Thursday, December 18, 2008

Thailand's B. Grimm to build 500 megawatts of gas based power plants

B.Grimm plans B30bn investment

Six-year plan to focus on energy, health care

NAREERAT WIRIYAPONG

B.Grimm Group, the giant industrial conglomerate, is planning to spend 25 to 30 billion baht to expand its business over the next six years by focusing on the energy, cooling and health-care and lifestyle sectors.

Link: Major projects to be in 2010-14

Group chief executive Harald Link said the vast majority of the planned capital outlay would be allocated to the energy business.

Amata Power, B. Grimm's joint venture with the listed industrial estate developer Amata Corp and Japan's Sumitomo, would develop four more gas-based power plants with a combined capacity of 500 megawatts.

Three of the plants would be at Amata City and Amata Nakorn industrial estates while the other one would be built at Bangkadi Industrial Estate.

For the cooling system business, B. Grimm in March acquired shares of a cooling company as part of its four-billion-baht investment over the past 18 months for share acquisitions including energy-related ventures.

The company is making and distributing air-conditioners under licensing agreements with Carrier Corp.

"We will continue to expand the market by adding product lines, while looking for new opportunities," said Mr Link.

In health-care and lifestyle products, the distribution of beauty and fashion products would be its focus in addition to medical equipment.

"We've just concluded one joint venture in this business and are negotiating for another one," he said.

Part of the 30 billion baht worth of investment capital would come from bank loans with the balance its own capital.

"We have been in talks with local, German and Japanese banks. They are quite positive and interested in us. The energy business generally generates stable and predictable incomes," Mr Link said.

"Next year, we will start with a small budget but the major investments will be made between 2010 and 2014."

B. Grimm, which has been in Thailand for 130 years, expects total turnover of 18 billion baht this year, up nearly 15% from a year earlier.

The group's other businesses include transport, telecoms and property.

B. Grimm has co-invested with Siemens AG and Sino-Thai Engineering and Construction in the long-delayed 26-billion-baht airport rail link, which is set to be completed next year.

B. Grimm, through a joint venture, also produces three-wheel taxis, commonly known as tuks-tuks, under the Monika brand.

It is going to phase out from the construction business to simplify its business structure and concentrate on energy, cooling and health-care and lifestyle activities.

"I am trying to make the business less complex so it will be easy for the next generation to manage," Mr Link said, adding that he would hand over the business to his 26-year-old daughter in the next 10 years.

He said business next year would be tough for Thai companies but on the other hand they would benefit from falling oil and raw-material costs.

"Our clients have been affected by the global crisis," he said. "I think next year, everyone has to be alert and flexible to be ready to respond to what happens to the Thai economy and the world so you can react properly."

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