PTT global chemical to target Asean for growth
PTT Global Chemical aims to expand aggressively in Asean, focusing on Indonesia, through green field projects, joint ventures, and mergers and acquisitions.
CEO Veerasak Kositpaisal said last week that the company had an investment plan for this year to 2020, but it is reclassifying the priority of the projects as PTTGC has just completed the merger of PTT Chemical (PTTCH) and PTT Aromatics and Refining (PTTAR).
The company will balance green-field projects, joint ventures and M&A deals, depending on the opportunities and the growth target. The investment will be both in the petro- and bio-based chemical businesses.
Indonesia, with the region’s largest population and market, seems to be the most interesting country for PTTGC’s investment, while the Philippines and Vietnam were interesting for the company’s petrochemical exports. Each country has a population of about 100 million. Vietnam might not need the company’s plant as products can be exported to it from Thailand.
“PTTGC’s revenue from now on will come from overseas markets. So, we have to focus on investment outside the country, and Asean countries are our priority destinations as the growth in the industry will come from this region,” he said.
Despite the ambitious expansion plan, PTTGC did not set out a firm target to supersede Petronas Chemical as the largest petrochemical player in Asean.
PTTGC has become the second-largest petrochemical firm in Asean after the merger. Its petrochemical products capacity is 8.26 million tonnes per year, for olefins, aromatics and plastic pellets, while its refining capacity is 228,000 barrels per day.
Both petrochemical and refinery businesses are running at full capacity. Petronas Chemical’s enterprise value is US$15.3 billion (Bt474 billion), while PTTGC’s is $14.5 billion.
The combined revenue of PTTCH and PTTAR in 2010 was Bt320 billion. After the merger, revenue is expected to improve to Bt400 billion.
“PTTGC has been set to be a flagship of the PTT Group in the petrochemical business. Our focus from now on is only petrochemicals, not refining, so some investment such as the green-jet fuel project will be handled by other companies in the group,” he said.
The petrochemical industry worldwide was expected to enter the upcycle next year. Supply now is quite tight, while no new output will enter the market until 2014. The prices of petrochemical products as well as spreads will be good, he added.
