Lanna Resources to up coal production

The plan will be implemented next year.

Business-development director Sihasak Arirachakaran said the increased production would come from its Singlurus Pratama (SGP) and Lanna Harita Indonesia (LHI) mining subsidiaries in that country.

SGP, which Lanna just acquired in the third quarter, is not yet producing at full capacity, while LHI is producing at full capacity of 2 million tonnes annually.

Lanna's coal price will remain at $50 a tonne next year, the same as this year, due to fixed advance contracts. However, the company predicts the global coal price will rise next year.

The company will restart ethanol production by the end of this year once it secures enough molasses, the main raw material.

However, Lanna has projected a negative outlook for the overall ethanol industry next year, due to the high cost of molasses, which stems from a shortage, Sihasak said. The company has had no molasses stock since September.

The new production capacity of the company's second ethanol plant has not yet increased the plant's revenue contribution, and this will reduce the margin next year, from Bt5 to Bt7 a litre this year.

Sihasak said revenue and net profit would "skyrocket" in 2011 on the increased coal and ethanol production.

He said the company would enjoy an improved net profit next year, in the same proportion as this year, due mainly to annual coal production increasing from 2 million tonnes to 3.5 million.

Lanna achieved revenue of Bt7.5 billion last year for a net profit of Bt471 million. In the first nine months of this year, revenue was Bt3.9 billion for a net profit of Bt557 million.