“Containers from Bagasse” in Production for 100 Million Baht Profit per Year
Buriram Sugar Public Company Limited (BRR) is going to produce containers made of bagasse in October. A new business line for more future profits, the product has been ordered in large number without any huge reserve expenses during in 3rd trimester of 2019. The company is expecting a profit as high as 100 million Thai Baht per year.
Mr. Anant Tangtongwechakit, BRR’s Chairperson of Executive Committee, said that, in terms of the project on bagasse-based containers on behalf of Sugarcane Ecoware Co., Ltd. (SEW), at present, a manufacturing factory is already launched. The factory is responsible for two jobs, the first of which is production of medical wares while the second of which concerns production of general food containers. The former began already in July and the latter is going to start next month.
Currently, BRR’s business trends in the 3rd trimester of 2019 tend to become positive. Compared with the ones in the 2nd trimester of 2019, the current trends are rising because, during the last trimester, the company lost around 42 million Thai Baht profit due to the fact that sugar order in the period was postponed for the present one.
At the same time, the sugar business has extra expenses regarding reserve funds for compensation according to the new Act of Labor of Thailand which requires compensation worth 400 days from the previous one of 300 days (In case employees have completed the work for at least 20 years). The number is regarded as very high.
However, if everything goes as planned, BRR will enjoy 100 million Thai Baht profit every year. This is another factor to help alleviate fluctuation of sugar business principally based on the price of world market. In terms of sugar refinery with capacity of around 100,000 tons daily to add more value of sugar products, the factory’s construction is already completed. It is expected to start functioning from May, 2019, and more income will be earned in the rest of the year.
Regarding the price of sugar in world market, it is still staggering at between 11 and 12 cents per pound. Due to the large amount of sugar exported from India, the sugar price does not change much. Nevertheless, the said price is still profitable.
The current Thai Baht as high as around 30.64 US Dollars (as of 30 August 2019 according to the Bank of Thailand) is considered by BRR as negative for business. Initially, the company already applied for risk insurance on currency exchanges in advance to solve problem in the future although it is now at the manageable level to conduct business.
Finally, in terms of business on biomass electricity generation, 3 electricity generation plants are functioning. Each of them has capacity of producing 9.9 Megawatts of electricity. The first two plants produce electricity for the Provincial Electricity Authority (PEA) while the third is still under discussion with the PEA for additional supply. As BRR is fully available for biomass electricity generation, the initial product from the third plant will be used in sugar production.
