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- I. BRR in Brief
- II. Operating Results – Q2/2017
- III. Sugar Situations
- IV. Investment Update
- V. Q&A
Friday, September 1, 2017 ir@buriramsugar.com AGENDA I. BRR in - - PowerPoint PPT Presentation
Friday, September 1, 2017 ir@buriramsugar.com AGENDA I. BRR in - - PowerPoint PPT Presentation
Friday, September 1, 2017 ir@buriramsugar.com AGENDA I. BRR in Brief II. Operating Results Q2/2017 III. Sugar Situations IV. Investment Update V. Q&A Sugar ar Made de in the
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Company Structure
Sugar Mill (BSF)
▪ Establish in 1960, produce and sale raw and brown sugar both domestic and international with capacity 24,000 tons/day ▪ Its electricity capacity is 18 MW
Main Business
Buriram Sugar Public Company Limited (BRR)
▪ Establish in 1996, with the mission on research and development to improve sugarcane quality and productivity. Supporting Business
Sugarcane Development (BRD)
▪ Establish in 2005, produce and sale electricity from biomass power plants with capacity 9.9 MW ▪ Since Jun 2012, BEC sale electricity to Provincial Electricity Agency with maximize volume 8 MW
Electricity I (BEC)
▪ Establish in 2011, the 2nd electricity factory of BRR with capacity 9.9 MW ▪ COD on April 7,
- 2015. Sale 8 MW
electricity to Provincial Electricity Agency under FiT (Feed- in Tariff) system.
Electricity II (BPC)
▪ Establish on 2011, produce and sale fertilization with capacity 30,000 tons/year ▪ Licensed production and sale of organic fertilizer and
- rganic
chemical fertilizer
Fertilizer (KBF)
- Establish on
January 23, 2015 to support future third electricity
- project. The
construction of BRR 3rd electricity factory has started since May 16, 2015.
Electricity III (BPP)
By Product
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BRR in Brief
➢ Pioneer of sugar factory in the Northeast ➢ Exceptional sugarcane field management system ➢ Higher than average sugar yield 113.75 kg/ton
cane compared to the national average of 107.91 kg/ton for 2016/17
➢ Strong ties with 13,000 contracted sugarcane
growers
➢ Bio-Energy business development with growth
potential
3
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Cane fields within 40 km radius BRR in Brief
BSG 2016/17 2017/18
2017/18F 240,000 Rai of Acreage 2,800,000 Tons of Cane Crushed 2016/17A 184,831 Rai of Acreage 2,210,000 Tons of Cane Crushed
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Business Overview
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Sugarcane Processing in sugar mill 1 Ton
By-product Business Filter Cake Bagasse 250 -260 kg. 40-50 kg. Raw and brown sugar Main Business 105 – 118 kg. Molasses 40 – 45 kg. Electricity Business Fertilizer Business 111.6 - 116.1 kWh 30 - 35 kg.
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น ้ำตำลสร้ำงในไร่ Sugar
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- I. BRR in Brief
- II. Operating Results – Q2/2017
- III. Sugar Situations
- IV. Investment Update
- V. Q&A
AGENDA
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P/L STATEMENT ANALYSIS
2Q16 2Q17 1,208.86 2,001.61 41.54 266.09
Net Revenue Net Profit
Unit: Million Baht
+540% +66%
1H16 1H17
2,708.69 4,202.63 165.43 663.67
Net Revenue Net Profit
Unit: Million Baht
+301% +55%
According to the prolong drought from El Nino phenomenon in several major sugar production countries – India, China, Thailand, etc., the revenue from sugar export sale increased by 142% or 765 million Baht compared to 2Q16. Hence, the Company has recorded a revenue increase from a delivery of 75,900 ton of sugar
- r 39,900 tons higher than 2Q16.
The revenue from electricity sale in 2Q17 rose by 10 million Baht or equivalent to 10% compared to 2Q16 due to the increasing sale price of Buriram Energy Co., Ltd. (“BEC”) after changing the purchasing system from Adder to Feed-in Tariff (FiT).
