|
SHAREINVESTOR Unique Mining Services Plc (UMS)imports coal from Indonesia for distribution to domesticindustries, mainly in Bangkok and nearby provinces. An affiliate ofThoresen Thai Agencies (TTA),its primary customer base is in foodand beverages, pulp and paper, and textiles.Coal imports aretailored to match the boiler engineering specifications of eachclient. To expand its customer base, UMS participates in coalprocurement auctions held by cement and power generation companies.Vichai Chuensuksawadi,director and acting managing director of UMS,discusses the company's strategy and outlook. What is UMS's business model? UMS is a coal logistics company. In simple terms we source coal,transport it to Thailand (often on Thoresen vessels),unload it atone of our two ports in Samut Sakhon and Ayutthaya and,finally,classify and distribute the coal to our customers accordingto their needs. We basically provide an end-to-end service withinternational import and domestic distribution. Where does UMS source its coal? We source primarily from a network of eight reliable suppliers inIndonesia who fall into two categories they are either mineoperators or traders such as Sojitz, Samsung and LG. We choseIndonesia because of abundant av BANGKOK POST Issued date 25 May 2012 ailability of coal, advantageous logistics costs and superior coalspecifications.For example, the ash content of coal from Indonesiais lower than that of coal from South Africa, and Thai industriestypically cannot burn very much ash. So, while we are open to sourcing from other countries, we have totake coal cost and specifications into consideration. What is the current capacity of UMS? Will you look to expand? We have two classification facilities one in Ayutthaya and one inSamut Sakhon. At each one we classify coal into the following sizes:0-5millimetres,10-20mm and 20-50mm. Our cumulative record highcapacity at both facilities is 6,500 tonnes a day. Normally we runat around 70% utilisation, so there is definitely room to grow.Currently, the Samut Sakhon facility is closed because of community[opposition] issues. This has been a challenge, but we have met theconditions required for environmental purposes and have fullpermission from authorities to transport coal from there.We expectto be able to begin full operations by August. In the meantime,weare in the process of looking for a backup site. Who are UMS's typical customers? Our customers are typically Thai SMEs as well as power plants andcement companies. Generally whenever one classifies coal,35-40%will be in the 0-5mm category and only major power plants andcement companies can use this because of how quickly it burns.Therest of the coal is distributed to SMEs in industries includingtextiles,pulp and paper, footwear or food and beverages. What separates UMS from its competitors? Supply security is a strong differentiator for us. Because we workwith reliable suppliers and use vessels for transport instead ofbarges, we are able to bring in 55,000 tonnes twice a monthconsistently. Our customers never have to worry about supply. We are also very process-driven something that can be attributed toTTA's management oversight. For example,because of highly focusedflood prevention measures, UMS's Ayutthaya plant escaped inundationand reported no damage last year. How does UMS view the demand for coal and other commodities inThailand and the region? Thailand has the lowest import volume of coal in Southeast Asia, aphenomenon I believe stems from the environmental disaster in MaeMoh with Egat's first coal-fired power plant. It used lignite, avery low-grade coal, and the necessary environmental controls werenot in place back then. Since then, coal hasn't been a popularsource of energy. But today, we are seeing fuel prices skyrocket. Gas is fairlylimited in Thailand and biofuel supplies are inconsistent.Nuclearhas also become a less popular option. So in our view, there islittle doubt that coal will grow in popularity as an increasinglyreliable and efficient source of energy. To ensure sustainable practices across the coal industry, thegovernment has put in place stricter regulations and controls. Weas operators, and more importantly as corporate citizens, likewisehave a responsibility to carry out our business in anenvironmentally conscious way. UMS's revenue and net profits have been declining since 2008. Whyis this? There were several factors, but the main cause has been a downturnin the cement industry in 2010 and 2011. This resulted in excessinventory of coal which we now have to sell at a discount. This inturn, puts a lot of pressure on our margins. We expect this tocontinue until the end of our fiscal year in September 2012. What are the biggest risks facing your business? The risks for UMS are the same as for everyone in this industry. Asa group,we have to reduce the environmental impact of ouroperations so that we can coexist with the communities in which weoperate. This is a priority for UMS and we are focusing a greatdeal of attention on the matter. How does being a part of TTA help UMS? Several synergies come with being a part of TTA. We now use groupcompanies for a number of functions that previously were sourcedexternally.Our broker is Thoresen Shipping &Logistics and weoften utilise its vessels to transport coal from Indonesia. Thiskind of support helps UMS to focus purely on sourcing coal anddistributing it in a speedy and efficient manner. What impact will the Asean Economic Community have on UMS'sbusiness? We are looking at the AEC as a positive development because TTA isalready a regional player. UMS has the potential to tap into thisnetwork and mimic our business model in other markets. For example,a TTA subsidiary has just received a coal trading licence inVietnam.With many industrial estates being developed across Vietnamnow, we expect there to be a significant number of light industriesthat will require coal. Where do you see UMS five years from now? Within five years, we will look to triple our volumes in Thailand.There are several other markets domestically that we are looking atexpanding into, and with small and independent power producerscontinuing to grow, we expect the demand for coal will continue toincrease. The Executive Q&A series is presented by ShareInvestor, Asia'sleading financial internet media and technology company and thelargest investor relations network in the region, with more than400 listed clients.This interview was conducted by Pon VanCompernolle, the editor of. For moreinformation, emailorhoward@shareinvestor.com or visit BANGKOK POST 25 May 2012. We are high quality suppliers, our products such as China Hydraulic Piston Pump , Linde Pumps for oversee buyer. To know more, please visits Rexroth Pumps.
Related Articles -
China Hydraulic Piston Pump, Linde Pumps,
|
