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NFC sees its future in logistics: Unprofitable fertilizer business is dropped(Bangkok Post (Thailand) (KRT) Via Thomson Dialog NewsEdge) Apr. 21--National Fertilizer Plc (NFC) has affirmed its aim to completely shift from fertiliser to the logistics business if the Central Bankruptcy Court approves its business rehabilitation plan. The company sought court-supervised rehabilitation late last year to restructure 1.4 billion baht in debts. Bongkot Rasameepaisarn, NFC's executive vice-president for finance and administration, said one trade creditor earlier this month submitted a petition against the rehabilitation plan to the Central Bankruptcy Court. The first hearing on the petition by Asia Polysacks Co would be held on June 9, Ms Bongkot said. "If the plan fails to get court approval, NFC could be dissolved as we cannot generate enough revenue to service the debt that now amounts to almost 1.4 billion baht," she said. "But if we can win approval from the court, NFC would fully switch to the logistics business which has high potential." NFC in 2007 recorded a net loss of 750 million baht, compared to 1.25 billion baht a year earlier due mainly to lower operating expenses. Its total revenue was 525 million baht, down sharply from 1.59 billion baht in 2006 because of lower fertiliser sales. NFC was conceived in the 1980s by the government increase local fertiliser production and cut the country's huge import bills for the products. But the company has struggled since the 1997 economic crisis, when the baht was devalued, pushing up its foreign-currency debt. In 2003, former shareholders, including PTT Plc and Krung Thai Bank, divested their holdings in NFC. New investors injected 1.5 billion baht to help revamp operations, but the company's outdated facilities led to continued losses. Wichai Thongtaeng, a major shareholder and former chairman of NFC, said the company planned to move into the logistics business by utilising its two piers in Map Ta Phut, Rayong and exiting the fertiliser business. The Rayong plant, with a maximum capacity of one million tonnes per year, ceased operations in late 2006 after three years of huge losses, he said. "We have decided not to continue making fertiliser, which is difficult to sustain with high competition and rising costs that [put NFC's prices] on par to imports," he said. "The plant's machinery is old and it is not worth spending additional funds to upgrade those equipment," said Mr Vichai, a close ally of former prime minister Thaksin Shinawatra. By divesting the fertiliser assets, NFC would sell all the machinery at its Rayong plant. The proceeds would be spent to upgrade its piers and logistics facilities, now handling bulk goods such as steel and fertilisers, to accommodate vessels up to 60,000 tonnes. The rehabilitation plan has been developed to be in line with the logistics business of Nuttaphob Ratanasuwanthawee, NFC's vice-chairman and chairman of the executive committee. Mr Nuttaphob, now the largest shareholder of NFC with 40 percent, bought the shares from PTT Plc in a tender offer in 2004. To see more of the Bangkok Post, or to subscribe to the newspaper, go to http://www.bangkokpost.com. Copyright (c) 2008, Bangkok Post, Thailand Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |