UMS to miss sales goal

UMS to miss sales goal

Ban on coal operations in Samut Sakhon 

Unique Mining Service Plc (UMS), Thailand's largest coal importer and distributor, expects its sales volume and revenue will fall short of targets this year as its coal operations in Samut Sakhon have been suspended due to anti-coal protests.

UMS’s operation in Samut Sakhon normally sells 50,000 to 60,000 tonnes of coal per month to customers in nearby provinces such as Nakhon Pathom, Ratchaburi and Kanchanaburi, says Pongrapee Kruechaem, deputy managing director. TAWATCHAI KEMGUMNERD

The SET-listed shipper Thoresen Thai Agencies (TTA), which controls 88% of MAI-listed UMS, said its projected sales volume of between 1.3 million and 1.5 million tonnes of coal for UMS in 2011 would not be achieved.

In the first six months, the company sold about 600,000 tonnes.

Although coal prices have risen substantially this year - to 2,500 to 3,000 baht per tonne at present - the revenue projection is unreasonable, said TTA president and chief executive ML Chandchutha Chandratat.

"UMS sales may top 1 million tonnes but are unlikely to reach 1.3 million tonnes as we targeted," he said. "Revenue is also significantly lower than our forecast."

UMS has total liabilities of around 2 billion baht, the majority of which are short-term loans with only 500-600 million baht in long-term debt. Short-term loans sought for working capital could be rolled over if needed.

UMS is among five coal companies ordered by Samut Sakhon governor Julapat Saengchan to suspend operations in the province since July 14, along with Asia Green Energy (AGE).

AGE, also listed on the Market for Alternative Investment, yesterday informed the stock exchange that the company had ceased all activities at its Samut Sakhon site. However, AGE is still running all operations at three other factories and warehouses in Phetchaburi, Chon Buri and Ayutthaya.

AGE has planned a new 600-million-baht coal plant in Samut Sakhon with operations slated to begin in 2012, but construction has not started.

Both UMS and AGE have appealed to the Samut Sakhon governor to reverse his suspension of all coal-related activities including at the port.

Environmental activist Thongnak Sawekchinda was murdered on July 28 in what some critics alleged was a response to his protest that led provincial authorities to suspend coal operations.

Pongrapee Kruechaem, the UMS deputy managing director, said the company's operation in Samut Sakhon normally sold 50,000 to 60,000 tonnes of coal per month to customers in nearby provinces such as Nakhon Pathom, Ratchaburi and Kanchanaburi.

Although most of the production has been moved from Samut Sakhon to another site in Ayutthaya, it has not totally offset the loss. UMS has an inventory of 420,000 tonnes plus another 16,500 tonnes of raw materials at the Samut Sakhon plant, he said.

ML Chandchutha said he was concerned about growing protests against coal operations but said the country depended on coal as a fuel with imports of over 10 million tonnes last year.

Numerous food factories in Samut Sakhon and nearby provinces such as those of Charoen Pokphand Foods, Thai Union Frozen Products, and Ajinomoto use coal to fuel boilers instead of fuel oil, even though it is less efficient and more polluting, he said.

Shares of UMS closed yesterday on the MAI at 15 baht, down 40 satang, in trade worth 241 million baht. AGE rose 50 satang to 28.75 baht with turnover of 132 million.