Gunkul Plans to Double Revenue on Renewable-Energy Power Plants

Gunkul Engineering Pcl (GUNKUL), a Thai power and engineering company, expects sales to more than double in the next three years as it steps up investment in renewable- energy plants.

Revenue may climb to about 9 billion baht ($286 million) by the end of 2015 from an estimated 4.3 billion baht this year, Managing Director Sopacha Dhumrongpiyawut said. The Bangkok- based company will spend more than 10 billion baht through 2013 on building and acquiring wind and solar power plants, she said.

Gunkul joins other Thai power companies such as Ratchaburi Electricity Generating Holding Pcl (RATCH) and Electricity Generating Pcl (EGCO) in expanding into renewable power projects as the government promotes the use of clean energy to cut reliance on natural gas. Thailand and Malaysia are among nations offering favorable project returns because of “generous” subsidies for renewable energy, Bloomberg New Energy Finance said in a February report.

“Wind and solar power industry in Thailand will continue its stellar growth with the government’s supporting policies,” Sopacha said in an interview yesterday. “Falling costs of renewable energy power equipment have also encouraged Thailand and neighboring countries to accelerate development of this facility.”

Gunkul plans to double the total generating capacity of its solar and wind power plants by the end of 2014 from about 100 megawatts at the end of this year, she said. The company wants to boost sales from its renewable-energy power plants to about half of total revenue from 30 percent, she said.

Thailand plans to boost power production from renewable energy to 6 percent of installed capacity in 2030 from about 1.4 percent in 2011, according the Energy Ministry’s website.

Myanmar Bidding

Gunkul is building a 60-megawatt wind plant in Nakhon Ratchasima province, 250 kilometers (155 miles) northeast of Bangkok, said Sopacha. It also operates solar plants with a capacity of 57 megawatts, she said. The power plants have contracts to sell electricity to the state-owned utilities.

“Gunkul is in the process of a radical transformation into power generation business from a supplier of power equipment,” said Songklod Wongchai, an analyst at Finansia Syrus Securities Pcl. (FSS) “That will be a positive step as the renewable-energy power business has more stable revenue and better margins with long-term sale contracts to the government.”

Gunkul is also seeking permission to build and operate new power plants in Myanmar, where it has done business for more than 15 years, said Sopacha, who just returned from Yangon this week. The company this year earned about 30 percent of its revenue from the sales of electricity transmission equipment in Myanmar, she said.

“We want to utilize our experience and knowledge of Myanmar to tap the vast potential of the power generation industry,” said Sopacha. “Myanmar will be a catalyst for Gunkul’s earnings growth over the next several years.”

To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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