IRPC to top up investment in capacity expansion to more than $1 bn
IRPC Plc plans an increase of about US$100 million in its investment to expand production capacity for aromatics, taking the overall investment to as much as US$1.1 billion.
The company expects to finalise the expansion plan within two months.
Sukrit Surabotsopon, president of IRPC, said that based on the company’s detailed study, the planned aromatics capacity expansion – labelled by the company as Maximum Aromatics Project (MARS) - is expected to see increases in paraxylene to 1.1 million to 1.3 million tonnes a year and benzene to 300,000 to 500,000 tonnes.
Currently, paraxylene production capacity is 1 million tonnes and for benzene, it is 300,000 tonnes.
IRPC, which is engaged in the petrochemical and petroleum industries in Southeast Asia, is drawing up the detailed design for MARS with expectations of completing this by the end of this year. The project’s subcontractor is expected to be chosen in the middle of next year. The project is likely to take three-and-a-half years to complete, for at 2022 finish.
In regard to progress on capacity expansion of 50 per cent at the olefins plant, this project is in the process of design and feasibility study, with an estimated investment of about $300 million to $400 million. The plan is expected to be finalised in the third quarter of this year, with construction completed in 2022.
IRPC expects to see a clearer picture on a planned merger and acquisition deal involving a plastic pellet plant in the third quarter of this year. The company is in discussions for up to three potential M&A deals.
“The company has capability to invest $3 billion or about Bt100 billion in five years,” Sukrit said. “Annually, about Bt10 billion will come from cash from operating activities and about Bt10 billion will likely be from borrowings. About $1 billion is planned for MARS and another $1 billion for M&A deals. Another $1 billion will be re reserved for future investment under the Galaxy scheme.”
A joint investment between IRPC and WHA Corporation Plc for industrial estate development in Rayong province is expected to take two to three years for an environmental impact assessment, a request for new licence and area improvement before area allocation for sale.
Sukrit said that IRPC’s second-quarter performance is expected to improve from the first quarter of this year, reflecting a gain from oil storage of about US$11 per barrel.
At the end of the second quarter of this year, the global crude price was around US$74.4 per barrel, compared with a first-quarter closing price of US$62.7 per barrel. The company’s second-quarter gross integrated margin, excluding an impact from oil storage, is expected to come in close to the first quarter’s US$14.08 a barrel.
IRPC targets earnings before interest, tax, depreciation and amortisation of about Bt29 billion in 2020, compared with the previous year’s Bt20 billion.
