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Gunkul eyes Thai, Myanmar power sectors

Gunkul Engineering plans to invest more than Bt12 billion over the next two years to develop wind-power plants in Thailand and gas-powered plants in Myanmar.

This is part of the company's strategy to transform itself from an importer and provider of electrical equipment into a power producer in Asean.

It aims to be producing at least 300 megawatts of electricity from both alternative energy and gas in Thailand and Myanmar by 2016, chairman Gunkul Dhumrongpiyawut told a news conference at its plant in Yangon this weekend.

The company is also looking into developing a solar power plant in Japan in a joint venture with Thailand's largest energy firm this year, who also plans to expand the investment in Japan too.

"We cannot reveal more details about the investment in Japan now but it will be finalised in the first half of this year," he said.

Up to 30 per cent of the two-year investment budget, or Bt3.6 billion, will come from the company's cash flow, and the other Bt8.4 billion from bank loans.

It may launch an infrastructure fund when the first phase of its wind-power project, which will have 60MW capacity, is completed this year.

Chief executive officer Sopacha Dhumrongpiyawut said: "We now have a debt-to-equity ratio of only 0.5:1, which gives us room to borrow from the banks to support our investment plan. Now the company has an agreement with the commercial banks that the company has to control its debt-to-equity ratio, [making sure that is] not over 3:1."

Managing director Somboon Aueatchasai added that the company would begin operating a 28MW solar plant this year.

Meanwhile, it will invest Bt4.4 billion on the 60MW first phase of its wind-power project, Bt1.2 billion from the company's cash flow, with the rest borrowed.

The second phase, also with 60MW capacity, will kick off next year under an investment of Bt4.4 billion, and another 60MW phase will be developed in 2016.

This project is being developed by Wind Energy Development Co, in which Gunkul Engineering holds a 70-per-cent stake.

This means Gunkul will have a 126MW share in the wind-power plant, or 70 per cent of total capacity.

Including the 28MW capacity of its solar plant, Gunkul will be producing a total of 154MW from alternative sources by 2016.

That year, it should also be producing 150MW in Myanmar both from gas and wind-power plants. The first project is a 51-per-cent joint venture with the operator of an electricity plant in Yangon that has acquired a private power purchase (PPP) agreement to provide 50MW to Myanmar's government. The plant began operating last year, producing 25MW.

For this deal, the company has set up a wholly owned subsidiary in Singapore, Gunkul Myanmar Power (Hlawga) Pte, to hold 51 per cent of the joint venture in Myanmar, whose investment budget is about US$9 million (Bt300 million).

The deal will be complete this quarter.

Gunkul Myanmar Power (Hlawga) will also hold at least 51 per cent in the next 25MW produced by the Myanmar firm under a PPP by the end of this year or in 2015.

Investment in further projects amounting to about 100MW, from both gas and wind power plant, in Myanmar is under study, Somboon said.

"Up to 50 per cent of our net profit will come from electricity plants by 2016," he said.

This year, the company is targeting growth in both revenue and net profit of up to 50 per cent compared with 2013 thanks to its solar plant starting operation and its backlog of other activities in Thailand worth Bt3.2 billion.

Up to 20 per cent of revenue will come from the solar plant, and the rest from its construction of electricity plants and providing equipment to its customer, Somboon said.

In 2012, the company reported revenue of Bt4.7 billion and net profit of Bt779.56 million, and in the first nine months of last year reported revenue of Bt2.4 billion and net profit of Bt746.17 million.


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