Mr. Daechapon Lersuwanaroj, Managing Director of Ubon Bio Ethanol Public Company Limited (UBE), Thailand's large fully integrated producer and processor of tapioca, revealed that the Company has listed its shares for trading on the Stock Exchange of Thailand (SET) on September 30, 2021 under the category of "Resources (Energy and Utilities)" with the trading name "UBE". This is considered to be a very important step for the Company to strengthen the capital to support future business expansion through the capability of the Company and the business fundamentals of being the largest fully integrated tapioca producer and processor in the Lower Northeastern region, and being the country's leading production base of ethanol from tapioca. These facts are certain to help promote UBE to become the stocks that are enthusiastically received by investors who are interested to invest in sustainable stocks.
Following the listing on the SET, the Company's plan is to invest in the expansion of three businesses, namely, ethanol business, tapioca flour business and organic agriculture business. It is estimated that the investment from 2021 through 2024 will be approximately 1,000 million baht, apportioned into:
- Increasing the production of tapioca flour to 300 tons per day. The investment is expected to be approximately 300 million baht within 2022.
- Investing on the production line to produce organic sweetener such as syrup and Maltodextrin with the production capacity of 300 tons per day. The investment is expected to be approximately 300 million baht in 2022 to 2023.
- Investing in new machinery, such as tapioca grinding machines and tapioca starch extraction machines, to increase the efficiency of the tapioca starch production. The investment is expected to be approximately 100 million baht in 2022 to 2023.
- Investing in the expansion of production of fuel-grade ethanol to 40,000 liters per day through the de-bottlenecking capacity. The investment is expected to be approximately 50 million baht in 2023 to 2024, and,
- Investing in a factory to hull coffee sherries and roast organic coffee beans. The investment is expected to be approximately 100 million baht within 2022.
The Company aims to become a world leader in integrated organic agriculture with the strategy to focus on investments to raise the level to become a major player in the global Food Tech business through becoming the leading manufacturer and distributor of healthy food products in the country. The operation will be in parallel with the energy business to leverage sustainable and stable growth. During the next five years, UBE set a goal to maintain market share of the ethanol business by preserving cost advantage and creating added value for by-products arising from the production processes. As for the tapioca starch business, the Company will focus on growing organic tapioca starch, flour and other high-value organic products. Within five years, the Company plans to increase its EBITDA from tapioca starch and organic farming business from the current 27 percent to 70 percent of the total operating profit. As for the EBITDA from the ethanol business, the proportion is expected to decline from the current 73 percent to 30 percent, respectively.
Mrs. Rachada Klewpatinond, Executive Vice President of Asia Plus Advisory Company Limited, as the financial advisor, said that Ubon Bio Ethanol Plc. or UBE has shown outstanding growth potential from its business plan that focuses on adding value from agricultural raw materials comprehensively, promoting organic farming methods and to be environmentally friendly to facilitate sustainable development through the strength of being the world's largest producer and distributor of organic tapioca starch with high growth potential. UBE is one of a few producers in the world that has been certified organic in Thailand and internationally. As a result, the products can be exported to various countries around the world along, while the strategic factory locations make it possible to procure high quality raw materials to feed the production process throughout the year from a strong farmer network growing adequate raw materials to feed the production. The Company also forms an important foundation for the expansion of the future organic farming business.
In regard to the ethanol business, as the Company is the country's largest producer of ethanol from tapioca with strong business partnerships, it has been able to maintain market share sustainably with the production capacity of 146 million liters per year. The Company plans to preserve its strong cost advantage and maintain service standards that are superior to competitors. Also, additional investments will be made to continuously increase the efficiency of ethanol production. UBE has also expanded to develop other high-value agricultural products (HVP) with sales potential both domestically and internationally. The organic farming business will grow organic coffee and organic rice for sale, as well as will expand research and develop activities on agricultural products such as ready-mixed feed made from Napier grass for beef cattle. These activities are clear examples of how UBE differentiates itself from competitors within the same industry.
Source: MT Multimedia