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REVENUE BREAKDOWN QoQ
Unit: Million Baht
- 200.00
400.00 600.00 800.00 1,000.00 1,200.00 1,400.00 Others Molasses Electricity Fertilizer Domestic Sugar Export Sugar 117.22 97.75 124.27 316.36 541.70 48.88 88.20 107.43 129.73 284.28 1,304.80 2Q17 2Q16
+10%
14,467 Tons
75,926 Tons 39,895 Tons 23.67 KWt 25.85 KWt 19,978 Tons 29,114 Tons
+142%
- 10%
+4%
- 25%
Cane crushed in crop year of 2016/17 = 2.21 Metric Tons
16,612 Tons 14,467 Tons
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REVENUE BY BUSINESS QoQ
70-85% of total revenue was from sugar Revenue from export sugar sale was equivalent to 66% in 2Q17 or increased by 21% compare from better sale price of around 22 c/p compared to 15 – 16 c/p in 2Q16 Domestic sugar sales dropped by 13% due to lower demand during raining season Molasses mostly sold in 1Q17 and by 5% in 2Q17.
Domestic Sugar 27% Export Sugar 45% Molasses 10% Electricity 8% Fertilizer 10%
2Q16
Domestic Sugar 14% Export Sugar 66% Molasses 5% Electricity 5% Fertilizer 7% Others 3%
2Q17
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DELIVERY BY QUARTER
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AGENDA
- I. BRR in Brief
- II. Operating Results – Q2/2017
- III. Sugar Situations
- IV. Investment Update
- V. Q&A
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ar Made de in the Field 168,000 178,000 189,000 184,000 240,000
1.85 1.95 2.06 2.25 2.7
50,000 100,000 150,000 200,000 250,000 1.5 1.7 1.9 2.1 2.3 2.5 2.7 2.9 3.1
13/14 14/15 15/16 16/17 17/18f Acreage (rai) Cane (m mt)
11.01 10.96 10.90 12.17 13.35
10.2 10.7 11.2 11.7 12.2 12.7 13.2 13.7
13/14 14/15 15/16 16/17 17/18f
Yield (ton/rai)
CONTINUOUS GROWTH
ACREAGE / CANE CROP YIELD
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5 6 7 8 9 10 11 12 13 14 15 16 15/16 16/17 17/18 National Ave BRR 10.90 9.15 9.45 12.17 9.45 13.35 Ton/Rai
CANE YIELD DEVELOPMENT
BRR cane yield is above national average by 19%, 28% and 41% in three crop years respectively and expects to generate higher cane yield year over year.
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Note : * Estimate figure
Unit: Tons
▪Though affected by drought in 2015/16 crop year, Buriram managed to increase cane volume by 100,000 MT from 1.95 M MT to 2.06 M MT. ▪For 2016/17 crop, Buriram crushed 2.21 million tons of cane, producing 251,696 MT
- f sugar.
▪2.8 million tons of cane is expected to be crushed with the estimated 322,000 to 330,000 tons of sugar.
BRR PRODUCTION
183,928 207,138 231,408 234,626 251,696 322,000 87,525 75,980 79,061 94,013 86,337 112,000
Sugar Molasse
2012/13 2013/14 2014/15 2015/16 2016/17 2017/18
+12.62% +11.72% +1.39% +7.27% +27.93%
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Cane, Sugar, Molasses and Bagasse
Year Area (Rai) Cane Sugar* Molasses** Bagasse*** 2015/16 190,000 2,060,649 234,686 82,425 309,097 2016/17 200,000 2,212,736 251,696 86,337 331,910 2017/18F 280,000 2,800,000 322,000 112,000 420,000 2018/19F 300,000 3,000,000 345,000 120,000 450,000
Unit: Ton
Remark: *Sugar Yield @ 115 kg/ton cane **Molasses Yield @ 40 kg/ton cane ***Bagasse Yield @ 15 %of cane
BRR PRODUCTION
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TRADER
Agent
International Customers Destinations Domestic Customers Modern Trade
0% 20% 40% 60% 80% 100%
Retails Modern Trade
domestic sugar export sugar
25.5%
20 40 60 80 100
ASIA OT HERS
%
74.5%
MARKET SHARE
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Sugar Price : NY No. 11, Mar 2018 (Aug 31, 2017)
Source: Barchart
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Source: Barchart
18
Sugar Price : London No. 5, Mar 2018 (Aug 31, 2017)
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WORLD SUGAR SITUATION (1/3)
✓
Due to the drought in late 2015 and early 2016, Thailand cane volumes in 2016/17 crop year was 92.95 million MT, 105 million MT lower than the previous year. For 2017/18, Thai’s cane volume is expected to rise to 105 – 110 million MT due to acreage expansion.
✓
The Indian government estimated the sugar production for 2016/17 at 22.5 million MT, 10.3% lower than the previous crop from 25.1 million MT. While some analysts expected the volume may be lower than 20 MT. Analysts believed India is to import around 1 million MT to cover 26 million MT’s annual consumption. So far, duty free import stays at 500,000 MT.
