Thursday, March 15, 2018 Pattarapong Pongsawasdi Deputy Managing - - PowerPoint PPT Presentation

Digital Roadshow @ SET Thursday, March 15, 2018

Pattarapong Pongsawasdi Deputy Managing Director Buriram Sugar Plc. Email: pattarapong.pong@buriramsugar.com

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• I. BRR in Brief
• II. Operating Results – 2017
• III. Sugar Situations
• IV. Investment Update
• V. Q&A

AGENDA

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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 electricity demand with capacity of 9.9

• MW. It is now

selling electricity to BSF.

Electricity III (BPP)

By Product

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BRR in Brief

➢ Pioneer of sugar factory in the Northeast ➢ Exceptional sugarcane field management system ➢ The nation’s Third highest sugar yield at 120

kg/ton, national average at 106.92 (as of 14/03/18).

➢ Strong ties with 13,000 contracted sugarcane

growers

➢ Bio-Energy business development with growth

potential

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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 2,900,000 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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• I. BRR in Brief
• II. Operating Results – 2017
• III. Sugar Situations
• IV. Investment Update
• V. Q&A

AGENDA

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Unit: Million Baht

P/L STATEMENT ANALYSIS

• Revenue from sugar export rose by 37 % from 2.2 billion BT to

3.1 billion BT mainly from rising world sugar price during late 2016 to early 2017.

• Revenue from electricity sale rose by 28 % or 108 million BT

.

4,579 5,740 113 525

Revenue Net Profit

363%

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REVENUE BREAKDOWN

Unit: Million Baht

74.51% 73.01%

10.32% 12.27% 12.25% 11.14%

2.93% 3.58%

2016 2017

Sugar Electricity Fertilizer

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Revenue from sugar

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1,538 1,728 2,283 3,122

2016 2017

Domestic Sales Foreign Sales

60,161 MT 64,383 MT 186,227 MT 171,104 MT

Unit: Million Baht

Revenue from Electricity and Fertilizer

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529 815 154 230 50 100 150 200 250 200 400 600 800 1000 2016 2017

Electricity Performance

Revenue EBIT 628 740 83 99 60 80 100 120 550 600 650 700 750 2016 2017

Fertilizer Performance

Revenue EBIT

Unit: Million Baht

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AGENDA

• I. BRR in Brief
• II. Operating Results – 2017
• III. Sugar Situations
• IV. Investment Update
• V. Q&A

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1.85 1.95 2.06 2.25 2.9

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

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

▪As of March1, 2018, BRR has crushed 1.7 million MT of cane, producing 201,415 MT of sugar with the sugar yield of 118.46 kg/ton cane (The 3rd highest in the country).

BRR PRODUCTION

183,928 207,138 231,408 234,626 251,696 333,500 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 2,212,736 247,848 86,337 331,910 2017/18F 250,000 2,900,000 333,500 112,000 420,000 2018/19F 260,000 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

0% 20% 40% 60% 80% 100%

Retails Modern Trade

domestic sugar export sugar

32 % 68 %

MARKET SHARE

51.77% 17.57% 8.14% 5.98% 4.70% 11.83%

Export by Destinations

Indonesia (96,696.60 MT) Kenya (32,823.00 MT) China (15,205.00 MT) Tanzania (11,175.00 MT) Sri Lanka (8,775.00 MT) Others (22,088.70 MT)

A S I A A F R I C A O T H E R S 75.00 % 23.48 % 1.52%

Sugar Price : NY No. 11 (Mar 14, 2018)

Source: Barchart

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WORLD SUGAR SITUATION (1/2)

✓

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 above 110 million MT, mostly from acreage expansion.

✓

The Indian Sugar Mills Association (ISMA) revised its estimate for 2017/178 sugar production to 29.5 million MT, up from its earlier estimate

• f 26.1 million MT.

✓

Green Pool, a consulting company, forecasts Brazilian’s Center South region sugar output in 2018/19 at 32.7 million MT or 3.1 million MT lower than previous year due to the prospect of mills turning more cane (57.3% of the crop) into ethanol rather than sugar. Besides, ethanol use will also be supported by RenovaBio program, which is expected to come into force by 2020 and it will create a carbon credit scheme to increase the value of biofuels based on Brazil's commitments under the Paris climate change agreement. Brazil is the Third World's largest fuel consumer, and under the COP21 it has committed that by 2025 it will decrease its carbon emissions by 37%.

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

The International Sugar Organization raised its forecast for a projected global sugar surplus in 2017/18 (October/September) to 5.15 million MT, up from a previous forecast of 5.03 million MT. The upward revision was driven by lower than previously anticipated consumption of 173.55 million MT for 2017/18, down from a prior forecast of 174.41 million MT.



China’s 2017/18 production is expected at 10.2 million MT, rose from 9.3 million MT in 2016/17 mostly from acreage expansion. China’s import volume is expected around 5 million MT in 2018 and could go as high as 6.5 million MT in the next 5 years.



European Union’s sugar production is expected to reach 20.1 million MT in 2017/18 as beet 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 (2/2)

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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 17-18 Baht 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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• I. BRR in Brief
• II. Operating Results – 2017
• III. Sugar Situations
• IV. Investment Update
• V. Q&A

AGENDA

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✓ Refinery Project to be completed in

2018/19 crop year.

✓ Capacity: 1,000 tons/day ✓ Estimated cost: 400 Million THB ✓ Products:  Refined Sugar  White Sugar

Refinery Project

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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

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✓ Company: Sugarcane Ecoware Co., Ltd. ✓ Project: Produce bio-degradable packages from

bagasse

✓ Estimated investment Cost: 350 Million THB ✓ Current status & timing of project: 2018/19

Bio-Degradable Package Project

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 BRR is ready to bid for new VSPP power plants’

sale licenses upon having clear direction from Energy Regulation Commission (ERC).

 Number of Plants: Two (One new Plant)  Plant size: 9.9 MW, total 19.8 MW  Sale: 8 MW each  Estimated Investment Cost: 600 Million THB

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Co-generation Plants Project

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Two New Greenfield Licenses

1) Chamni Sugar Factory Co., Ltd. Crushing Capacity: 20,000 TCD Tambon Nongplong, Chamni District, Buriram Province 2) Buriram Sugar Public Company Limited Crushing Capacity: 20,000 TCD Tambon Nong Luang, Nonnarai District, Surin Province

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• I. BRR in Brief
• II. Operating Results – 2017
• III. Sugar Situations
• IV. Investment Update
• V. Q&A

AGENDA

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The views expressed here contain some information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. Any forward looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or forecast by Buriram Sugar Public Company Limited. Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction. For more information, please contact: ir@buriramsugar.com

DISCLAIMER