PTTGC fast-tracks some projects
Chemical giant adjusts in view of opportunities, trend
PTT Global Chemical (PTTGC) is revising its investment plan, which will mean bringing forward and increasing the size of some of its projects.
Chief executive officer Veerasak Kositpaisal said after the annual shareholder meeting on Monday that some projects, previously not considered a priority for PTTGC, were now likely to be brought forward because of investment opportunity and the market trend.
Investment in some of the projects could take place this year, with those involving polyurethane and polycarbonate production coming into the priority category, he said.
PTTGC is considering which investment models would be most suitable for polyurethane and polycarbonate production, he added. Investment could be undertaken by the company itself, via a joint venture or as co-investment with partners.
Project location, which will be in Southeast Asia, is also under consideration.
“The investment size will be huge, so we need to consider carefully an appropriate site that will benefit the company the most,” the CEO said.
Veerasak did not give further details, but it is believed the polyurethane and polycarbonate projects will fall under Perstorp, the French chemical company in which PTTGC is in the process of buying a 51-per-cent stake.
He said earlier that after the transaction is completed, Perstorp would invest in a toluene diisocyanate (TDI) plant in Southeast Asia. PTTGC expects the acquisition of the company to be completed in June.
TDI is the key component in producing polyurethane for the automotive industry and the property business, which are both booming sectors in Asean.
However, it may be difficult to establish a TDI plant in Thailand. The production process requires a dangerous chemical compound, cyanide, which means the project would be categorised as potentially harmful to the environment.
The project would, therefore, have to follow the procedure under Article 67 (2) of the Constitution, which would mean a substantial delay before the plant could be constructed.
Veerasak said earlier that the company was considering many Southeast Asian countries for the TDI plant, with Thailand one of the options.
Other projects in the pipeline after the merger between PTT Chemical and PTT Aromatics and Refining to form PTTGC will be revised as well. The aim of the revision is to increase the production capacity of high-potential projects. As a result, the company will spend more than under its current investment plan, he added.
“According to the existing investment plan, the company will invest about US$100 million [Bt3.8 billion] to maximise the synergy between the two firms. The revision may increase the spending to around $150 million. It should be finalised soon,” he said.
$2-bn bond issues
PTTGC plans to invest Bt130 billion during 2012-16, and targets issuing bonds worth $2 billion to mobilise funding for its investment projects, he said. The remainder will come from the company’s cash flow of $2.5 billion.
The company targets a net debt-to-equity ratio of no more than 0.7 time to maintain a healthy financial status.
Meanwhile, PTT Exploration and Production has signed a loan worth 300 million Canadian dollars (Bt9.3 billion), according to Bloomberg, citing a statement from the company.
The facility was signed last Thursday with Bank of Tokyo-Mitsubishi UFJ, Mizuho Corporate Bank and Sumitomo Mitsui Banking Corp, according to the statement.
Proceeds will be used for PTTEP’s Kai Kos Dehseh oil-sands project in Canada and the loan pays a so-called all-in rate, which includes margin and fees, of 205 basis points more than benchmark rates, a person familiar with the matter said. The facility pays fees of 175 basis points and a margin of 170 basis points, the source said.
