Rayong Purifier 'seeks justice'

The company insists the ensuing supply stoppage could lead to a complete shutdown of its refinery, biodiesel plant and petrol stations.
Rayong Purifier chairman Satja Janetumnugul yesterday said PTT had cancelled a long-term contract on February 1 to provide condensate residue, which is the main raw material for refining oil and producing petrol.
The company has already laid off about 300 employees as a result of the decision, he said.
Rayong Purifier’s main business is its oil refinery, which can produce 17,000 barrels of petrol per day, but the process is dependent on a reliable supply of condensate residue.
The company has also had to close its B100 biodiesel plant, which has a capacity to produce 300,000 litres per day, as it is a major input supplier to the refinery as well.
In addition, the company is the majority owner of 72 petrol stations, which are likely to close down gradually if the supply stoppage cannot be resolved, he said.
Even though the stations can obtain petrol from other refineries, they are not large enough buyers to secure a favourable price, which limits their ability to compete with the major petrol retailers.
Accordingly, about 700 workers might have to be laid off, Satja added.
Rayong Purifier estimates that the contract dispute has caused Bt13 billion in damages so far, and this is expected to rise to Bt20 billion in due course.
He said creditors would gradually begin claiming for damages, as various contracts have different periods for crucial matters such as land leases for oil-storage depots and petrol stations, as well as biodiesel distribution.
These are mostly long-term contracts and as the company begins defaulting on them, creditors will be seeking restitution for damages.
“For 17 years, the company has enjoyed a trustworthy reputation. Now the company is struggling to survive. The loss of revenue has caused the financial institutions to terminate our credit lines.
“Our customers have lost faith in our business. We have sued PTT and its affiliated company PTT Global Chemical, and the suit is now working its way through arbitration. My role is now mainly to concentrate on the case and try to ensure that an optimal settlement is obtained,” said the company chairman.
He insisted the PTT contract had been unfairly terminated. He said the contract had a duration of 15 years and clearly included the word “evergreen”, which provides for automatic renewal as long as Rayong Purifier abided by the terms of the contract, which it has done.
He said he never expected the contract would be terminated this way, adding that there had been a public outcry over “this injustice” and the company had consulted in particular with Senator Rosana Tositrakul to find the best ways to pursue the fight.
In addition to seeking justice through arbitration and the Civil Court, the company is examining whether it is possible to sue in the Administrative Court as well.
If the dispute cannot be resolved to Rayong Purifier’s satisfaction, the company will look to dismantle and sell the refinery and biodiesel plant to countries where such facilities are needed, such as Cambodia, Myanmar or Nigeria. It also hopes to provide consultancy services to take advantage of the company’s expertise, he said.