Thai PTT Global eyes export boost as unrest pressures domestic petrochem demand
BANGKOK, March 11
BANGKOK, March 11 (Reuters) - Thailand's PTT Global Chemical Pcl will bank on recent alliances with state-owned Chinese and Indonesian firms to boost petrochemical exports and offset weakness in domestic demand caused by political unrest, its CEO said on Tuesday.
Thailand's largest petrochemicals maker, which is 49 percent owned by the country's top energy firm PTT Pcl, signed separate deals in 2013 with Indonesian oil and gas firm Pertamina and China's Sinochem Group to jointly develop its petrochemical business in the two countries.
"Domestic demand for plastic pellets may fall slightly, but we continue to see demand in foreign markets especially in Indonesia and China, where we have penetrated and sell more products," President and CEO Bowon Vongsinudom told Reuters.
PTT Global, one of the world's top-10 ethylene makers, exports about 30-40 percent of its petrochemical production, mainly to China, Indonesia and other Southeast Asian countries. Bowon did not say by how much the company will boost its exports.
The CEO has previously said prolonged political problems in Thailand could hurt its business in 2014. On Tuesday, PTT Pcl warned the unrest is dragging on the country's economic growth and could hit the company's target for revenue growth this year prompting it to cut costs.
PTT Global produces ethylene and propylene, together called olefins, which are petrochemicals used to make plastic pellets, especially for the packaging industry.
PTT Global has an olefins and aromatic petrochemical capacity of 8.72 million tonnes per year, and a crude oil refining capacity of 280,000 barrels per day.
Olefins contributed 60 percent of its core earnings in 2013, with 21 percent coming from aromatics and the rest from the refinery, green chemicals and other products.
"The upcycle in the olefins business will continue until next year. This is very positive for us," Bowon said.
In Indonesia, PTT Global has also joined with Pertamina to build a petrochemical complex with an estimated cost of $4-$5 billion and the company aimed to choose the location of a new olefins cracker by the middle of this year, Bowon said.
In China, it is studying plans to invest in high value-added olefins derivatives such as polyurethane for coatings used in the auto industry.
The company, which aimed to invest $790 million this year as part of its five-year capital expenditure of $4.5 billion, is also studying the possibility of investing in new a olefins project in the United States using shale gas as feedstock, Bowon said.
Shares of PTT Global, which has a market value of $10.2 billion, closed up 1.4 percent on Tuesday, outperforming a 1.1 percent gain on the broad index. ($1 = 32.32 Baht) (Editing by Muralikumar Anantharaman)