Thoresen Thai Agencies (TTA), a leading SET-listed dry bulk carrier, is studying a possible investment in coal-fired power plants in Indonesia and the Philippines and a deep-sea port in Myanmar.
With a coal output of 4-5 million tonnes a year, TTA will be ready to operate power plants, said M.L. Chandchutha Chandratat, the president and chief executive. Under the current plan, TTA plans to produce 3 million tonnes of Indonesian coal and one million tonnes from the Philippines by 2014.
TTA and three partners have been awarded a concession for four coal exploration blocks covering 200,000 rai in Kalimantan, on Borneo.
The company is producing coal from its first mine in the Philippines and looking for a second mine there.
"We are considering investment in power plants near our mines in Indonesia and the Philippines so we don't have to spend a lot on logistics cost," said M.L. Chandchutha.On Cebu in the Philippines and Borneo in Indonesia, there are large-scale coal-fired power plants in operation, he acknowledged.Meanwhile, TTA has been invited by Premchai Karnasuta, chairman of Italian-Thai Development Plc, to co-invest in a deep-sea port in Dawei, Myanmar.
Thailand's largest construction firm by market value is seeking partners and mobilising at least US$12.5 billion this year to develop infrastructure on the coast of the neighbouring country."I agree there's a lot of potential in Myanmar and we are interested," said M.L. Chandchutha. "However, we need time to study the regulations there, as well as strategic partners who understand this business quite well." TTA owns a 20% share of Baria Serece, which operates the largest deep-water port in southern Vietnam.
M.L. Chandchutha said TTA plans to dilute its ownership in Unique Mining Services (UMS), a SET-listed coal importer and distributor, from 86% now. TTA acquired shares and warrants of UMS in late 2009 with a total investment of 3.9 billion baht at 23 baht per share. UMS shares now trade at 13-14 baht.
"We will consider reducing shares when the price improves, and we will still take control of more than 50% in the coal mine subsidiary, as TTA has a plan for long-term investment in energy," said M.L. Chandchutha.TTA has said that its core shipping business will bottom out this year as the new supply of ships eases from next year onwards.
In 2011, 70 million tonnes of vessels arrived on the market, denoting a 14% increase from the year before.
Supply is expected to rise by 10% or more this year, but the gloomy global economic outlook will continue to pressure the demand side. "We expect the Baltic Dry Index (BDI) to stay on par with last year's level or even worse," said M.L. Chandchutha. The BDI, a measure of shipping cost for dry-bulk commodities, just slipped below 1,000 points, compared with last year's low of 1,043.
"Our shipping business might be flat from last year or slightly drop, but it should gradually recover from this quarter onwards," he said.
Source: Bangkok Post