Bangchak Petroleum's strategy will continue to focus on green energy technology, including products and power plants for the next decade.
“Geothermal power is one of the green technologies that uses heat in the earth to produce electricity. This technology will suit a country that has heat inside the earth or a volcano. This does not match with Thailand’s geography. But we can invest in an Asean country such as Indonesia or the Philippines,” president Anusorn Sangnimnuan said during a site visit to the Mori Geothermal power plant in Hokkaido, Japan early this week.
Anusorn, whose term as president expires at the end of this month, said the company is studying alternative energy technology especially power plants because this is part of its strategy to balance its business portfolio in the long term.
Although the cost of geothermal power is still higher than from other types of power plants, the company is preparing for the future when the price of electricity rises to cover the cost.
The company has also invested in solar farms or Sunny Bangchak in upcountry Thailand such as Chaiyaphum, Buri Ram and Ayutthaya.
“We have to expand our new business to balance our portfolio from oil refinery and gas stations to ensure sustainable growth of our business in the long term,” he said
The company has set a capital expenditure budget of Bt15 billion for next year, of which Bt3 billion will go towards extending its retail network nationwide from 1,070 filling stations now, Bt6 billion to upgrading its refinery and the rest to building a solar power plant.
The capital expenditure budget will be financed from internal cash flow and debt – bank loans and debentures.
“We have room to increase our debt as our debt-to-equity ratio now is only 0.6 times, while we can cover debt-to-equity of 1,” he said.
The company targets earnings before interest, tax, depreciation and amortisation (EBITDA) of Bt7 billion this year after showing a net profit of Bt3.12 billion or Bt2.27 per share in the first nine months.
The launch of more gas stations will increase its share of overall retail petroleum sales from 14.7 per cent – third place in the market now – to 16 per cent or second in 2016.
The road map for five and 10 years from now will focus on green energy.
Next year will see new green oil products and an upgrade of its refinery to the Euro 5 standard, which will reduce passenger car emissions from 0.025 parts per million to 0.005pm. This will allow the company to sell premium products.
The company also is studying constructing a Bt24-billion second oil refinery rated at 150,000 barrels per day within four years in anticipation of expected demand in eight to 10 years.
Bangchak is projecting 2016 EBITDA at Bt13 billion.
Although Anusorn will leave his position at the end of this year, he believes that the road map for Bangchak will continue to be executed to help make the company the second petroleum firm of the country.
Since he became president in 2005, he has succeeded in restructuring the company’s debt and doubling its assets, sales and EBITDA from Bt34.37 billion, Bt79.84 billion and Bt1.91 billion respectively in 2004 to Bt67 billion, Bt170 billion and Bt7.3 billion respectively this year.