In 2016, it could be said that the country faced numerous changes and fluctuation situations both on economic and political aspects and for global economic conditions, the remaining low level of crude oil prices evidently slowdown economic conditions in many countries including Thailand. UAC Global Public Company Limited and its subsidiaries have also been impacted by such stagnation, in terms of reduction of revenues and slowdown in energy project investments as there are various factors that need to be carefully considered by taking into consideration the maximum interest of the shareholders.
Nonetheless, the Company still determines to create sustainable and continual values to the business by developing and keeping the strategic plans in line with the consequent. At the same time, the Company still adheres to existing vision and mission to be the operator of clean energy, petrochemicals and utilities which are social and environmental friendly, as well as to take responsibility to the shareholders and all groups of stakeholders, i.e. employees, business partners and relevant communities by observing good governance principles on equitable treatment and anti-corruption. Such determination has been evidenced from being considered to participate in the projects of the Stock Exchange of Thailand, such as Corporate Sustainability Advisory Program, Class 2 and Innovation Capability Promotion of the Listed Companies Program. Consequently, in 2016 the Company received “Sustainable Share” awards or “Thailand Sustainability Investment : THSI” Awards and “Total Innovation Management Award”, from presentation of the research and development work on chemical products of UAC Advance Polymer Company Limited (UAPC), a subsidiary whose 100% of its shares held by the Company.
For operating results in 2016, revenues from sales and services of Trading Business, the Company’s core business, was at Baht 823.43 million which was lower than the previous year, due to the slowdown of domestic and global economic conditions coupled with the reduction of investments from public and private sectors. On the contrary, revenues from renewable and alternatives energy business of the Company and its subsidiaries have increased by Baht 101.30 million when compared with the previous year. This was the result from investment in gas pipeline construction from Sao Sathien Oil Well to the Petroleum Production Plant (PPP) to increase feedstock for production pursuant to the designed generating capacity. Hence, gross profit margin in 2016 increased to 21.38 percent from 17.42 percent in 2015. Furthermore, revenues of UAC Advance Polymer and Chemicals Company limited (UAPC), which generates and supplies chemical products, have increased by Baht 88.17 million, when compared with the past year. Such increase was attributable to the expansion of market shares by development of new products, expansion to new customer groups as well as jointly development of products with the customers and expansion of business into CLMV countries. Such outcomes could reflect that the Company has appropriately developed and improved its business operations strategies to handle the occurring situations and that they were in the acceptable levels.
Profit sharing from investments in Bangchak Bio-fuel Company Limited, an associated company that the Company held 30% of its shares, has decreased by 56.35 percent because the Department of Energy Business has announced to decrease mixing ratio of bio diesel in diesel oil from B7 to B5 and B3, with effective from July 25, 2016 and August 25, 2016, respectively, as well as from the stock loss caused by reduction of crude palm oil prices. However, presently, the Department of Energy Business has announced to increase mixing ratio of bio diesel in diesel oil from B3 to B5, with effective from November 25, 2016. Hence, it is a promising sign for such business as the construction of the 2nd factory to increase generating capacity from 360,000 liters/day to 810,000 liters/day has been completed and its commercial operation date has been commenced on the 2nd quarter of 2016.
According to the economic outlook which forecasted that the economic situations have tendency to be better than the previous year, so the Company has established business and strategic plans to make them consistent with the short and medium vision for the current businesses by focusing on personnel potential development on continued basis to make then have knowledge, capability and initiatives for Operation Excellence. Other business and strategic plans included the expansion of market shares by employment of various strategies, i.e. import and development of new products, expansion of new customer bases and development of products jointly with the customers including expansion business to CLMV countries. With regard to the expansion of investment projects on energy business or acquisition, the Company will focus on project or business that the Company has experiences and expertise and it will prepare readiness for investments in renewable energy projects pursuant to the government policy. In this regard, the Risk Management Committee shall consider about project investment risks before proposing to the Board of Directors and/or the shareholders for consideration and approval (as the case may be).
On behalf of the Board of Directors, we would like to thank all shareholders, valued customers, business partners, all stakeholders including the Company’s management and employees for their dedication and for being important forces in driving the organization to achieve the specified vision continually, by adhering to good corporate governance principles, considering of benefits of all stakeholders without causing any negative economic, social and environmental impacts with ultimate air for stable and sustainable growth of the organization.
(Mr. Paiboon Sareewiwatthana)
Chairman of the Board of Directors
(Mr. Kitti Jivacate)
Chief Executive Officer