RATCH: Seeking Raw Materials

The recent announcement of Ratch Group Public Company Limited (RATCH), one of Thailand’s largest power producers and operators, regarding the MOU signing with Sacksith Consulting & Trading Sole Co., Ltd. and the Government of Lao PDR in order to conduct a land survey and a feasibility study of industrial timber planting has somewhat surprised the market as RATCH was originally focused on fossil fuel power, coal-fired power and gas power, but now likely to expand its business biomass power.  

 

Affirming the shift from fossil fuel to alternative power following other power producers’ trend of transforming the core business to such as solar energy or wind energy, and for the case of RATCH to focus more on biomass.

 

In September, RATCH through its subsidiary Ratch-Lao Service Co., Ltd. has entered into a joint venture agreement with Buriram Green Energy Co., Ltd. (BGE) in Thailand and Siphandone Bolaven Development Co., Ltd. (SPD) in Lao PDR to establish  Iphandone-Ratch Lao Co., Ltd. to develop a wood pellet production and sale project with the production capacity of approx. 60,000 tons in Lao PDR.   

 

These 2 agreements implied the readiness of RATCH to penetrate the biomass market by seeking a raw material to support the production of power, along with significantly boosting up its revenue portfolio.   

  

Previously, BGSR Consortium which consists of BTS Group Holding Public Company Limited (BTS), Gulf Energy Development Public Company Limited (GULF), Engineering and Construction Public Company Limited (STEC) and RATCH has acquired the Operation and Maintenance (O&M) of Intercity Motorway Line 2.

 

Later RATCH teamed up with GULF to jointly invest and develop Hin Kong Power Plant in Ratchaburi and entered into a shareholders agreement with ALT Telecom Public Company Limited (ALT) to establish Smart Infranet Co., Ltd. (SIC) to seize telecommunications’ market.

 

In addition, RATCH has invested in Vietnam’s fund ABEIF in which as of now invests and develops 4 power plants including fossil fuel and renewable energy with a total capacity of 2,620MW.

 

Resulting RATCH to list as one of energy stocks with a solid fundamental.  

 

And do not forget, an average of dividend payment yield of RATCH is at 4-5%/year, it’s worth keeping in the portfolio.