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RATCH Group injects 259 MB for capital increase of subsidiary in Laos to drive business expansion and committed projects; starting construction of wood pallet manufacturing facility, planning export to Japanese market in Q4 of 2022

Nonthaburi: RATCH Group Public Company Limited funded a 259-million baht for increasing registered capital of RATCH-Lao Service Company Limited (RL), its wholly owned subsidiary, with an aim to drive investment expansion in energy, infrastructure and other potential projects in Lao PDR. Accordingly, RL’s registered capital has increased from 78 million baht to 462 million baht, of which a paid-up registered capital is 337 million baht.

Mr. Kijja Sripatthangkura, CEO of RATCH Group Public Company Limited said that Lao PDR is considered as the company’s vital operational base where RL is in charge of seeking investment opportunity in the country. To date, RL’s investment in Lao PDR valued more than 1.2 billion baht including the investment 5.65% shares of EDL-Generation Public Company (EDL-Gen), 40% equity in Asia Water Co., Ltd., a tap water producer granted concession for water supply to Vientiane Metropolitan Waterworks Authority, and 25% stake in Siphandone RATCH-Lao Co., Ltd., operating wood pellet production and export to Japan. In addition, the company has ongoing studied and developed hydroelectric power plant, renewable power plant, biomass fuel and health care projects for further investment.

“Some amount of fund from the recapitalization will be invested in the committed projects including a construction of the wood pellet production plant located in Mounlapamok, Champasak province, and cultivating fast-growing trees in 30,000-rai concession area which is operated by Siphandone RATCH-Lao Co., Ltd, owned 25% stake by RATCH-Lao. The manufacturing facility with 100,000 tons per year capacity expects to be commercially operated in the fourth quarter of 2022. The whole wood pallets products by the plant will be sold to Kyuden Mirai Energy Co., Ltd., a subsidiary of Kyushu Electric Power Company Incorporated, in Japan under a 15-year purchase and sale agreement of 100,000 tons per year. Furthermore, RL has been finding negotiation with other Japanese industrial customers to serve its production expansion in Phase 2 planning in response to forecast of high demand for wood pellets in 2022-2042 growing by 8,000,000 tons per year corresponding by Japan’s renewable energy policy,” Mr. Kijja added.

Kyuden Mirai Energy Company Limited (KME) recently entered into a joint venture agreement with 20% stake in Siphandone RATCH-Lao Co., Ltd. and a 15-year purchase agreement for 100,000 tons per year of biomass wood pellet. KME as an Independent Power Producer in biomass power plants in Japan aims to become a responsible renewable power producer with “Biomass Resource Recycling Concept”.

Also, RATCH-Lao Service Co., Ltd. has planned to develop more wood pellet projects because not only its growth prospects is high, but also benefits for the environment due to less fossil fuel consumption leading to lessen impact from climate change. At present, the company has collaborated with Saksit Consulting and Trading Co., Ltd. and the Government of Lao PDR to study suitable areas and feasibility of industrial planting and the construction of a wood pellet production plant in Samua, Salavan province. The conclusion is expected by this year.

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