As the industrial sector boosts and expands production towards “Thailand 4.0”, what it needs more than ever is sufficient and reliable power to fuel manufacturing. At the forefront of power generation for industry is B.Grimm Power PCL, a subsidiary of B.Grimm Group, a leader in technology and infrastructure construction in Thailand for more than 140 years. The same way industry needs reliable power, B.Grimm Group’s biggest business relies on the vision and steady management skills of Preeyanart Soontornwata, B.Grimm Power PCL’s president, who has been part of B.Grimm's success since day one.
After earning a bachelor’s and a master’s in commerce and accountancy from Chulalongkorn University, Preeyanart took pivotal roles in various leading firms before joining B.Grimm Group in 1992 as chief financial officer. When B.Grimm Power was established in 1996, she was entrusted at the helm of the new venture that was expected to ease the effects of the global economic crisis at the time. Not only did Preeyanart successfully lay the foundation for B.Grimm Power, she steered the business through hard times and many obstacles for it to thrive, becoming the pioneering small power producer in Thailand.
Elite+ sat down with the charismatic president of B.Grimm Power at her office and talked about her success and how to maintain power – both literally and figuratively.
When I first joined the company, the Thai economy was about to crash, triggering a domino effect around the world named the Tom Yum Kung crisis. The situation began to get out of control, as the company had expanded too much before the crisis. Many Thai companies, including B.Grimm, had made huge investments as they received affordable US dollar loans, without seeing the looming disaster of the economic bubble was soon going to explode.
B.Grimm Group was largely affected because one of our businesses was product imports. Imagine when you import an item at 25 baht apiece, but the price doubled – due to the Tom Yum Kung crisis resulting in inflated currency exchange – while the product was being shipped to its destination. Our imported products included medicines, chemicals, and Siemens electrical appliances.
Thanks to our motto, “business with compassion”, we didn’t lay off our employees and leave them jobless. After the baht devaluation, we had to shut down many businesses including the cleaning and security service at the airport. We had to find a new business operator to ensure ongoing business. This was the task that I, as executive finance officer, had to manage properly to make sure the company could maintain the rest of its businesses.
However, the crisis made us realize how supportive our business partners were. Our suppliers and loan providers allowed us to extend payments, while our employees were understanding and agreed to reductions in their salaries. We managed to get through the crisis, but it turned out to be the most valuable lesson for everyone.
B.Grimm might be known as an import company, but in fact we’re a player in the infrastructure industry, as we have had a long history in the industry dating back to the reign of King Rama V. In the late 19th century, B.Grimm already built the Rangsit Canal with the Sanitwongse family and the infrastructure for telegrams in this country.
After the Tom Yum Kung crisis, the company was approached by Vikrom Kromadit, founder and CEO of Amata Corporation PCL, to invest in a small power producer (SPP) to entice and facilitate clients in his Amata Nakhon Industrial Estate in Chonburi. However, even a small power plant required an enormous amount of money for investment. As the group CFO, it became my next challenge to acquire the enormous dollar loans. As mentioned, B.Grimm is blessed with strong partners and allies, and it was not much of an ordeal to start a power business. We fully entered the power industry in 1993 and have not stopped growing since.
One important thing I learned from the crisis is that trust from your business partners will keep you in business. After the economic slump, Siemens – our turnkey contractor whom we have been doing business with since the second generation – agreed to complete the first power generation factory, despite the difficult financial situation.
A small power plant required an investment of at least 6 or 7 billion baht, and it had to be acquired through stocks. As the CFO, I knew it was my responsibility to acquire the investment – which meant seeking the right partners. We finally had E.ON (formerly Beyernwerk), a key player in the infrastructure industry and Europe’s largest utility firm, join us.
We were very lucky to successfully kick it off, as it made us the pioneer player in the industry. The move also earned us trust from our new strategic partner Vikrom, who wanted such a facility to attract clients to his Amata Nakhon Industrial Estate. Those who require stable power in production, such as Toyota or Denso, decided to become his clients because of the stable and reliable electricity we were able to provide.
We have 31 power generation plants altogether, 14 of which are commercial SPPs and 15 of which are solar power plants in Thailand. We also have a hydropower plant in Laos, and another power plant in Vietnam. B.Grimm Power is the most profitable segment of the company, as it generates about 80% of the overall revenue and is worth more than 100 billion baht.
We have also been awarded a contract of 400MW of solar power energy in Vietnam, and another nine run-off river plants via the state enterprise Eletricite du Laos (EDL) in Laos. By 2021, B.Grimm will be Thailand’s second largest SPP, with an installed combined energy generating capacity of over 2,100MW and further concessions that will add up to over 5,000MV in combined energy generating capacity.
Fortunately, in the SPP industry we received an exclusivity – an exclusive right in an entire industrial estate. After the first SPP at Amata Nakhon Industrial Estate, we built five plants at Amata City Rayong, two at Bang Kradi Industrial Estate, and another at Hemaraj Industrial Estate.
However, competition in solar or renewable energy is intense. We lost some bids because we were seriously figuring out a practical plant while many entered the bidding with a proposed plan that is impossible to be commercially viable, at a very low cost only because they wanted to win the licence in order for it to be resold.
Our business has remained environmentally friendly right from the beginning. Our SPP business is located in an industrial estate, therefore it doesn’t affect a community or environment. Also, our run-off river plants have minimal impact on forests and the environment.
Power generation and distribution is a major factor in national security, so I would have to say government policy [is the biggest challenge]. Anyhow, SPP is an industry that directly supports national power security. As a main player, we have to be very flexible, to be able to meet the policies set up by any government administration.
We are currently focusing on Asia. While eyeing Vietnam and Malaysia, we have already started a small business building transmission lines in Cambodia. In the Philippines, we are looking into a solar rooftop plant. As for China, we don’t have plans to expand there but we do have a partner there, which is Energy China, one of the largest state enterprises. Energy China is not only a supportive business partner, but it also provides outstanding battery storage. Their product is considered the best in the world, and is even seen as more reliable than products from their European counterparts.
Our annual growth has been rising about 20-30% since we first started. The equity or IR return is at 18-25%, which is considered very profitable. We also won the Best IPO Deal in Southeast Asia 2017 at the 11th annual Alpha Southeast Asia Deal & Solution Awards 2017. This is tangible success that I’m very happy about. And as someone who has been with the business since day one, I am very proud of this sustainable success.
All the accolades and profits are the result of the team’s hard work. Another thing I am proud of is the organization’s culture, which we have built through the years. We work closely together, and it has never been a case of top-down management. Input from everyone is taken into consideration, and it’s very much like family here, and it makes it very hard to leave behind. Many of us don’t want to leave the company even after we retire, and I can assure you it’s not about the handsome salary or bonuses. It’s the bond we have.
I was brought up in a family where honesty and sincerity were highly valued. My grandfather was a highly respected Phetchaburi governor at the time, and he was known and loved for his honesty and straightforwardness. I always tell my subordinates and co-workers that it’s absolutely acceptable if they don’t know something or if they make mistakes. We’re only human, and if you’re not good at something, there are ways to improve if you have the will and determination. But if they cheat, or are corrupt or dishonest, that I cannot and will not tolerate. Dishonesty is unacceptable for me.
Another thing that I value is teamwork, and I’m happy to be working in a company that supports and values teamwork. For me, every team player is equal and valuable in their own way. We have the same goal and work hard to achieve that together. Every successful person needs a great team behind them.
Interview by Manta Klangboonkrong and Ariya Watt
Web editing by Chris Wotton