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The Company is one of the leading organizations that place importance on sustainable growth by aligning the strategies of the organization and TPI Polene Group with the Sustainable Development Goals (SDGs) in order to achieve sustainable growth in every dimension, including governance, environmental, and social aspects, based on good corporate governance (Environmental, Social, Governance: ESG). This approach aims to manage the business to benefit all stakeholder groups in a balanced way, while also reducing the impact of climate change.
Performance
In 2023, the Company and its subsidiaries had a total sales revenue of Baht 10,990 million, with earnings before interest, taxes, depreciation, and amortization (EBITDA) equal to Baht 4,835 million. The ratio of interest-bearing debt (net) to EBITDA was only 3.98 times (Net IBD/EBITDA).
The Company and its subsidiaries achieved a net profit of Baht 3,653 million in 2023, marking an increase of 29.88% compared to a net profit of Baht 2,813 million in 2022. This increase can be attributed to the rise in the Base tariff, which resulted from the increase in the FT Charge, offsetting the decrease in the Adder. Moreover, the electricity demand of cement factories increased by approximately 10-15% compared to 2021 and 2022, driven by higher production volumes in cement factories. Additionally, there was an increased demand for electricity from electric vehicles (EVs) within the TPI Polene Group's production system, totaling approximately 25 megawatts. Furthermore, boilers previously using coal have been upgraded to utilize municipal solid waste fuel instead, enabling the power plant to manage fuel costs more efficiently and reduce the cost of electricity production, thereby increasing the volume available for sale to cement factories. As a result, the volume of electricity sold to cement factories in 2023 is expected to grow by approximately 20% compared to 2022.
Power Purchase Agreement with PEA for Community Solid Waste Power Plant, Songkhla Province, for 7.92 Megawatts
The Company signed a non-firm Power Purchase Agreement (PPA) with a maximum production capacity of 7.92 megawatts for a period of 20 years with the Provincial Electricity Authority (PEA) on March 13, 2023, to sell electricity from the Community Solid Waste Power Plant in Songkhla Province. The Songkhla Provincial Administrative Organization (Songkhla PAO) announced the Company as the winner of the community solid waste power plant auction in March 2021, and the Company subsequently signed a solid waste concession contract with the Songkhla PAO in September 2021. Currently, the power plant is under construction and is expected to commence operations in 2026. The commencement of electricity production from this plant will not only enhance operating results but also contribute to the reduction of community solid waste nationwide, aligning with TPI Polene Group's carbon neutrality goal. The plant is projected to eliminate 400-500 tons of municipal solid waste per day. The solid waste disposal system and electricity generation will operate for 20 years, generating income from the sale of electricity based on the power purchase contract for 7.92 megawatts at a rate of Baht 5.78/unit for the initial 8 years and Baht 5.08 per unit for the subsequent 12 years.
Power Purchase Agreement with the Provincial Electricity Authority for an 8 MW Community Solid Waste Power Plant in Mukdahan Province.
The Company has been selected as the winner of the bid for the project to manage municipal solid waste and convert it into closed-system electricity for Mukdahan Municipality in Mukdahan Province. As of February 27, 2024, the Company has signed a non-firm Electricity Sales Contract (PPA) with an offering production capacity at a maximum of 8 Megawatts, valued at Baht 1,800 million. The agreement stipulates that at least 388 tons of solid waste must enter the project per day, with a total of a minimum of 400,000 tons of old solid waste throughout the 20-year operating period. During this period, the Company will manage the waste disposal system and generate electricity, earning income from the sale of electricity as per the Power Purchase Agreement. Specifically, the agreement entails selling 8 megawatts at a rate of Baht 5.78 per unit for the first 8 years and Baht 5.08 per unit for the subsequent 12 years. This project is expected to commence operations in 2026.
Installation of Artificial Intelligence (AI) Control for Grate Boilers
The Company prioritizes production innovation to enhance its competitiveness. On July 27, 2023, it entered into a contract for the installation of Artificial Intelligence (AI) Control for Grate Boilers, aiming to boost steam production capacity and consequently increase electricity output. Presently, the project is undergoing the process of seeking approval from the Board of Investment to qualify for a 3-year corporate income tax exemption equivalent to 50% of the investment, and is expected to commence operations in 2026.
Expansion of Clean Energy Production Capacity by Another 71.90 Megawatts, Totaling 511.90 megawatts in 2024
The Company is in the process of expanding the production capacity of the power plant by an additional 71.90 megawatts through the construction of a solar power plant. This plant comprises a 61.80 megawatt Solar Farm power plant and a 5.10 megawatt Solar Roof Top power plant, located in the cement factory and tile factory of TPI Polene Public Company Limited in Saraburi Province, resulting in a total installed capacity of 66.90 megawatts. Additionally, a 5-megawatt wind power plant has been built, bringing the total capacity to 71.90 megawatts. This capacity expansion is aimed at supplying electricity to the cement factory of TPI Polene Public Company Limited in 2024, thereby increasing the Company's installed electricity production capacity from 440 megawatts to 511.90 megawatts.
