Dec. 5 (Bloomberg) -- Electric Power Development Co., Japan's biggest power wholesaler, aims to double profit from overseas plants in the next decade, taking advantage of rising demand in Asia and the U.S. The shares jumped to a record.

Electric Power, known as J-Power, plans to earn a pretax profit of 10 billion yen ($86.7 million) by March 2017 from electricity sales at plants in China, Southeast Asia and the U.S., President Yoshihiko Nakagaki said in an interview in Tokyo on Nov. 29. The company's foreign business will grow faster than Japanese sales, where demand is stagnant.

J-Power, Japan's biggest coal-power generator, is stepping up investment abroad to capture rising demand in China, Vietnam and Thailand, where economic growth is increasing electricity use. Utilities are building coal power stations after crude oil prices more than doubled since 2003, and J-Power aims to use its expertise in plants that cut pollution from burning the fuel.

``The overseas business will become the second pillar for our business,'' Nakagaki said. ``We can help countries build environment-friendly and efficient coal-power plants.''

J-Power will achieve its short-term target of boosting pretax profit from projects outside Japan to 5 billion yen within a year, he said. The company earned 2.1 billion yen from its overseas business in the six months ended Sept. 30.

Nakagaki said the company will increase pretax profit to 55 billion yen for the year ending March 2008, compared with a projected 52 billion yen for the year to March 2007.

Shares Jump

Shares of J-Power rose 5.1 percent to a record close of 5,120 yen on the Tokyo Stock Exchange today. The shares earlier gained as much as 5.8 percent, the biggest intraday gain since June 22, 2006. The stock, which started trading in Tokyo in October 2004, has risen 59 percent in the past year, more than the 4.6 percent gain in the benchmark Nikkei 225 Average.

J-Power has independent power projects, plants it owns and operates that sell electricity to local utilities, in Thailand, Taiwan, the Philippines and the U.S.

Asian countries such as China and Thailand want to increase coal-generated power after crude oil prices jumped to an all- time high of $78.40 a barrel on July 14. Coal demand in China, which holds the world's second-largest reserves, may rise 8.5 percent to 2.51 billion metric tons in 2007, according to China Economic Information Network, a government research center.

Thailand, Southeast Asia's second-biggest economy, on Nov. 8 announced plans to seek bids next year for power plants to produce 10,570 megawatts of electricity by 2015, and wants 40 percent generated from coal and 40 percent from gas. The kingdom currently generates more than 70 percent of its power using natural gas.

Thailand, Vietnam

``We would like to help Thailand diversify its portfolio for generating power,'' Nakagaki said. ``It's feasible to build new power plants that use imported coal from countries such as Australia and Indonesia.''

Vietnam is another target market, Nakagaki said. Electricity demand in Vietnam is expected to rise about 15 percent annually through the end of the decade, according to Electricity of Vietnam. The country's growth has exceeded 7 percent a year since 2002.

``We've been working in the U.S. to expand,'' Nakagaki said. ``The U.S. power demand is growing with steady economic expansion.''

J-Power acquired 49.9 percent stake in a U.S. power company, Elwood Energy LLC, which operates 1,350 megawatts of gas power plants, the company said on Nov. 30. It's the second U.S. project that J-Power has invested and boosted its overseas projects to 16, including one that's under construction.

Domestic Business

J-Power doesn't expect much growth in the domestic Japanese market, where the government projects demand will expand an average 1 percent a year until 2015.

J-Power set up a venture, Setouchi Power Co., with one of Japan's regional power utilities, Chugoku Electricity Co., to increase its share of Japan's 16 trillion-yen market electricity market. The government started liberalizing the market in 2000.

As the first step, Setouchi Power will sell about 40,000 kilowatts of electricity on Japan Electric Power Exchange in the end of December, Nakagaki said. The exchange was set up to allow power companies to sell to consumers anywhere in Japan, ending decades of monopolies by regional power companies.

Japan's government is trying to break up the 10 regional utilities' grip on prices in the electricity market, led by Tokyo Electric Power Co., the largest generator. Electricity prices in the world's second-biggest economy are more than double those in the U.S., France and South Korea.

The venture ``holds great potential,'' Nakagaki said. ``We formed the venture to deal with changes that are taking place in Japan's power market in future.''

Japan will start discussing next year whether to open up the market for consumers that use less than 50 kilowatts of electricity. About 60 percent of the nation's power market is now open to competition. Factories, government offices and supermarkets using more than 50 kilowatts of electricity have been able to choose their power supplier since March 2000.

To contact the reporter on this story: Megumi Yamanaka in Tokyo at myamanaka@bloomberg.net; Akira Matsui in Tokyo at akmatsui@bloomberg.net.

Last Updated: December 5, 2006 01:55 EST