Ubon Bio Ethanol Plc (UBE), a manufacturer of cassava-based products, expects to see 42% growth of revenue to 10 billion baht within 2025 as demand for value-added, processed cassava is growing in the global market.
"Despite worry over an economic recession in the US, sales of certain products, categorised as premium products, will go on," said Sureeyot Khowsurat, the newly appointed managing director of UBE.
She was referring to demand for gluten-free flour, which is made from organic cassava, for people who are allergic to gluten.
Ms Sureeyot said revenue growth will also come from the expansion of flour production capacity to 300 tonnes a day, up from 100 tonnes daily at present, as part of projects carried out under 400-million-baht capital expenditure.
This year, the company expects revenue to grow by 10-15%, up from around 7 billion baht last year.
UBE, which started business as an ethanol maker around a decade ago, is transforming itself into a leading food producer by using high technology to add value to its flour products after raising funds under an initial public offering last year.
The company already launched flour for making fritters as well as organic cassava-derived flour with distinctive characteristics such as low sugar content and high fibre.
While general cassava-derived starch is popular in China, organic and gluten-free flour are popular in the US.
Within the next few years, UBE expects its new food business to have earnings before interest, tax, depreciation and amortisation (Ebitda) at a rate of 70%, up from 30% this year, while ethanol business will see its Ebitda decrease to 30%, down from 70% currently.
To further expand food manufacturing, Ms Sureeyot said her company is planning to acquire food business assets.
UBE, which is currently in talks with local food companies, expects to conclude a deal early next year.
The move is in line with UBE's Future Food for All Generations campaign.
In the ethanol manufacturing segment, demand for ethanol, which is made from cassava and sugar, is expected to grow slightly.
Ms Sureeyot said she wants the government to promote use of gasohol E20, a mix of gasoline and 20% ethanol, to boost ethanol sales and improve revenue for cassava and sugarcane growers.