Achieving Corporate and Bond Ratings at “A-” (Single A Minus) with “Stable” Rating Outlook
The Company received a credit evaluation for both Corporate and Bond Ratings at 'A-' (Single A Minus) with the credit rating outlook deemed 'Stable,' and a Stand-alone Credit Profile rating from TRIS Rating Company Limited at the level of "a" (The Company's credit rating is capped at the level of its parent company, TPI Polene Public Company Limited, which has a credit rating of "A-/Stable.") The Company's Stand-alone Credit Profile rating reflects its stable cash flow from Power Purchase Agreements (PPAs) with the Electricity Generating Authority of Thailand (EGAT), as well as its competitive advantages in fuel and lower fuel costs resulting from a project to replace coal with municipal solid waste-derived fuel. The operating results of the Company's power plants are forecasted to lead to improved cash flow.
Reduction of Net Greenhouse Gas Emission and Creation of Opportunities in Selling Carbon Credits
The Company has a policy to reduce greenhouse gases, aiming to achieve carbon neutrality by 2037 through commitments to research and development. This involves introducing modern technology and innovation and continuously applying it in the electricity production process to reduce greenhouse gas emissions. This includes increasing the proportion of 100% renewable energy sourced from municipal solid waste or other alternative fuels, instead of relying on fossil fuels and coal in the Company's electricity production process. The Company emphasizes the use of clean energy, including solar energy and wind energy, and enhances the efficiency of electricity production to the highest and safest level, making it environmentally friendly. This is to reduce the impact of climate change and to transform the Company into a completely "CLEAN & GREEN POWER COMPANY," which creates opportunities to sell Carbon Credits in the future.
The Largest Community Solid Waste Disposal Plant in Thailand
In response to the government's intention to focus on solving the problem of overflowing solid waste in the city, along with the growth of the Company's solid waste power plant business, the Company has built a community waste disposal plant, which is the largest in Thailand. It is located in the same area to process all forms of solid waste, including community waste, old waste, industrial waste, and infectious waste, to be an alternative fuel that has little impact on the environment. As a result, the Company can reduce greenhouse gases towards the goal of carbon neutrality.
In 2023, the Company expanded its production capacity by constructing a fuel separation plant (Factory 3), which can increase production capacity by another 3,000 tons of municipal solid waste per day from the original production capacity of 9,000 tons per day. This brings the total capacity to receive 12,000 tons of municipal solid waste per day. The Company also invests in solid waste separation plants located in solid waste sources in various provinces, in collaboration with entrepreneurs contracted with the Company (outside Saraburi Province) such as Rayong, Chonburi, Ayutthaya, Pathum Thani, Ratchaburi, and Samut Sakhon, among others. These solid waste separation plants have a total waste disposal capacity of approximately 3,000 to 5,000 tons per day. This capacity enables the Company to receive community solid waste, which is then used to produce 15,000 tons of fuel per day, or 4,500,000 tons per year. This initiative supports the transition away from coal in all of the Company's power plants, which are slated to become entirely waste-fired by 2025.
Stepping into a Full-scale Clean and Green Energy Business Creating Carbon Credit Sales Opportunities
The Company has set a mission to grow steadily and sustainably in the clean and green energy business by participating in the bidding for various renewable energy power plant projects. The government will establish conditions for the private sector to participate in the selection process through bidding on power plants according to the country's Power Development Plan, as announced by the Energy Regulatory Commission regarding the procurement of renewable energy electricity from community solid waste, industrial waste, as well as green energy from solar and wind sources. These initiatives will create opportunities for the Company to sell Carbon Credits.
Development of Well-being of Communities, Quality of Society and Potential of Employees
In 2023, the Company carried out Corporate Social Responsibility (CSR) activities both within and outside the organization, considering economic, social, and environmental impacts, with the aim of benefiting stakeholders, including employees, customers, suppliers, competitors, communities, society, and the environment. These projects encompass various areas aimed at assisting society, with total expenses amounting to approximately Baht 48.55 million. They include: Providing scholarships to youths who excel academically and behaviorally but lack financial resources, Donating products from TPI Polene Group to improve and repair school buildings at 20 schools across the country; Offering assistance to flood victims and donating winter blankets to those affected by cold weather in various provinces; Providing construction materials to individuals in need of financial support; Co-hosting the Kathina ceremony at various temples; Supporting TPIPL drinking water for volunteer and beneficial activities.
