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 non-recreational use of cannabis. Among the first movers in this business is Gunkul Engineering, one of the country’s biggest renewable energy producers. The company has earmarked an investment of 2 billion baht ($ 57 million) for cultivation and production of medical-grade cannabis that can also be used in cosmetics and food products. To kickstart the venture, Gunkul Engineering has teamed up with the Charoen Pokphand Group, owned by the Chearavanont brothers, to develop hemp seeds strains and cannabidiol-infused food and beverage products.
These moves have made bullish investors on the company’s prospects. Its shares rose 8% in the past year, returning its founder and chairman Gunkul Dhumrongpiyawut to the country’s 50 richest ranks after a four-year hiatus with a net worth of $ 765 million.
Seated in the 8th floor boardroom of the company’s corporate headquarters at Pearl Bangkok, an office tower that looks very similar to The Gherkin in London, chairman Gunkul calls this new business “the opportunity of the decade.” He’s flanked by his wife Sopacha Dhumrongpiyawut and the company’s CEO, Somboon Aueatchasai, who together run the day-to-day operations. (His daughter Naruechon is the company’s chief operating officer.)
The firm will be utilizing the land around its windfarms 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 looking for new opportunities is part of her husband’s DNA, but she starts a new venture only when she’s “90% confident of success.”
Gunkul built his company from scratch. The fifth of seven children, his father owned a small shop selling construction materials in Bangkok. While his siblings were diligent, Gunkul says he was never much of a student and dropped out of school as a teenager to work at his father’s shop. At age 18, he approached the city’s electricity authority offering to supply equipment. But his business got going only a decade later in 1982, when he set up his company.
In 1992, he took a bank loan of 2 million baht and got into manufacturing to take advantage of a government policy offering a 14% price premium for locally produced equipment. Setting up his first factory was arduous and led to “many sleepless nights,” he recalls. It was difficult to find the right people and some employees left to start a rival business.
Gunkul’s expansion into renewable energy came about when he secured a contract from the Electricity Generating Authority of Thailand in 2007 to install a wind turbine. “I realized this could be a good business that could start giving returns quickly,” he explains. The company got into solar followed by wind, securing a raft of corporate customers such as Charoen Pokphand Foods, part of the CP Group.
Almost a decade ago, Gunkul Engineering began to expand 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 for now his primary focus is on the domestic market. Keen to scale up its present capacity of 642 megawatts, Gunkul Engineering in May formed a joint venture with a subsidiary of billionaire Sarath Ratanavadi’s Gulf Energy Development. This aims to add 1,000 megawatts over the next five years.
The upcoming expansions are expected to arrest a recent earnings slide. First-quarter net profit fell 17% to 505 million baht while revenue stayed 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, respectively, in 2022 and predicts solid annual increases through 2024.
Gunkul, who grows durian at his farm near the beach resort town of Hua Hin — and who is also a serious wine connoisseur with a collection that he stores in Hong Kong — is confident the company can grow revenue by 50% over the next five years “I’m already looking for the next opportunity.”