Credit quality is slowly beginning to stabilize across nonfinancial industries, though rating activity remains more negative than positive, said an article published today by Standard & Poor's, titled "Three U.S. Industries With The Greatest Potential To Improve Their Credit Quality In 2010 (Premium)." As the economy slowly rebounds in 2010, we expect to see areas of improvement, though upgrades likely will trail downgrades in most sectors.
"After reviewing the distribution of outlooks and CreditWatch listings, ratings trends, the performance of bond spreads, and recent operating results, we identified three sectors that we believe have the potential to see an upturn in creditworthiness next year," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "These three are health care, telecommunications, and chemicals."
Health care, which weathered the storm better than most sectors, has a relatively high positive bias (the proportion of issuers with a positive outlook or ratings on CreditWatch positive) and has seen relatively strong operating results.
The telecommunications sector also has fared well during the recession, despite having a number of highly leveraged companies. Improvement in economic and credit market conditions is supportive of continued stabilization and potential improvement in the credit quality of the telecommunications sector.
The chemicals sector has performed much worse than the other two sectors during the recession, though it has begun to show signs of stabilization. Given the cyclical nature of the sector, stronger economic conditions in 2010 could give credit quality a boost.
This article is part of our premium Global Fixed Income Research content, which is available to premium subscribers to RatingsDirect on the Global Credit Portal at www.globalcreditportal.com and to RatingsDirect at www.ratingsdirect.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Tuesday, December 15, 2009
PTT Chemical and SMC to join together for developing Thailand’s plastic industry through a strategic network
Mr. Veerasak Kositpaisal, President & CEO of PTT Chemical Plc., and Mr. Anuchit Boonthong, Chairman of SMC Corporation Limited, signed the Memorandum of Understanding to initiate a mutual co-operation on the development and support of Thailand’s blow molding industry. The two companies intend to increase the strength and potential of Thai plastic manufacturers in terms of capability to better respond to current market needs and to successfully compete in the global market.
The signing of MOU reaffirms PTT Chemical strong commitment to work together with entrepreneurs and customers to strengthen the capacity of Thailand’s plastic industry. It also marks the company’s determination to build a solid strategic business network and partnership among entrepreneurs linked to Value Chain of the plastic industry, which ranges from material manufacturers and machinery producers to end-users. For SMC, the country’s leading blow molding machinery manufacturer and vendor serving customers in over 40 countries worldwide, it will also strive to invent new technology and innovative production which allow it to react and adapt to an ever-changing market. The improvement of products and services would be mainly driven by market demands.
PTT Chemical and SMC have realized the value of partnership among related businesses where synergy and collaboration is required to reinforce the business efficiency. The development of technology, product and service, and distribution channel that aligns with the emerging consumer demands would also bring the highest benefit to the consumers and the country’s plastic industry.
Taking a role of solution provider for the customers ranging from manufacturers to end-users, PTT Chemical, is now ready to team up with entrepreneurs, customers, and those who are interested, to lift up Thailand’s plastic industry. PTT Chemical Plc is Thailand’s leading petrochemical and plastic resins manufacturer with the Olefins production capacity of 1.8 million tons per year and the HDPE production capacity of 800,000 tons per year. In the fourth quarter of 2009 to early 2010, the company will start a commercial operation of its LLDPE and LDPE plants which will give a production capacity of 400,000 tons per year and 300,000 tons per year, respectively. With the new products soon to be launched to the market the company aims to offer more solutions as well as complete services to the market.
The signing of MOU reaffirms PTT Chemical strong commitment to work together with entrepreneurs and customers to strengthen the capacity of Thailand’s plastic industry. It also marks the company’s determination to build a solid strategic business network and partnership among entrepreneurs linked to Value Chain of the plastic industry, which ranges from material manufacturers and machinery producers to end-users. For SMC, the country’s leading blow molding machinery manufacturer and vendor serving customers in over 40 countries worldwide, it will also strive to invent new technology and innovative production which allow it to react and adapt to an ever-changing market. The improvement of products and services would be mainly driven by market demands.
