Message from President
In 2023, the Thai economy continues to recover from the outbreak of COVID-19, but is still affected by the conflict situation between Russia and Ukraine, conflict situation between Israel and Hamas, the number of tourists that has increased but has not yet reached the set target, including the drought crisis as a result of the El Niño phenomenon that have an impact on the rising price of agricultural products.
In the past year, the ethanol production and distribution business has been affected by the increasing cost of main raw materials in production i.e. molasses and cassava, and the government reducing subsidies for the use of E85 gasohol, resulting in a decrease in the demand for ethanol. On the other hand, the biodiesel production and distribution business’s demand has increased as the government announced an increase in biodiesel blending from B5 to B7. However, the average selling price of biodiesel decreases in line with the decreasing price of crude palm oil.
The Company has adjusted by focusing on production cost management, efficient production and distribution plans. In addition, according to the long-term investment strategy, the Company has expanded ethanol production capacity at Nam Phong branch by 200,000 liters per day, totaling 800,000 liters per day, to support the expansion of the use of biofuels by the Bangchak Group. Moreover, the Company has focused on investing in high-value businesses to become the leader in bio-manufacturing in accordance with the Bio-Circular-Green Economy Model (BCG Model) with additional investments as follows:
BSGF Company Limited is a joint venture of 3 companies i.e. (1) the Company, (2) Bangchak Corporation Public Company Limited, and (3) Thanachok Oil Light Company Limited to engage in the sustainable aviation fuel (SAF) production and distribution business. BSGF is the first company in Thailand that is a SAF production unit and the first and only unit produced from used cooking oil which is a raw material from used oil in the household and business sectors. The importance of SAF is that it helps reduce carbon dioxide emissions into the atmosphere.
BBGI Fermbox Company Limited is a joint venture between (1) the Company and (2) Fermbox Bio, a leading company in research and production of synthetic biology products by precision fermentation process from India. This joint venture will include the construction of the first commercial biotechnology factory (Contract Development and Manufacturing Organization: CDMO) in Thailand and Southeast Asia which will be established in Chachoengsao Province to be the base for the production of biological products (Biohub), the CDMO factory will initially produce enzymes and expand production to other synthetic biology products (Synbio). This investment is an investment that is in line with the government's promotion policy ( New S-Curve) and has the objective of improving the country's economy in agricultural and biotechnology industry development aspect in accordance with the Company's goals towards the high value biological products business.
The Company realizes the importance of creating business growth along with sustainable business operations and investments which places importance on the participation of all stakeholders in the environmental, social and corporate governance areas. In 2023, the Company's corporate credit rating was maintained at the level of "A-" with a "stable" credit rating outlook by TRIS Ratings, the Company also was certified as a member of the Thai Private Sector Coalition Against Corruption (CAC), was evaluated according to the CGR 2023 at the level of “Excellent”, and received the SET Awards 2023 in Sustainability Excellence award group. The Company believes that conducting business under social responsibility will benefit the public along with creating sustainable growth of the Company.
Finally, on behalf of the Company, I would like to thank the shareholders, business partners, trading partners, relevant government agencies, society and communities, etc., that have always supported business operations. The Company will continue to strive to increase its competitive potential, expand investment under a management system based on the principles of good governance and good corporate governance, grow sustainably along with society, community, and environment.
Mr. Pichai Chunhavajira
Chairman of the Board of Directors
December 31, 2023