Thailand: BCP sets aside B15bn for capacity improvement

Thailand: BCP sets aside B15bn for capacity improvement

SET-listed and mostly state-owned Bangchak Corporation Plc (BCP), has
earmarked 15 billion baht of capital expenditure (capex) to be spent over
the next five years to improve its oil refining efficiency and capacity.

Of the total, around 10 billion baht would be spent increasing its refining
capacity to 130,000-135,000 barrels per day, up from the current 120,000
bpd, said vice-president and chief marketing officer Phongchai
Chaichirawiwat.

"We plan to break the bottlenecks that we've been struggling with for years.
Then we would be able to produce more products, such as benzene, to reduce
their imports," said Mr Phongchai.

He added the project is under Environmental Impact Assessment, as well
waiting for permission from related governmental agencies.

Mr Phongchai said BCP's total production comprises 20% benzene, 50% diesel,
10% jet fuel and the rest bunker oil.

For the second quarter of this year, BCP expects capacity production of
115,000 bpd, up from 110,000 bpd in the previous quarter.

Gross refining margin is expected to reach US$7 a barrel in the second
quarter, due to rising demand during the time that global oil price remained
low, thus attracting more motorists.

During March-April, the company's refining capacity reached a peak of of
121,000 bpd to meet rising demand.

For the whole of 2017, BCP expects its refining capacity to reach at an
average of 115,000 bpd, up from the previous forecast of 110,000 bpd, based
on global oil price standing at $50-$55 a barrel.

For the first five months of this year (January-May), Thailand's fuel demand
grew by 1.7%. With the company's oil retail business growing in the same
direction, it expects to acquire 15.2-15.3% of total market share.

BCP recently announced its plan to amalgamate with SET-listed Khon Kaen
Sugar Industry Plc (KSL), Thailand's fourth-largest sugar miller, to form a
new biofuel producing company. The move is aimed at capitalising on the
rising demand for biofuel along with the upward demand trend of alternative
renewables.

The amalgamation will be done through BCP's 99.99%-owned subsidiary BBP
Holding Co Ltd and Khon Kaen's 99.99%-owned subsidiary, KSLGI Co Ltd.

BCP and Khon Kaen Sugar are working on the legislative process and the
amalgamation is expected to complete by October.

BCP shares closed yesterday on the Stock Exchange of Thailand at 36 baht, 50
satang, in trade worth 156 million baht. KSL shares closed at 4.38 baht,
down eight satang, in trade worth 9.6 million baht.

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

Link to Original Article:
http://www.bangkokpost.com/business/news/1303319/bcp-sets-aside-b15bn-for-ca
pacity-improvement

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com