✓
India's ICRA forecasts sugar production in the 2017-18 marketing year (October-September) to increase to 23.5 - 24.5 million mt, a 16%-20% increase year on year, the agency said in a report. Sugar
- utput is projected to increase based on higher production in
Maharashtra and Uttar Pradesh, India's top two sugar producing states.
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China’s 2016/17 production rose to 9.3 million MT from 88 million MT in 2015/16. However, production may be capped at around 10 million MT due to the expansion of other crops – mulberry, eucalyptus and citrus. China’s import volume could go as high as 6.5 million MT in the next 5 years.
Chinese government enforced safeguard measure - an additional tariff for volumes in excess of the current quota of 1.94 million MT. In the next 12 months, the tariff will be 95%, falling to 90% in the second year and ending 85% in the subsequent year. Until the application of this measure, the import tariff imposed outside the quota was 50%.According to the entity, in the 2016/2017 harvest, Brazil exported 2.14 million MT to China, with a forecast of 3 million in this harvest. China is also to cut in-quota import from 1.94 to 1 million MT. China is one of Brazil’s main destinations for sugar.
European Union’s sugar production is expected to reach 20 million MT in 2017/18 as planted area has increased by 13%. After the liberalization of sugar regime starting October 1, 2017, EU will play bigger role in global sugar trade.
WORLD SUGAR SITUATION (2/3)
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Sugar mills in drought-affected Tamil Nadu have demanded tariff- rate quota (TRQ) import of 0.6 million tonne of raw sugar at zero import duty to help minimize losses. Government official is reviewing the situation and may accept their demand, as it will not only help keep sugar prices in southern India under control but also enable sugar mills clear cane farmers' dues.
The Indian Sugar Mills Association (ISMA), which has more representation from mills in Uttar Pradesh, has been opposing imports, claiming that the country has enough stock
- f
the sweetener. However, South Indian Sugar Mills Association, Tamil Nadu (SISMA-TN) has approached the central government, requesting it to allow sugar import.
Brazil’s Chamber
- f
Foreign Trade (Camex) approved the implementation of a 20% tax on ethanol imported by Brazil. The tariff will be applied only to the volume of ethanol that exceeds 600 million liters per year.
WORLD SUGAR SITUATION (3/3)
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India 2017/18 Crop World Gasoline Price Funds in NY Market Indian Import Export of EU, Ukraine and Russia Brazil Weather for 2018 Crop China Import Consumption pattern
FACTORS TO WATCH
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ASEAN Economic Community (AEC)
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Info ASEAN Thailand Population 598 mln. 67 mln. Sugar production 17 mln.tons 10 mln.tons Sugar imports 5-6 mln.tons 0.0 mln.tons Sugar balance Net importers Net exporter
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ASEAN SUGAR TARIFF
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2014 Singapore 0% Thailand 0% Malaysia 0% Philippines Sensitive
- 2014 -10%, 2015 - 5%
Indonesia Highly sentitive
- 2014 - Raw 10%, Whites – 20%
- 2015 - Raw 5%, Whites 10%
Cambodia 5% Laos
- 2014 - Raw & Whites 5%
- 2015 - Raw & Whites 0%
Myanmar Sensitive
- 2015 - Raw & Whites 0-5%
Vietnam 5%
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Retail sugar prices in ASEAN: Thailand is the lowest
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Retail prices Thailand 23 Baht (0.6 USD) Laos 30-35 Baht Cambodia 30-35 Baht Vietnam 35-40 Baht Myanmar 30-35 Baht Indonesia 35-40 Baht Philippines 35-40 Baht
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ar Made de in the Field
- I. BRR in Brief
- II. Operating Results – Q2/2017
- III. Sugar Situations
- IV. Investment Update
- V. Q&A
AGENDA
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✓ Refinery Project to be completed in
2019/20
✓ Capacity: 1,000 – 1,200 tons/day ✓ Estimated cost: 1.4 – 1.5 billion THB ✓ Products: Super Refined Sugar Refined Sugar White Sugar
REFINERY PROJECT (UNDER STUDY)
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✓ Project: Produce ethanol by utilizing molasses ✓ Total investment Cost: N.A ✓ Rationale: ✓ Creation of additional revenue stream to BRR through
the sale of ethanol
✓ Current status & timing of project: 2019/20
ETHANOL PROJECT (UNDER STUDY)
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- I. BRR in Brief
- II. Operating Results – Q2/2017
- III. Sugar Situations
- IV. Investment Update
- V. Q&A
AGENDA
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