Banpu aims to boost sales in India, Philippines, Vietnam

Thailand?s coal company Banpu Pcl will focus more closely on India, the Philippines and Vietnam, where demand for coal is growing, Thai media reports said Monday.

The company operates five coal mines with annual production capacity of 30 million tons in Indonesia, the key source of its output to support coal demand in that nation and in other Asean countries, said chief executive officer Chanin Vongkusolkit as quoted by the Bangkok Post.com

Banpu's annual revenue from selling the coal it mines at the five Indonesian sites is US$2.3 billion-2.5 billion (Bt72 billion-Bt78.3 billion).

Chanin said India, the Philippines and Vietnam are interesting markets because they are undergoing reforms after suffering slowdowns in the past few years.

Banpu sells 3 million tons of coal a year to India and 2.3 million tons a year in the Philippines. Both countries are existing markets of Banpu.

The company is negotiating deals with electricity generators in Vietnam to supply coal over there, he said.

India imports 100 million tons of coal a year from Indonesia. Banpu expects India will increase the volume to 300 million tons in the near future to support its growing demand for electricity.

In the Philippines, Chanin noted that even though this country has many coal-fired power plants, the number is not sufficient for the long term, as the country's growth is accelerating after suffering a slowdown in the past few years. To support this rapid growth, the Philippines needs to import coal to produce electricity.

He said that Vietnam has become a focus for Banpu as its government has allowed coal imports to generate power in a bid to increase electricity revenue. The country is attempting to revive its economy after a period of downturn following overheating. To adjust electricity fees to support growth, Vietnam will have high demand for coal, Chanin said.

The three countries will be bright markets for Banpu aside from Indonesia, where the company now has coal reserves of 400 million tons.

The company will not yet inject new investment into its coal operations, as the concession term in Indonesia has 13 years left to go.

Coal sales in 10 countries account for 90 per cent of the firm's revenue, and the remaining 10 per cent is from the Thai market.

Chanin said that relying solely on coal is too risky. Therefore, it has to consider investment in renewable energy such as wind power. (*)