President Chaiwat Kovavisarach told a news conference yesterday that Bangchak expected its power subsidiary BCPG to maintain its dividend contributions to the parent company even after it is spun off for listing on the Stock Exchange of Thailand in late September.

Nevertheless, he said Bangchak was searching for the “fourth engine” to drive its future growth, in addition to its three existing core businesses – oil refining, fuel marketing, and green power – which each |currently contribute roughly one-third |of the group’s EBITDA (earnings before |interest, taxes, depreciation and amortisation).

“Like the Boeing 747, we would like to have four engines,” he said.

The new business, which Bangchak hopes to have in place by the end of this year, will still be in the energy industry.

“Upstream is one choice,” Chaiwat said.

Bangchak has already jumped into the upstream oil and gas exploration business but that unit, Nido Petroleum, is in cost-reduction mode because of the slump in world oil prices.

Chaiwat said its oil-refining business would grow through its so-called 3E efficiency-improvement and “de-bottlenecking” projects, while its marketing business has a lot of room to grow further, from both its oil and non-oil divisions.

Bangchak reported EBITDA for the second quarter of Bt4.085 billion, down 21 per cent from a year ago.

EBITDA from its marketing business, however, totalled Bt882 million, growing |34 per cent from a year earlier. Chaiwat said BCPG was expected to raise between Bt5 billion and Bt6 billion from its initial public offering and as a result would have a total of Bt10 billion in funding, sufficient for expanding its power-generating capacity by 500 megawatts by 2020.

“BCPG currently has 118MW of solar-power capacity under its 10-year power-purchase contracts.

After that it will lose the adder [bonus rates given to solar farms by the state], which means a lot of income will be lost.

But if it can expand to 500-600MW, its income will be sustained,” he explained.

BCPG’s EBITDA currently amounts to Bt3 billion annually. After deducting expenses, it can pay dividends of about Bt1 billion to Bt2 billion annually. Chaiwat said Bangchak had managed to grow its fuel-marketing business from monthly sales volume of 220 million litres per month four years ago to 320 million litres at present, even with the same number of petrol stations, 1,075.

“What if we add 100-200 more pumps? And there is also the non-oil business,” which will be expanded, he said.

The company plans to set up the Bangchak Initiatives and Innovations Centre next year to spearhead its research and development drive, focusing on three areas: R&D on biofuels and energy-storage technology; collaborations with domestic and foreign organisations; and incubation.

Bangchak is maintaining its 2016 EBITDA target of Bt12.6 billion, although refining margin is considered a challenge in the second half.

Three brokerage houses – Maybank Kim Eng Securities (Thailand), Trinity Securities and DBS Vickers Securities (Thailand) – issued their stock-analysis reports yesterday, recommending “buy” on Bangchak stocks, citing its better-than-expected second-quarter results.

“Japan wants to export more raw materials and ingredients, particularly of high quality, for premium restaurants in Thailand. Meanwhile, demand for quality is expected to increase in the provinces,” Hiroki Mitsumata, president of Jetro Bangkok, said yesterday.

Jetro Bangkok conducted a survey on Japanese restaurants in Thailand. The data showed that the number of Japanese restaurants had increased by 3.6 per cent to 2,713 so far this year.

That was slower than the annual rate of 10-20 per cent seen in the past several years.

Last year, 297 outlets opened their doors while 193 closed because of high competition and internal financial problems and the economic slowdown in China.

Bangkok is now home to 1,753 Japanese restaurants, which represents minimal growth, but more are expected to open upcountry.

The survey showed that Japanese cuisine was the favourite foreign food in Thailand.

The Japanese government continues to increase food exports to overseas markets including Thailand as part of its economic recovery plans.

Japan will also expand sales channels for Japanese foods such as beef, grapes and wine at retail outlets such as Big C and Tesco Lotus, Jetro says.

Last year, Thailand imported more than Bt12 billion worth of Japanese food, but that is expected to multiply to more than Bt330 billion by 2020.

