Acquisition to help PTTGC push up exports to Asia

“After the transaction is completed, we plan to inject money to increase the production capacity of isocyanates so that we can have plenty of output to serve |the rising demand in Asia. Thailand is our main target for this product. We’re working on the amount of investment for the expansion,” Veerasak Kositpaisal, president and CEO of PTTGC, said recently.
The deal was part of PTTGC’s strategy to move more into |speciality petrochemicals and enhance its presence overseas, he said. The economic slowdown in Europe would help PTTGC conclude the deal as targeted.
PTTGC’s board of directors on November 11 approved the purchase of a 51-per-cent stake in Perstorp Holding France.
Isocyanates is used to make foam and coating for the automobile and construction industries. Perstorp markets the product in Europe and Asia.
Perstorp’s employees are now considering the deal, which by French law has to get the approval of authorities and stakeholders including employees prior to |the completion of the share purchase.
PTTGC expects to take four to six months to finish all necessary procedures, so it should start realising revenue from the French operation next year.

GLOBAL DREAM
Perstorp would also help fulfil PTTGC’s dream of becoming a global petrochemical firm, he added.
PTTGC, which emerged from the merger of two of PTT’s subsidiaries – PTT Chemical and PTT Aromatics and Refining – declared on its first day of trading in October that it would invest heavily overseas, particularly in Asean, in order to grow its assets outside Thailand.
Many deals are in the pipeline. They can take the form of greenfield projects, joint ventures, or mergers and acquisitions.
Last quarter, the company |was successful in acquiring half of NatureWorks, the world’s largest manufacturer of polylactic acid, a feedstock for bioplastics, for US$150 million (Bt4.6 billion).
It tendered for Chandra Asri Petrochemical, Indonesia’s largest cracker, but failed as SCG Chemicals won by bidding $442 million.
PTTGC is also reportedly in the running for Sulfindo, another petrochemical-maker in Indonesia, with a value expected to be as high as $700 million.
CIMB Securities said in a research note that Perstorp would also benefit PTTGC by improving feedstock optimisation, as the production of toulene diisocyanate and hexamethylene dissocynate needs benzene as a feedstock, while PTTGC has to export about half of its benzene amid the benzene down cycle during 2011-12.