Exclusive Interview: Growing relentlessly with energy

In your years as the founder and CEO of Banpu, what would you consider your greatest achievement?

Chanin: [My] determination to grow my favourite company. This stems partly due to our selection of the industry, which has been growing. And may be luck to some extent. 

In addition, building our team from no previous knowledge, relying on professionalism. I'm proud to have a team with high potential. Because we have some advantages as a relatively young organisation, which has not seen many management successions. I'm trying to have a flexible organisation, where the staff are well aware of changes and perceive changes as a normal thing.

Overseas businesses are another thing, which I'm proud of. Several years ago, we used to say 'we have been in a canal and are swimming out to the ocean'. We have to practice a lot but now I have gained more confidence.

About two and a half years ago, I had surgery on my intestine. The doctor said to me 'you're very lucky because we're  doing surgery before things went wrong seriously'. I said it's not luck. I did the inspection and when detecting [an issue], I took action."

In 1991, we had explored a lot domestically and we started to become aware that we had not found any major coal deposits for many years. So we began to look abroad, Australia and Indonesia in particular. We acquired six per cent interest in an Australian company where I sat on its board for two years. But in 1997, we had to sell the stake to bring the money back to Thailand as the country was hit with its worst economic crisis.

Has Banpu grown as fast as you expected?

I'm not sure. But we know we have to grow because in the energy industry, you can't be small. Overall, we have been growing faster than many other Thai companies. We're in the private sector. In many countries, energy firms are owned by the government. Our size is still medium to small level. We must push it further, while utilising our larger flexibility such as in quick adjustment, managing business and human resources.

A large chunk of your incomes are now derived from abroad. How do you manage these overseas businesses from your Bangkok office?

Today, we manage our businesses from Bangkok including all support functions. Major policies, systems, people development or even recruitment, have been dispatched from the headquarters. However, recently we have begun some initiatives from the areas. Our team from Bangkok is guiding and flying in to coach and work jointly with the teams in Indonesia and China. Last year, we listed our company in Indonesia. The management there has to adjust a lot.

After 2001 or 2002, we hired consultants from outside to re-evaluate ourselves, including our manpower deployment system. We have begun to recruit foreign executives to work for the areas where we have no expertise, some of them have joined us following our acquisitions of foreign firms.

We strive to have one business culture. Now we have 2,500 Indonesians, more than 900 Chinese (not counting staff at joint ventures), 400 Thais, and about 20 westerners including Britons, American, Australian, and South African natives. Among our top 40-50 executives, there are 7-8 westerners including Britons, Americans, Australians, and South Africans, and 7-8 Indonesians.

How difficult was it for a Thai company like Banpu to expand abroad?

During the initial stage, we spent much time gathering information. It's hard to pick the right place for investment. We had to learn a lot; the business environment, concession rules, and so on. Initially we found many hindrances because there were many big firms, which owned the mines. The reason we could enter the Indonesian coal-mining business was because of the Asian crisis. In China, we were "circling" around for many years before we made our first investment in 2003. We took two years to decide and did not spend much money, and then we made another investment in 2005, and another in 2008.  To date, we have invested nearly US$650 million or about 20 per cent of our total investment in China. We're not in a hurry to pour in more. Rather, we would like to make the best out of the investments we have made. Indonesian businesses account for 40-50 per cent of our total, and the rest are in Thailand.

Over a short-term Indonesia offers greater opportunity because we have established our base, the laws allow us to continue investing and we have been recognised.

Two or three years ago, we used to look at India. Indian coal is competing with Australian coal. If we have a business there, it will help us to gain more understanding of the coal market. The size of the Indian market is also interesting. We're selling 10 per cent of our coal to India.

What are your management principles?

My focus is on foreseeing things far ahead and exploiting external macroeconomic factors more for our benefit. Also, emphasis on professionalism: what we don't have, go out to find it. And since we have to be with the society, "care and synergy" are part of our corporate values. Where we operate, we must have sincerity. We can't only take but give as well. We must be able to work with any party, the local governments, joint venture partners or the central governments.

How ready is Banpu to weather the current economic storm?

At this time, we see opportunities when compared with 1997, when we were in survival mode for three years. This time, you should accumulate cash, keep debt low, keep your credit lines clean while being on he lookout for opportunity. Business development units might be able to find assets at not expensive prices that will combine and provide more synergy with existing assets. Banpu has prudently managed its risks. Many people may not know that during the second half of 2008, Banpu lost much of its profit because we hedged half of our coal sale price. As the coal prices soared, we thought it was necessary to hedge, which capped our sales prices, because we wanted to keep the bottom line as expected.

Please share some of your thoughts on how to succeed in business.

Firstly, be observant. And have a sense. When walking into a place, each person sees things differently. You must be observant then you can sense [opportunities].

Secondly, attempt to learn from and understand other persons.

Lastly, do what you like.