PTT Chemical and SMC have realized the value of partnership among related businesses where synergy and collaboration is required to reinforce the business efficiency. The development of technology, product and service, and distribution channel that aligns with the emerging consumer demands would also bring the highest benefit to the consumers and the country’s plastic industry.
Taking a role of solution provider for the customers ranging from manufacturers to end-users, PTT Chemical, is now ready to team up with entrepreneurs, customers, and those who are interested, to lift up Thailand’s plastic industry. PTT Chemical Plc is Thailand’s leading petrochemical and plastic resins manufacturer with the Olefins production capacity of 1.8 million tons per year and the HDPE production capacity of 800,000 tons per year. In the fourth quarter of 2009 to early 2010, the company will start a commercial operation of its LLDPE and LDPE plants which will give a production capacity of 400,000 tons per year and 300,000 tons per year, respectively. With the new products soon to be launched to the market the company aims to offer more solutions as well as complete services to the market.
Monday, December 7, 2009
TETRA PAK AND BRASKEM SIGN AGREEMENT TO PILOT GREEN PLASTIC IN CARTON PACKAGING
Tetra Pak, the world leader in food processing and packaging solutions, has reached agreement with the largest Brazilian petrochemical company, Braskem SA, to purchase limited volumes of high-density polyethylene (HDPE) derived entirely from a renewable feedstock. The agreement represents the first move toward using green polyethylene in the carton packaging industry.
Braskem expects the world’s first commercial-scale green polyethylene plant, located in the south of Brazil, to come on stream late next year and is targeting first deliveries to Tetra Pak early in 2011. The new facility will use ethanol derived from sugar cane to produce ethylene, which will then be converted into polyethylene, the world’s most commonly used plastic. It is estimated that the process will result in an overall reduction in greenhouse gas emissions when compared with the traditional process for manufacturing polyethylene.
Under the terms of today’s agreement, Braskem will begin supplying Tetra Pak with 5 Ktons per year of green HDPE from 2011, for use in the production of plastic caps and closures. The volume represents just over 5% of the company's total HDPE demand, and is slightly less than 1% of its total plastics purchases.
“While this pilot project is a small first step into green polyethylene, it marks another milestone in our sustainability journey … and underscores our commitment to finding new ways to use renewable materials in our carton packaging,” said Tetra Pak President and Chief Executive Officer Dennis Jönsson.
“We are very pleased to partner with Tetra Pak to supply a viable renewable alternative to traditional polyethylene. This is another step our longstanding partnership as a Tetra Pak global supplier and demonstrates both companies' commitment to sustainable development,” said Braskem CEO Bernardo Gradin.
As the world’s leading supplier of wood fibre based carton packaging, the concept of renewable feedstock is well established within Tetra Pak and the company is active in promoting the use of responsibly managed resources. Tetra Pak is actively involved with the Forestry Stewardship Council (FSC) and is supporting the development of a sustainability certification standard to guide the production of renewable raw materials to supply the green plastics chain.
Tetra Pak is also a partner in the WWF Climate Savers Programme and is on track to meet its commitment to reduce global carbon emissions by 10% in absolute terms between 2005 and 2010.
In 2002 Braskem issued a public commitment related to its contribution to sustainable development, and it was the first Brazilian company to endorse the UNEP International Declaration on Cleaner Production. Since 2005 it has been listed on the Brazilian Stock Exchange Sustainability Index (ISE Bovespa). All its industrial plants are ISO 14001 certified. This year, in support of the climate change engagement movement, Braskem signed the Copenhagen Communiqué on Climate Change.
Braskem expects the world’s first commercial-scale green polyethylene plant, located in the south of Brazil, to come on stream late next year and is targeting first deliveries to Tetra Pak early in 2011. The new facility will use ethanol derived from sugar cane to produce ethylene, which will then be converted into polyethylene, the world’s most commonly used plastic. It is estimated that the process will result in an overall reduction in greenhouse gas emissions when compared with the traditional process for manufacturing polyethylene.
