This story is part of Forbes’ coverage of Thailand’s Richest 2022. See the full list here.
Thailand has become the first Asian country to decriminalize the non-recreational use of cannabis. Among the first to enter this business is Gunkul Engineering, one of the largest renewable energy producers in the country. The company has earmarked an investment of 2 billion baht ($57 million) to grow and produce medical cannabis, which can also be used in cosmetics and food products. To give the venture a boost, Gunkul Engineering has teamed up with Charoen Pokphand Group, owned by the Chearavanont brothers, to develop hemp seed strains and cannabidiol-containing foods and beverages.
These moves have made investors optimistic about the company’s prospects. Its shares have risen 8% in the past year, returning its founder and chairman Gunkul Dhumrongpiyawut to the ranks of the country’s 50 richest after a four-year hiatus with a net worth of $765 million.
Sitting in the boardroom on the 8th floor of the company’s corporate headquarters in Pearl Bangkok, an office tower that looks a lot like The Gherkin in London, chairman Gunkul calls this new business “the opportunity of the decade.” He is flanked by his wife, Sopacha Dhumrongpiyawut, and the company’s CEO, Somboon Aueatchasai, who together manage the day-to-day operations. (His daughter Naruechon is the company’s COO.)
The company will use the land around its wind farms for the project. “Land is a byproduct of our wind energy business,” says Gunkul, who expects hemp to generate $50 million in revenue by next year. Sopacha adds that seeking out new opportunities is part of her husband’s DNA, but he only starts a new venture when he is “90 percent sure of success.”
Gunkul built his company from scratch. The fifth of seven children, his father owned a small shop selling building materials in Bangkok. Although his siblings were studious, Gunkul says he was never much of a student and dropped out of school as a teenager to work in his father’s shop. At the age of 18, he approached the city’s electrical service with a proposal to supply equipment. But his business took off only a decade later in 1982, when he founded his company.
In 1992, he took out a bank loan of 2 million baht and began production to take advantage of a government policy offering a 14% price premium for locally manufactured equipment. Setting up his first factory was difficult and led to “many sleepless nights,” he recalls. It was difficult to find the right people and some employees left to start competing businesses.
Gunkul’s expansion into renewable energy occurred when it secured a contract from the Electricity Generating Authority of Thailand in 2007 to install a wind turbine. “I realized that this could be a good business that could quickly start giving returns,” he explains. The company entered solar power followed by wind power, securing a number of corporate clients such as Charoen Pokphand Foods, part of the CP Group.
Almost a decade ago, Gunkul Engineering began expanding overseas with renewable energy projects in Japan, Malaysia and Vietnam. The company has since sold two of its four projects in Japan, and Gunkul says his main focus for now is on the domestic market. Looking to increase its current capacity of 642 megawatts, Gunkul Engineering in May formed a joint venture with a subsidiary of billionaire Sarath Ratanavadi’s Gulf Energy Development. The goal is to add 1,000 megawatts over the next five years.
The upcoming expansions are expected to stem the recent decline in profits. First-quarter net profit fell 17% to 505 million baht, while revenue was flat at 2.3 billion baht, following full-year declines of 35% and 10% respectively in 2021. Suwat Sinsadok, head of research at FSS International Investment Advisory Securities , expects net profit and revenue to jump 73% to 3.8 billion baht and 32% to 12.3 billion baht in 2022, respectively, and forecasts solid annual increases through 2024.
Gunkul, who grows durian on his farm near the seaside resort town of Hua Hin – and who is also a serious wine connoisseur with a collection he keeps in Hong Kong – is confident the company can increase revenue by 50% in the next five years , “I’m already looking for the next opportunity.”