Two major cement-makers - Siam Cement Industry (SCC) and Siam City Cement (SCCC) - have earmarked billions of baht to invest in recyclable power, expecting long-term benefits with the expectation that oil prices will remain high for years.
Waste from farm crops and industry will be used to power the plants.
SCC, a subsidiary of the Siam Cement Group (SCG), has set an investment budget of Bt2 billion to install a waste-heat generation system next year, in order to reduce its electricity costs 10-15 per cent the following year.
SCCC has set a budget of US$10 million (Bt356 million) to build a platform for burning waste without pollution, in order to harness this alternative-energy source.
Pramote Techasupatkul, president of SCG’s cement operations, said the company became concerned about energy costs after the oil-price rises and had been trying to reduce its costs for five years.
"We’ve spent as much as Bt1 billion over the past five years setting up parts of the cement plant to use recycled waste oil and farm products like husks, coconut and palm shells and sawdust as raw materials to produce electricity for the plant," he said.
He said the company would also spend Bt2 billion next year to set up a waste-heat generation system, which recycles heat radiating from machinery in the plant to supply a steam engine that drives the machines again.
The waste-heat generation system will reduce electricity costs 10-15 per cent, depending on the machine size.
"It’s not worth investing in alternative energy when oil prices are lower than $40 a barrel. But now that prices are up to $60 a barrel, it’s practical to consider investing in alternative energy to replace traditional energy," Pramote said.
He said the company expected a return on investment from the waste-heat generation system five years after the system started operating in 2008.
The company has also continued to study other systems to reduce production costs, he added.
Chantana Sukumanont, SCCC’s executive vice president for customer relations, said 70 per cent of the company’s costs came from energy sources like oil and electricity. Since the end of last year, oil prices in the global market have risen sharply, and the company’s production costs have increased more than 30 per cent.
In view of the higher costs, the company began spending $10 million this year to set up the technology platform - which belongs to its parent company, Holcim - to recycle such waste as old tyres, plastic and farm by-products. The platform system is scheduled for completion next year.
Chantana said the system would help the company save energy costs while increasing its earnings before interest, taxes, depreciation and amortisation from 28 per cent this year to 32 per cent next year.
Kietphong Noichaiboon, CEO of Ekarat Engineering, which installs energy-saving systems, said that after oil prices increased to $60 to $70 a barrel, most big conglomerates expanded their investment budgets to set up energy-saving systems at their manufacturing plants. Investments made since last year are estimated to be as much as Bt1 billion from several of the largest industries in Thailand.
"The initial investment in energy-saving systems will be high, but they have a long life and are of long-term benefit to the industry," he said.