KBS sugar production income to drop 25-30%

‘‘ KBS expects sugar mill production this year will decrease to 180,000 tonnes. ISSARA TWILTERMSUP Executive director, KBS

SET-listed Khonburi Sugar Plc (KBS) expects revenue from sugar production to decrease by 25-30% this year from a total of 6.99 billion baht because of lower production output as a result of the drought.

The company expects sugar cane output for the 2020/2021 crop will be 1.7 million tonnes, lower than last year’s 3.37 million tonnes.

Issara Twiltermsup, executive director of KBS, said the effects of this year’s drought on sugar cane output are the worst in more than a decade.

“KBS expects sugar mill production this year will decrease to 180,000 tonnes from 370,000 tonnes in the 2019/2020 crop year ,” he said.

The company also expects Thailand’s sugar cane output in the 2019/2020 crop year to stand at 80 million tonnes, down from 131 million tonnes the previous crop year.

However, this year’s dry season has put pressure on global sugar cane prices, causing them to increase by around 15 cents per pound from 14.5 cents.

“The drought crisis also reduced sugar cane output and sugar mill exports, while pushing up global sugar prices, but Thailand’s sugar mill exports are still down compared to consumption in the global market,” said Mr Issara.

He said KBS plans to launch the Khonburi Sugar Power Plant Infrastructure Fund (KBSPIF) worth 2.8 billion baht to invest in a new sugar plant capable of producing 12,000 tonnes of sugar cane per day (1.2 million tonnes of sugar cane per year). The fund will also invest in a biomass power plant with a capacity of 18 megawatts located in Sikhio district, Nakhon Ratchasima.

“KBS expects the two new plants to start operation in December 2020,” said Mr Issara.

However, the Securities and Exchange Commission is still considering the roll-out of KBSPIF.

KBS has a biomass power plant with a total capacity of 73MW that sells 22MW of electricity to the staterun Electricity Generating Authority of Thailand and 16MW to the Provincial Electricity Authority.

KBS expects to spend an investment budget of 4 billion baht in 2020.