Under the terms of today’s agreement, Braskem will begin supplying Tetra Pak with 5 Ktons per year of green HDPE from 2011, for use in the production of plastic caps and closures. The volume represents just over 5% of the company's total HDPE demand, and is slightly less than 1% of its total plastics purchases.
“While this pilot project is a small first step into green polyethylene, it marks another milestone in our sustainability journey … and underscores our commitment to finding new ways to use renewable materials in our carton packaging,” said Tetra Pak President and Chief Executive Officer Dennis Jönsson.
“We are very pleased to partner with Tetra Pak to supply a viable renewable alternative to traditional polyethylene. This is another step our longstanding partnership as a Tetra Pak global supplier and demonstrates both companies' commitment to sustainable development,” said Braskem CEO Bernardo Gradin.
As the world’s leading supplier of wood fibre based carton packaging, the concept of renewable feedstock is well established within Tetra Pak and the company is active in promoting the use of responsibly managed resources. Tetra Pak is actively involved with the Forestry Stewardship Council (FSC) and is supporting the development of a sustainability certification standard to guide the production of renewable raw materials to supply the green plastics chain.
Tetra Pak is also a partner in the WWF Climate Savers Programme and is on track to meet its commitment to reduce global carbon emissions by 10% in absolute terms between 2005 and 2010.
In 2002 Braskem issued a public commitment related to its contribution to sustainable development, and it was the first Brazilian company to endorse the UNEP International Declaration on Cleaner Production. Since 2005 it has been listed on the Brazilian Stock Exchange Sustainability Index (ISE Bovespa). All its industrial plants are ISO 14001 certified. This year, in support of the climate change engagement movement, Braskem signed the Copenhagen Communiqué on Climate Change.
“INDORAMA VENTURES” SUBMITS FILING FOR EXCHANGE OFFER TO BUY IRP SHARES
Petrochemical producer Indorama Ventures Public Company Limited (IVL) has filed a registration statement and draft prospectus (the “Filing”) with the Office of the Securities and Exchange Commission (SEC) to offer IVL newly issued ordinary shares in exchange for shares of its subsidiary Indorama Polymers Public Company Limited (IRP) held by minorities of IRP shareholders.
The move is part of IVL’s shareholding and management restructuring plan, a significant step in preparation for being listed on the Stock Exchange of Thailand (SET). Bualuang Securities Public Company Limited is a financial advisor to IVL.
Under the shareholding and management restructuring plan, in preparation for initial public offering (IPO) and SET listing scheduled for early 2010. Concurrently, IVL will undertake the shareholding structuring between IVL and IRP. Once approved or waivers has been granted by concerned agencies, IVL will conduct a tender offer to exchange its newly issued ordinary shares for all IRP’s shares held by IRP minority shareholders. IRP will be subsequently delisted from the SET on the same day that IVL starts to trade its shares (including those under the tender offer and IPO) on the SET. IRP minority shareholders who accept the tender offer will be able to trade their shares simultaneously with IVL’s newly issued shares on the first trading date of IVL shares on the SET.
According to the shareholding and management restructuring plan, IVL will offer its newly issued ordinary shares as a consideration to IRP minority shareholders who accept the tender offer at a rate of 1.2320 IVL (Bt1 par value) shares for each IRP share (Bt1 par value) with no cash alternative. The total IRP shares that IVL will make a tender offer for are 424.48 million shares, accounting for 30.71 percent of total IRP’s paid-up shares. Such shareholding and management restructuring plan was approved by IRP extraordinary shareholders’ meeting on 27 October 2009.
IVL believes that the new shareholding structure will increase IVL’s transparency and eliminate any potential conflict of interest between IVL and IRP after IVL’s listing. In addition, IVL believes that the current minority shareholders of IRP will enjoy benefits from IVL’s integrated petrochemical value chain business through investments in its subsidiaries.
