Sakol Energy revises 2023 revenue forecast due to RDF delays

Sakol Energy (SKE), a firm involved in the trade of compressed natural gas and the operation of biomass power plants, adjusted its revenue expectations for 2023 owing to a delay in commencing operations at a new refuse-derived fuel (RDF) production facility.

The publicly traded company had earlier predicted a revenue leap to nearly 1 billion baht in 2023, a significant increase from the 497 million recorded in 2022. However, due to unexpected technical hitches that caused a delay in the RDF factory operations, SKE now anticipates a more modest 10% revenue growth for 2023.

The RDF facility in question, located in Saraburi’s Kaeng Khoi district, encountered technical issues that pushed back its full-fledged operations, initially slated to commence in early 2022.

The company now projects that commercial operations should be underway by the end of this year. The facility, which represents an investment of 400 million baht, boasts an annual production capacity of 200,000 tonnes of RDF.

SKE also operates another RDF production facility in Chon Buri, with an annual capacity of 80,000 tonnes.

Upon full operation of the new RDF factory, the organisation will have sufficient RDF to supply its principal customer, the publicly listed Siam Cement Group (SCG) – Thailand’s leading cement producer and industrial conglomerate, alongside other customers primarily operating power plants, reported Bangkok Post.

Agreement

A three-year agreement was inked in 2021 between SKE and SCI Eco Co, SCG’s waste management subsidiary. The deal involves the sale of 135,000 tonnes of RDF to SCI Eco by SKE. SCG’s commitment to slash carbon dioxide emissions, by transitioning from coal to waste-derived fuel in its cement production process, forms the backdrop of this agreement.

Jakkraphong Sumethchotimetha, SKE’s managing director, expressed confidence that the firm will have improved control over RDF production costs, following a governmental decision to decrease electricity prices from 4.45 baht per kilowatt-hour (unit) to 3.99 baht per unit.

This power tariff reduction will enable the company to cut production expenses by 13%, or approximately five baht per tonne of RDF.

In addition to its RDF facilities, SKE operates a 9.9-megawatt biomass power plant situated in the northern province of Phrae.

The company has also broadened its business scope by acquiring all shares in Vanta Capital, a firm specialising in securities trading software, for 43.5 million baht. Jakkraphong anticipates that this new business venture will begin yielding returns on investment by the third quarter of this year.

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