KBank advises energy efficiency to boost competitiveness ahead of AEC

KASIKORNBANK recommends that Thai business operators cut energy costs to boost their competitiveness prior to the AEC via the K-Energy Saving Guarantee Program, a low-cost investment for worthwhile performance increases over the long term. KBank has granted a loan to Thai Union FeedMill Co., Ltd. (TFM) for energy restructuring use. KBank intends to provide 3 billion Baht in new lending to companies participating in this program.

According to Mr. Songpol Chevapanyaroj, KASIKORNBANK Executive Vice President, upon AEC inception in 2015, import tariff cuts and trade liberalization will apply that will consequently cause heightened trade competition. Thai businesses need to prepare for this on several fronts, particularly manufacturing cost reduction to remain competitive among trade rivals.

Improved manufacturing and energy management would significantly help reduce production costs and boost competitiveness over the long term. KBank is the first bank in Thailand to place importance on energy cost reductions by joining hands with Schneider (Thailand) Ltd. – a global specialist in energy management – in offering the K-Energy Saving Guarantee Program for development of energy management systems with Thai businesses for greater energy saving. The program also guarantees the results on energy-saving investments.

KBank has recently provided credit via this program to TFM, an aquatic animal feed producer and distributor in the Thai Union Group, Thailand’s leading aquatic animal feed producer. Their facility will receive energy-saving management system investments for significant energy saving.

Mr. Rittirong Boonmechote, President of TFM, has said that animal feed and frozen food businesses continue to expand and will require more energy for production and freezing processes that are becoming major operational costs. The company, thus, has decided to improve their energy efficiency to cut production costs over the long term; with the K-Energy Saving Guarantee Program, they are improving their efficiency in the parts of motor, variable speed drive and monitoring systems. In the first phase, energy costs are anticipated to decrease by 8 million Baht per year and a breakeven point of three years or less.

According to Mr. Rittirong, energy consumption improvements will not only cut the company’s energy costs and boost long-term competitiveness, but also reflect a firm commitment to corporate social responsibility. This is a pilot project before application to other Thai Union Group companies.

Mr. Songpol added that amid their business preparation before the AEC, the K-Energy Saving Guarantee Program is a perfect program to enhance production efficiency and cut costs with advice from experts. With low investment costs, businesses can achieve quicker breakeven points. KBank expects to provide 3 billion Baht in new lending via the program.