TPI Polene Power (TB:TPIPP) Set to Lead Electricity Production and Distribution Business

Monday, 17 April 2017, 22:00 HKT/SGT

-Expanded power facilities come on-line this Q4
-Poised to invest in efficient power production to support growth

BANGKOK, Apr 17, 2017 - (ACN Newswire) - TPI Polene Power or TPIPP, operator of Refuse-derived Fuel (RDF) and waste heat recovery power plants in Thailand, and operator of petrol and natural gas (NGV) service stations, aims to be the leader in the power production and distribution business. The company, now trading on the stock market, is in the middle of expanding three new power plants whose commercial operation date (COD) is set for the 4th quarter of this year, which will push production capacity to 440MW.

TPIPP is also planning to invest in increasing the power production performance of its waste heat recovery power plants and install waste separation equipment at its landfills. It is also preparing to buy 2 steam boilers as reserve for its RDF power plants, continuously supporting corporate growth.

Prachai Leophairatana, TPIPP Board Chairman, is confident that shares of the company, now being traded at the Stock Exchange of Thailand as 'TPIPP', will be well-received by investors after offering 2,500 million shares at an IPO price of 1 baht per share to select groups of shareholders of TPI Polene, and at 7 baht per share to the general public and institutional investors. The funds raised will be used to expand business, serve as working capital and pay outstanding debts.

TPIPP is operator of RDF power plants and the largest waste heat recovery power plants in Thailand, as well as petrol and natural gas (NGV) service stations. The Company has determined to operate its businesses according to the Zero Waste principle, as part of its effort to become leader in the production and distribution of electricity business. It seeks to do this by using clean renewable energy, makes its electricity production process efficient, observe good governance principles, and be responsible to society and the environment.

"We have the vision to lead the power production and distribution business by using renewable energy that is clean and efficient in our electricity production process. This will come from transforming garbage from communities and landfills into RDF fuels that yield high heat and can be used in the electricity production process. At the same time we stand by the Clean and Green Energy, Clean Up Country concept, which will help to greatly reduce the quantity of garbage each day," Mr Prachai said.

Pakorn Leopairut, TPIPP President, said the company has two major areas of business. The first area is the energy and public utility business such as RDF and waste heat recovery power plants. The company has 4 power plants with a combined production capacity of 150 MW. Two of them are RDF plants that produce 20 MW and 60 MW respectively, for a combined total of 80 MW, with the Electricity Generating Authority of Thailand (EGAT) buying 73 MW. The company will also receive an adder electricity purchase price of 3.50 baht per kilowatt-hour on top of basic electricity charge for 7 years from the date of electricity purchase.

TPIPP has two additional waste heat recovery power plants with capacities of 40 MW and 30 MW, and TPI Polene Pcl as the electricity buyer. Finally, TPIPP has an RDF power plant that uses garbage from communities and landfills for processing into refuse-derived fuel for use in the electricity production process. At present it can receive 4,000 tons per day of community waste to produce 2,000 tons of RDF a day.

The second area of TPIPP's business include its 12 petrol and NGV service stations under the trademark "TPIPL". The company also earns revenue from selling organic matter from its RDF plants to TPI Polene Bio Organic Co., Ltd., a subsidiary of TPI Polene Pcl, to use as raw material to produce organic fertilizer, probiotics for animal husbandry and removal of sewage in water.

The TPIPP President said the company is in the process of building three new power plants, all of whose CODs are in the 4th quarter of this year. This will increase the production capacity by another 290 MW for a total of 440 MW. The breakdown is as follow:

1. RDF plants will produce 70 MW when construction is complete, which together with the 30 MW to be produced by waste heat recovery power plants, will make a combined 100 MW of waste fuel energy that would be sold to EGAT.

2. The coal power plant produces 150 MW.

3. The 70 MW coal and RDF plant was designed to produce reserve electricity to feed either the 60 MW RDF plant, or the 70 MW RDF plant, when they have been stopped for maintenance, offering production and distribution security for EGAT. TPIPP is also expanding its RDF plant to increase its capacity for community garbage from 4,000 to 6,000 tons a day. This will increase its refuse-derived fuel production from 2,000 to 3,000 tons a day.

Furthermore, the company has plans to improve its current power plants, namely improving the waste heat recovery power plants to increase electricity production rates, and installing waste separation equipment for use at its landfills, which will help improve the quality of the garbage handed over to TPIPP. It is hoped that the two projects will be completed in the second quarter of this year. The company also plans to buy two steam boilers that use refuse-derived fuel, which will produce reserve power for the 60 MW and 70 MW RDF plants, when they will stop operation for maintenance. It is expected that they will be installed and begin operation in the first quarter of 2018.

Montree Sornpaisarn, Chief Executive Officer of Maybank Kim Eng Securities (Thailand) Plc, in his capacity as financial advisor and underwriter, said TPIPP shows good prospects for growth since it is in the process of expanding 3 more power plants. This will benefit future operations and the Thai government has a policy of supporting the production of electricity from renewable resources. It is an important part of the plan to develop electricity production capacity in the country and itplays an important role in reducing the import of energy - a national goal. Another supporting factor is the trend in demand for electricity between 2014 and 2036, which is projected to grow at an average rate of 2.7% per year.

Paiboon Nalinthrangkurn, Chief Executive Officer of TISCO Securities Co.,Ltd, in his capacity as underwriter said TPIPP's power plant operations are outstanding and have competitive advantage because of expertise in the management of garbage. The company has also been able to develop appropriate technology to separate waste in Thailand and can process it into RDF, which gives a high heat value that is fit for using as fuel in the electricity production process. Furthermore, TPIPP benefits from waste heat recovery in the cement production process and the distribution of electricity to TPI Polene Pcl, the parent company.

Suchai Sutasthumkul, Chief Executive Officer of CIMB Securities (Thailand) Co.,Ltd in his capacity as underwriter distribution manager and distributor, said that TPIPP is a company with good potential for growth since it has expertise in operating the RDF and waste heat recovery power plants. It also has good relations with the waste supplier network. In 2016, TPIPP's performance showed a dramatic increase in growth with a net profit of 1,824.25 million baht, an increase of 270% compared to the same period of the previous year, which registered a net profit of 493.36 million baht. It also has total revenue of 4,433.32 million baht, an increase of 58.62% compared to the same period of the previous year when it had total revenue of 2,794.83 million baht.

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Topic: IPO
Source: TPI Polene Power PCL
Sectors: Alternative Energy
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