The Company has established business plan and investment strategy by following diversification strategy guidelines; nonetheless such development or investment shall be under prudent and careful consideration with appropriate diversification of risks, in order for the Company to develop with quality, stability and sustainability in long term. In addition, the Company places importance on business operations with good corporate governance with social and environment responsibility. Currently, the Company’s core business is in the coal business, having two existing coal mining concessions in Indonesia and has recently invested in the third coal mining concession in 2021, in which the concession period of these three coal mines shall last for than 10 years with large amount of good quality coal reserves that can earn revenues and income continuously for a long time into the future. Nonetheless, current global trend has negative view on fossil fuels, namely oil, natural gas and coal, which are regarded as important factor for creating greenhouse gases, which cause global warming condition, seriously impacting climate conditions, by which there have been attempts to reduce and replace fossil fuels with renewable energy. However, in reality, fossil fuels are currently still the main energy sources and there are still a lot of limitations for switching to alternative energy or renewable energy for the main energy sources. Thus, fossil fuels remain necessary during this transitional period, including coal, which is still required for electricity generation and industrial process, especially with higher demand from countries in the Asia Region, albeit with declining rate of demand in the future. In any case, the Company, with knowledge and expertise in the coal business, is still looking for more investment opportunities in coal concessions in Indonesia in order to compensate for the reduction in coal reserves resulted from continuous production and distribution of coal every year.
The Company realizes about the climate change issues and places importance on the effective utilization of resources by giving priority to environmental care and endeavor, to develop and achieve Company’s goal toward carbon neutrality in the near future. The Company has established plan to create balances in its investments by focusing on future investments in the clean or renewable energy businesses, which are environmental friendly and have continued to expand; for instance, projects involving solar energy, wind energy, hydro energy and biomass energy, etc. Especially at present, the government sector has encouraged and increased its support for renewable and clean energy projects. Accordingly, the Company is looking for business opportunities or investment channels in order to achieve another round of business growth or a new s-curve by trying to think outside the box from previous energy business development concept, being more creative in order to develop a new business, which is non-coal, albeit without knowledge or expertise in such business. Such investment can be undertaken through business takeover, merger and acquisition or joint venture partnership deal, etc. The objective is to find opportunity or channel for investment in the other business to supplement revenues and income from the Company’s existing coal business and ethanol business, which should contribute to Company’s growth with stability, quality and sustainability in long term according to established guidelines and objectives.
RENEWABLE ENERGY BUSINESS ACTIVITIES
Lanna Power Generation Co., Ltd. (“LPG”), a subsidiary registered in Thailand in 2016, in which Lanna Resources Public Co., Ltd. directly holds 99.99985 percent of the paid-up capital, was established with the objectives of studying and preparing for investments in renewable energy businesses, both domestically and internationally. This includes biomass energy projects, electricity generation from biomass fuels, as well as investments in and development of other energy businesses, such as solar energy, wind energy, electric vehicle (“EV”) charging stations, and other related projects, all of which are expected to generate additional revenue and profit for the Company in the future. In 2024, LPG has invested in a ground-mounted solar farm project with a capacity of 1.20 megawatts to generate and supply electricity to the plant of Thai Agro Energy Public Company Limited (“TAE”), a subsidiary of the Company, under a 15-year Private Power Purchase Agreement (Private PPA), which is scheduled to commence commercial electricity supply by April 2025.
SRT Power Pellet Co., Ltd. (“SRT”), a subsidiary registered in Thailand, in which Lanna Power Generation Co., Ltd. (“LPG”), a subsidiary of the Company, acquired ordinary shares and preferred shares in SRT, holding 99.9998 percent of the paid-up capital, engaged in the commercial production and distribution of wood pellets. SRT’s manufacturing plant was located in Khian Sa District, Surat Thani Province, with a production capacity of 60,000 metric tons per year. The main raw material consisted of agricultural residues, such as wood chips, wood slabs from furniture industry, and rubber wood roots, being fed through production process and compressed into wood pellets, which are suitable for use as fuel in boilers and furnaces for electricity generation, steam production, and various industrial applications. During 2020-2021, SRT was adversely affected by the COVID-19 pandemic, as the decline in furniture exports led to shortages of wood raw materials, which are the main raw material for wood pellet production. Consequently, raw material prices increased significantly, impacting SRT’s operations and resulting in a net loss. As a result, the Company decided to restructure its investment in SRT by having SRT transfer its business to LPG, and SRT will proceed to register the dissolution and liquidation after completing the business transfer to LPG. LPG will explore the feasibility of producing biomass fuel from alternative raw materials for further distribution to customers. On July 20, 2023, the Extraordinary General Meeting of SRT’s shareholders unanimously approved the dissolution of SRT which was officially registered on the same day. SRT is currently undergoing the liquidation process.
