KSL Expects 2025 Revenue to Exceed 19 Billion Baht, Claiming Fresh Cane Subsidies Not Cost-Effective for Farmers
Khon Kaen Sugar Industry Public Company Limited (KSL) launches a new plant, targeting 2025 Revenue to exceed 19 Billion Baht. Cane supply for 2024/25 season is expected to rise up to 23% thanks to rainfall and new plant capacity in Sa Kaeo Province. The company highlighted that fresh cane subsidies did not reflect farmers’ costs.
Mr. Chalush Chinthammit, KSL Group’s Director and Executive Director, revealed that, for the 2024/25 production season, domestic cane volume was expected to increase by 15-22%, or 95-100 million tons, compared to 82 million tons in the 2023/24 season. This growth is attributed to higher rainfall and an increase in the number of farmers planting cane.
However, KSL Group forecasts that cane extraction in the 2024/25 season would reach 6.75 million tons, a 23% increase from 5.4 million tons in the previous year. Expected revenue for 2025 is 19 billion baht, marking a 15% increase, driven by the factors mentioned above and the added production capacity from the startup of KSL Group’s new sugar mill in Sa Kaeo Province.
Global sugar prices for the 2024/25 season have a tendency to range from 18 to 20 cents per pound in the first half of the year, a 16% decrease from the previous year’s 24 to 26 cents per pound. This decline is attributed to a large stock of sugar in the global market and the strengthening of the US dollar, which has reached its highest level in two years.
Even so, in the second half of the year, positive factors may drive global sugar prices higher, including reduced sugar production in India and China at the start of the 2024/25 crushing season. KSL Group is also aware of environmental issues and is collaborating with the government to reduce the purchase of cane harvested through illegal burning, while continuously promoting the use of machinery for fresh cane harvesting.
In the 2024/25 cane extraction season, KSL Group reports that the average percentage of burnt cane across the group is 17.85% of the total 3.4 million tons of cane currently being extracted. This is within the Ministry of Industry’s limit of no more than 25%, in line with the government’s policy to reduce PM 2.5 dust levels during the harvesting season caused by burning.
While the government’s measures have contributed to mitigating PM 2.5 dust pollution and reducing its impact on the general population, it cannot be denied that these measures directly affect cane farmers, particularly in terms of increased harvesting costs.
The measure to increase the price of fresh cane by 120 baht per ton does not reflect the actual harvesting costs of fresh cane, which range from 200 to 250 baht per ton. In contrast, the harvesting cost for burnt cane is between 100 and 150 baht per ton. As a result, the goal of reducing the amount of burnt cane has not been fully achieved in all areas.
While the cane and sugar industry is often criticized for contributing to air pollution, the Carbon Credit Program from cane reveals that one-year-old cane can absorb up to 5,800 kilograms of carbon dioxide per 0.395-acre land. Even though the planting, fertilizing, harvesting, and transportation processes release 1,400 kilograms of carbon dioxide per 0.395-acre land, the cane still manages to absorb 4,400 kilograms of carbon dioxide per 0.395-acre land.
Fresh cane can absorb 4,400 kilograms of carbon per 0.395-acre land, while burnt cane releases an additional 3,850 kilograms of carbon dioxide per 0.395-acre land. Despite the emissions, it can still absorb 550 kilograms of carbon per 0.395-acre land. With Thailand cultivating 10 million rai of cane annually, this can absorb approximately 40 billion kilograms of carbon per year, which helps mitigate greenhouse gas emissions and reduce global warming.
For the 2024 fiscal year of Thailand, KSL Group reported total revenue of 16.44 billion baht, a decrease of 11% from the previous year’s 18.45 billion baht, due to the drought that reduced cane volumes. However, KSL Group achieved a net profit of 918 million baht, a 2% increase from the previous year’s 904 million baht. This was driven by high global sugar prices and a weakened baht exchange rate, allowing KSL Group to maintain profits like those of 2023.
In terms of electricity sales and related products from sugar production, KSL Group reported revenue of 1.5 billion baht for 2024, a decrease of 7% from the previous year’s 1.6 billion baht. This decline was due to the government’s reduction of the fuel adjustment charge (at the given time) or Ft rate, which is set to decrease further from January to April 2025, according to the Energy Regulatory Commission (ERC) resolution.
The announced reduction will not significantly impact KSL Group’s overall profit, as the majority of its revenue—80-90%—comes from its sugar business.
