Cassava-based ethanol maker Ubon Bio Ethanol Plc (UBE) plans to transform itself into a leading food producer by using high technology to innovate and add value to its flour products after raising funds from an initial public offering (IPO).
The move is part of a long-term plan for its carbohydrate nutrient business, said Daechapon Lersuwanaroj, managing director of UBE.
The firm is scheduled to launch flour for making fritters in October and organic cassava-derived flour with distinctive characteristics such as low sugar content and high fibre next year.
The latter has the potential to be used for making various foods, including assorted pasta, noodles, ramen and bakery pre-mixes.
Two years ago, UBE launched non-gluten and non-genetically modified organic cassava flour to sell to consumers allergic to gluten.
“The number of people allergic to gluten is increasing every year, so we position our products as their alternative choices with reasonable prices,” said Mr Daechapon.
UBE’s emphasis on food products made using high technology follows its cooperation with the state-owned National Science and Technology Development Agency.
Within the next five years, the firm expects its new food business will have earnings before interest, taxes, depreciation and amortisation (Ebitda) at a rate of 70%, up from 30% this year, while the ethanol business will see its Ebitda fall to 30%, down from 70% currently.
The new business will be partially financed by UBE’s IPO, which has been recently approved by the Securities and Exchange Commission, said Mr Daechapon.
Up to 1.37 billion shares, or 35% of 2.74-billion-baht registered capital, will be traded on the stock market, he said.
Cash from the IPO will also be used to support the development of capacity production of ethanol, cassava flour and cassava-based syrup production.
UBE’s revenue in the first half of this year grew by 40% to 2.94 billion baht, up from 2.1 billion baht in the same period of last year.
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