Yasumasa Asai, Thailand manager for Jetro’s Japanese Restaurants Abroad, said there were more than 120,000 foreign restaurants in Thailand.

Jetro Bangkok will soon certify Japanese restaurants and Japanese chefs to improve |their overall standards in Thailand.

Tarakorn Angpubate, chief executive officer and executive director of Food Capitals, the franchisee of Kyochon restaurants in Thailand, said the company planned to add at least 50 new outlets in Thailand over the next five years through its own investment and via franchising. Each Kyochon outlet will require between Bt8 million and Bt9 million of investment capital.

“We also have licences to operate Kyochon restaurants in Cambodia, Myanmar and Laos. We opened one branch in Phnom Penh last year through a joint venture with a local partner. We plan to open at least 25 branches in the three countries within five years, with the first branches in both Laos and Myanmar opening next year,” he said.

“In Thailand, we posted Kyochon sales worth Bt51 million last year. We expect the Kyochon business to grow by more than 100 per cent to about Bt110 million this year, driven by the addition of two more restaurant branches to a total of nine by the end of 2016,” Tarakorn said.

After operating the Kyochon business in Thailand for about four years, Food Capitals yesterday officially opened the seventh branch at CentralPlaza WestGate to tap target customers around the western suburb of Bangkok. The new branch features a new design concept for the first time in the world. It targets 2016 sales of Bt110 million.

Tarakorn said South Korean restaurants were quite popular among Thai consumers, who tend to eat out as it is more convenient and in line with their modern lifestyle.

Moreover, consumers today are looking for quality and good taste as well as being more health-conscious, which has led to estimated growth in the restaurant market of about 7 per cent this year, from Bt385 billion posted last year. The fried-chicken segment is worth about Bt17 billion and accounts for 4.4 per cent of the total restaurant market.

Besides the new CentralPlaza WestGate outlet, there are Kyochon restaurants at six locations in Bangkok: The Paseo Town Ramkhamhaeng, MBK Center, Centerpoint of Siam Square, Market Village Suvarnabhumi, Mega Bangna, and Fashion Island shopping complex.

Charoen Pokphand found itself on a list by the Business Competition Supervisory Commission (KPPU), along with 11 other chicken breeders suspected of engaging in a cartel. The company denied those allegations on Monday, saying the order to cull had come from the Agriculture Ministry.

“We were invited to attend a meeting [at the Agriculture Ministry] from 7-11pm on September 14, 2015. Prior to the meeting, we did not know the meeting’s agenda,” Charoen’s director Jemmy Wijaya said at the KPPU office on Monday.

He added the decision had come purely from the government, without any lobbying from the companies. He said the government had decided to cull the chicken because of persistent oversupply at the time, driving down the price at the expense of small and medium-scale breeders, which had complained to the ministry.

At the meeting, the companies had been prohibited from leaving without signing the agreement, Jemmy said.

The other companies on the list are PT Japfa Comfeed Indonesia, PT Malindo Feedmil Indonesia, PT Satwa Borneo, PT Wonokoyo Jaya Corp, PT CJ-PIA (Cheil Jedang Superfreed), PT Taat Indah Bersinar, PT Cibadak Indah Sari Farm, CV Missouri, PT Ekspravet Nasuba, PT Reza Perkasa and PT Hybro Indonesia.

TU’s consolidated sales reached a record high of Bt34.441 billion, up 9.3 per cent on the same period last year.

Earnings before interest, taxes, depreciation and amortisation was Bt3.181 billion, an increase of 11.9 per cent year on year, with the increase attributed to improved operations and lower finance costs because of continued debt repayments compared to the same period last year.

The operating profit was Bt2.062 billion, down 6.3 per cent year on year, while the gross profit improved 4.5 per cent and the gross profit margin was 15.8 per cent, down from 16.9 per cent in the second quarter 2015.

A rise in raw material costs, particularly in the salmon and shrimp businesses, contributed to the slightly weaker margin.

TU sales in the US played an important role in the company’s revenue, accounting for 38.6 per cent of total sales in the first half of the year.

