailand already, Ube - a subsidiary of Japan-based Ube Industries - plans to use the Kingdom as one of its three strategic bases for growth after Japan and Spain, CEO and president Charunya Phichitkul said.

It is planning to build an engineering nylon plant with an annual capacity of 50,000 tonnes. The product is mainly used in making auto-parts.

This project, which requires a Bt1.4-billion investment, would be completed in October next year.

Another project is to expand the production capacity of Caprolactum, an organic compound used for making nylon, from 110,000 tonnes to 130,000 tonnes a year.

It will spend about Bt800 million on this project, which is awaiting board approval, this year.

The expansion of Caprolactum production would boost the capacity of its co-product ammonium sulfate from 440,000 tonnes to 520,000 tonnes per year.

The new production is scheduled to begin in 2010.

It is also studying a plan to spend Bt1.5 billion to establish a new plant to produce a special chemical substance called 1-6 hexanediol, which is used as a mixture in colouring for automobiles.

"If we decide to invest in 1-6 hexanediol, it will be the first time this chemical is made here," he said.

It expects to start construction early next year and complete the project in 2011.

The plant will have a capacity of 6,000 tonnes per year.

He said this investment will increase value-added products to the group because it will use feedstock from the Caprolactum plants.

After the three projects are completed, it expects revenues to surge from Bt20 billion last year to Bt25 billion in 2010, he said.

This year it will maintain the operating profit and the revenue at the same level as last year.

Meanwhile, Ube (Thailand) has teamed up with Mitsubishi Corporation to develop the world's first project to reduce nitrous oxide gas, which is considered a greenhouse gas formed in the Caprolactum production process.

The project will require an investment of Bt120 million.

When completed, the project is expected to reduce nitrous oxide by 550 metric tonnes per year, which is equivalent to 170,000 metric tonnes of carbon dioxide.

It will complete the installation of machines and start trading carbon credits in the third quarter this year, said Charunya.

According to EMIT Environ-mental Brokers yesterday, carbon credit was posted at ¤21.97 per tonne. Based on this assumption, the company will generate ¤3.7 million (Bt180 million) a year.

About 60 per cent of the originated carbon credits will go to Mitsubishi.

Chalida Ekvitthayavechnukul

The Nation