Thai parties to produce wood pellets in Laos, eyeing Japan, Korea fuel markets

24, Sep. 2020

Image by Mrdidg from Pixabay
Image by Mrdidg from Pixabay

BANGKOK, NNA - Thailand’s energy producer Ratch Group PCL has entered a joint venture with two Thai partners to invest in wood pellet production in Laos.

They are targeting overseas markets like Japan and South Korea, where the demand for renewable energy sources such as biomass fuels is rising.

Ratch group’s wholly owned subsidiary Ratch-Lao Services Co. has partnered Buriram Green Energy Co. (BGE) and Siphandone Bolaven Development Co. (SPD) for the venture, according to Ratch filing to the Stock Exchange of Thailand on Monday.

They have set up Siphandone Ratch-Lao Co., with Buriram Green as the majority owner having 65 percent share while Ratch-Lao holds 25 percent and Siphandone Bolaven Development Co. taking the remaining 10 percent.

Kijja Sripatthangkura, CEO of Ratch group, said in a media statement that the company started a feasibility study in 2018 and developed this project with its partners because they saw a growth opportunity driven by a demand for renewable energy due to efforts to reduce fossil fuel consumption and greenhouse gases which have caused climate change.

He sees Japan and South Korea as key markets as their governments have a promotion policy for biomass power plants.

The new company aims to export the wood pellets to industrial customers in the two countries in long-term contracts currently under negotiation with prospective customers. The deals are expected to close soon, added Kijja.

The wood pellet plant will be built in Saysettha district in Laotian capital Vientaine, starting from March 2021. It hopes to roll out sales by Q1 2022 and produce 60,000 tons of wood pellets a year.

But first, the three parties will plant suitable, fast-growing crops such as sugarcane, said Kijja, who highlighted that his two partners have extensive experience in the agricultural sector.

He noted that demand for wood pellets has risen, mostly from industrial sectors and biomass-fired power plants. The raw materials have advantages like low moisture and high heating rate apart from being easy to transport and stock.

Ratch group currently operates biomass and biofuel businesses in Songkhla in southern Thailand. Its biomass company, Songkhla Biomass Co. generates 9,900 kilowatts of electricity by using rubber and wood as biofuels.

The company aims to further expand overseas, mainly focusing on fueling power plants, renewable projects as well as businesses related to electricity generation and energy, according to its filing statement.

So far, it has established power plant operations throughout Laos and also in countries like Myanmar and Cambodia.

Buriram Energy Co., wholly owned by the country’s sugar manufacturer Buriram Sugar PCL, currently operates biomass power plants fueled 100 percent by bagasse, the fibrous remains of sugarcane after it is crushed.