Thailand’s domestic market accounted for 7.9 per cent of total sales, while the European Union contributed 34.1 per cent of sales, widening from 29.4 per cent in the full-year 2015. Japan sales contributed 6.1 per cent of total sales.

Thiraphong Chansiri, chief executive of TU noted: “This quarter clearly shows that our efforts to drive efficiency in our operations and financing are working. Profit growth is being delivered even in a challenging market for raw materials and difficult economic conditions in various markets around the world.”

The sales contribution from TU’s brands remained stable at 43 per cent in the first half of 2016, with the balance coming from the company’s private label sales.

The strong sales growth was due to the consolidation of Rugen Fisch into the TU family, higher Skipjack tuna prices and an increase in salmon raw material prices.

The baht’s depreciation against the US dollar and the Euro was an additional supporting factor.

The move is in line with Thai Beverage’s strategy to increase the revenue contribution from health beverages from 56 per cent last year to 70 per cent by 2021. Average investment per bottling plant will be Bt150 million.

The expansion is in response to greater demand for Crystal drinking water, which is 2 percentage points higher than the market average. Thailand’s total drinking-water market posted revenue of Bt34 billion last year, up 12 per cent over the previous year.

Sermsuk president Vivek Chhabra said Crystal drinking water had enjoyed impressive sales growth in the first half of 2016 as targeted, pushing its market share from 17 per cent at the end of last year to 17.4 per cent now.

Crystal is currently produced at 15 bottling facilities in the Kingdom, of which six belong to Sermsuk and the rest to its parent company Thai Beverage.

“We plan to set up at least one bottling facility for Crystal drinking water every year from next year to 2021 to serve greater demand for the product,” Chhabra said.

He added that production of Crystal drinking water was anticipated to increase significantly from 85 million cases last year to about 100 million this year, with up to 130 million cases targeted next year.

Sermsuk this year has invested Bt500 million in the opening of three Crystal bottling facilities in Ayutthaya, Surat Thani and Khon Kaen.

Chhabra said the company was looking into the strategic launch of health-drink products including mineral and alkaline water in the Thai market.

Sermsuk yesterday announced the “Crystal Everywhere” campaign with two strategies – to become Thailand’s No 1 drinking-water brand by expanding production to meet market demand for Crystal nationwide, in parallel with building on the “brand for me” concept.

“The Thai drinking-water market became increasingly competitive during the first half of 2016 as house brands entered the market,” Chhabra said. “At the same time, the pace of market growth slowed to 12 per cent, with a total market value of Bt34 billion. However, Crystal achieved its targeted sales, outperforming the market with 18-per-cent growth and boosting its market share to 17.4 per cent.

“This exceptional performance is the result of a combination of several key success factors, including the quality of Crystal drinking water, which has gained broad consumer acceptance nationwide; Sermsuk’s second-to-none, extensive distribution network that delivers products to consumers throughout Thailand faster and more efficiently; and the previous communications campaign under the concept ‘Same Things Could Be Different’ that sharpened Crystal’s brand identity as the quality drinking-water brand offering freshness.

“With our mission to strengthen Crystal as a spearhead brand to sustainably grow ThaiBev’s non-alcoholic-beverage portfolio to 70 per cent by 2021, and make Crystal Thailand’s No 1 drinking-water brand, we are expanding production to meet rising market demand for Crystal, especially in locations that have high growth potential.

“We recently opened a new production line in northeastern Thailand, and have set aside a Bt135-million budget for our next new production line in southern Thailand.

“In addition to ensuring sufficient product supplies nationwide, we are implementing the ‘Crystal Everywhere’ campaign to connect more tightly with the trendy lifestyles of today’s diverse consumers. We are confident that these two strategies will enhance Crystal’s brand leadership as the quality drinking water available to consumers any time and everywhere in Thailand,” he said.

Singha drinking water is now the leader of Thailand’s Bt34-billion drinking-water market, followed by Crystal and Nestle drinking water.

Sermsuk aims to make Crystal the market leader in five years.