These activities promote the well-being of the community and enhance the quality of society. Additionally, the Company has increased its efforts to encourage employees to participate in sustainable development by organizing projects such as reducing paper usage and reusing it in a meaningful way, collecting plastic bottles within the organization instead of disposing of them in community trash to reduce waste separation processes and use it as fuel in the Company's power plants, etc.
The Company places importance on developing the quality and potential of its employees by providing training to enhance knowledge and prepare them to address climate change problems. Additionally, it encourages employees to participate in creative thinking to develop innovations within the organization, such as improving the efficiency of the fuel feed unit of a municipal solid wast power plant. This fosters initiative and creates skills for work while emphasizing the impact on communities and the environment. These actions contribute to a sustainable organizational culture that can meet the expectations of external stakeholders, including customers, suppliers, competitors, society, and the environment.
Sustainability Management and Climate Change Management
In 2023, TPI Polene Group prepared a strategy and operated its business in accordance with the sustainability policy approved by the Board of Directors, encompassing sustainability issues which is the materiality for business operations across all three aspects: environmental, social, and economic, including good corporate governance. This policy serves as a tool to propel the organization toward achieving sustainability development goals. The issues approved by the Board of Directors were utilized in drafting the 2023 Sustainability Report, adhering to the standards of the Global Reporting Initiative (GRI).
In addition, the Company has participated in the climate management model project of the Stock Exchange of Thailand. It has disclosed financial information about climate according to the principles of TCFD (Task Force on Climate-related Financial Disclosures), which enhance the disclosure of financial information regarding climate management to stakeholders and investors, enabling them to be aware of the Company's business management practices, taking into account climate change as an important factor. The Company has assessed such risks, resulting in the need to allocate capital to adapt its technology to be more environmentally friendly by processing solid waste into fuel instead of coal in the electricity production process, as well as including the production of electricity from solar power, wind power, etc. Producing electricity from 100% renewable energy (Renewable Energy Power Plant) will enable the Company to earn a REC100 certificate and have an opportunity to sell Carbon Credits. The Company employs a low-carbon strategy to mitigate the risk of climate change, enabling it to achieve the goal of reducing greenhouse gas emissions.
There are also opportunities arising from the growth of electricity generation from renewable energy sources, which creates opportunities to sell Carbon Credits. This will generate income opportunities for the Company. Society will push for new businesses in infrastructure development, particularly in the charging infrastructure to support the increasing use of electric cars. This is a response to the climate change strategy that aims towards a low-carbon society, further promoting Smart Grid and Smart Cities.
Sustainability Development Performance
With determination and emphasis on work processes to foster sustainable growth, the Company received awards and certifications from recognized organizations in 2023. This achievement reflects its commitment to promoting sustainability and good corporate governance.
- Selected as one of the 100 listed companies with outstanding performance in environmental, social, and governance (ESG), or ESG100 Securities Group for the year 2023, for the fourth consecutive year (2018, 2021, 2022, and 2023), and recognized as a company worth investing in under the Resource Category, based on the evaluation by the Thaipat Institute.
- Received a SET ESG Rating of AA for the year 2023 from the Stock Exchange of Thailand in sustainability assessment, reflecting the business operations in Environmental, Social, and Governance (ESG) aspects, for the sustainable benefit of all stakeholders.
- Received a corporate governance assessment in the Corporate Governance Report of Thai Listed Companies (CGR) for the year 2023, achieving a 5-star rating or "Excellent" CG Scoring from the Thai Institute of Directors (IOD).
- Received the International Diamond Prize for Excellence in Quality 2023 from the European Society for Quality Research (ESQR), Switzerland, in acknowledgment of good business management practices, adherence to international standards, and modern technological innovations.
- Received the CSR Award at the global stage, namely the 3G Excellence Award in CSR Activities 2023, and the 3G Environmental Responsibility Award 2023 from the financial consulting company “Cambridge IFA International Financial Advisory” in the United Kingdom. The award serves to honor institutions that have successfully applied social responsibility considerations within their daily business practices.
On behalf of the Board of Directors of TPI Polene Power Public Company Limited, I would like to extend sincere gratitude to the Company’s shareholders, debenture holders, financial institutions, management, employees, and all other stakeholders who have supported and trusted the Company, enabling the Company to grow continuously and steadily in its business operations. This support serves as a driving force for all executives and employees to collaborate and dedicate their abilities to perform duties with honesty, achieve goals, and create sustainable stability for the organization. It contributes to the economic strength of the country, and benefits all shareholders and stakeholders, as well as Thai society as a whole, while continuously playing a role in driving Thai people toward living in a better and more sustainable environment.
Sincerely Yours,
Mr. Prachai Leopairatana
Chairman