August 25, 2012 00:00
By Petchanet Pratruangkrai
Growth of the sugar industry from farm through end products has encouraged Thai Identity Sugar Group, known as KTIS, to raise funds on the Stock Exchange of Thailand for business expansion, focusing on producing sugar, paper pulp, ethanol and a 60,000-meg
However, the group declined to disclose more details on how it wants to mobilise funds from the SET, saying only that it would become a listed company soon and that Kasikorn Securities had been appointed as its financial adviser.
The company is pursuing this strategy not only to serve market expansion under the regional trade liberalisation coming in 2015 but also because the industry is growing quickly. The company has kept a close eye on sugar production in Asean in preparation for expanding into countries in the region.
To boost production, the company plans to the purchase 40 cane harvesters worth a total of Bt500 million from a major US-based agricultural-machine manufacturer. The investment will be a boon to its 50,000 contract farmers who work a total plantation area of 1 million rai (160,000 hectares), said Parphan Siriviriyakul, group chief executive officer.
KTIS has signed a partnership agreement with John Deere and TK Equipment, its local arm, to secure innovative agricultural machinery and enhanced access to growing and harvesting technologies for cane producers. This is part of the company’s policy to improve producers’ quality of life in a sustainable way, it says.
Parphan said the price of sugar cane was increasing in line with rising global demand. The company foresees that the growth of the industry will create attractive business opportunities. KTIS has strengthened Thailand’s cane and sugar industry by improving cane producers’ access to cultivation technology and increasing product quality through the use of innovative technologies and state-of-the-art processes, he said.
James Flood, sales and marketing director of John Deere Asia, said the Thai sugar industry had grown under the cooperation of the private sector and farmers. The company foresees business growth in the Asean region. It is conducting a study on investment opportunities for business expansion in Thailand and other countries in the region.
“Any time I see the opening of trade in goods and investment, it is a great opportunity for the company to grow and be more productive,” Flood said.
John Deere, a global company based in the US state of Illinois, is a leading supplier of cane harvesters in Thailand. It foresees that the government’s agricultural subsidy policy will increase its sales.
Krit Sajjaphanroj, managing director of TK Equipment, said Thai sugar growers would focus more on using machinery as labour costs rise amid a worker shortage. Its orders for sugar-cane tractors has exceeded this year’s target of 67 units, rising to 100, compared with 40 units last year. Although these machines cost Bt11.7 million each, orders continue to grow.