Editor’s note:
The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States of America. The materials do not constitute an offer of securities for sale in the United States, nor may the securities be offered or sold in the United States absent registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. There is no intention to register any portion of the offering in the United States of America or to conduct a public offering of securities in the United States of America.
The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration exemption from registration or qualification under the securities laws of any such jurisdiction.
The move is part of IVL’s shareholding and management restructuring plan, a significant step in preparation for being listed on the Stock Exchange of Thailand (SET). Bualuang Securities Public Company Limited is a financial advisor to IVL.
Under the shareholding and management restructuring plan, in preparation for initial public offering (IPO) and SET listing scheduled for early 2010. Concurrently, IVL will undertake the shareholding structuring between IVL and IRP. Once approved or waivers has been granted by concerned agencies, IVL will conduct a tender offer to exchange its newly issued ordinary shares for all IRP’s shares held by IRP minority shareholders. IRP will be subsequently delisted from the SET on the same day that IVL starts to trade its shares (including those under the tender offer and IPO) on the SET. IRP minority shareholders who accept the tender offer will be able to trade their shares simultaneously with IVL’s newly issued shares on the first trading date of IVL shares on the SET.
According to the shareholding and management restructuring plan, IVL will offer its newly issued ordinary shares as a consideration to IRP minority shareholders who accept the tender offer at a rate of 1.2320 IVL (Bt1 par value) shares for each IRP share (Bt1 par value) with no cash alternative. The total IRP shares that IVL will make a tender offer for are 424.48 million shares, accounting for 30.71 percent of total IRP’s paid-up shares. Such shareholding and management restructuring plan was approved by IRP extraordinary shareholders’ meeting on 27 October 2009.
IVL believes that the new shareholding structure will increase IVL’s transparency and eliminate any potential conflict of interest between IVL and IRP after IVL’s listing. In addition, IVL believes that the current minority shareholders of IRP will enjoy benefits from IVL’s integrated petrochemical value chain business through investments in its subsidiaries.
Editor’s note:
The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States of America. The materials do not constitute an offer of securities for sale in the United States, nor may the securities be offered or sold in the United States absent registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. There is no intention to register any portion of the offering in the United States of America or to conduct a public offering of securities in the United States of America.
The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration exemption from registration or qualification under the securities laws of any such jurisdiction.
CLSA appoints Head of Sales Trading in Thailand and strengthens sales offering, after sweeping 2009 Asiamoney Poll
CLSA Asia-Pacific Markets, Asia's leading independent brokerage and investment group, has followed its impressive showing in Asiamoney’s annual Brokers Poll with the hire of two industry veterans to further augment the company’s sales and sales trading capabilities.
Michael Frost joins as Head of Sales Trading in Thailand, and institutional sales specialist Lilly Kulvanichpisit brings 17 years of experience to its sales team, both hires represent CLSA’s commitment to expansion in the country and ensuring excellence in execution and client management.
On his decision to join CLSA, Frost said, “CLSA's global reputation for dynamic sales trading, unparalleled product and unmatched growth is what attracted me to the firm. I’m excited to be part of the team."
The growing of the sales team comes just days after Asiamoney’s annual Brokers Poll results were published, with CLSA again voted Thailand’s top brokerage by global fund managers.
CLSA clearly leads Thailand for its research coverage, retaining the top position in Thailand for country research (No.1 in 2008), with CLSA Head of Research Andrew Stotz again ranking Thailand’s No.1 equity analyst (No.1 in 2008).
In addition to being recognised for its leading research, CLSA’s sales services and execution was named the best in Thailand, with the brokerage taking the No.1 place for Best Overall Sales Services for the third consecutive year, and Best in Sales Trading and Best Overall Execution for the second consecutive year respectively.
CLSA also took out the title of Most Improved Brokerage in the last 12 months for the second year running.
CLSA Thailand Country Head, Pekka Johnson, said the new hires were only going to strengthen the sales offering of CLSA Thailand, with both Frost and Kulvanichpisit bringing broad industry and market knowledge and expertise to the table.
“CLSA Thailand’s priority is offering our clients the absolute best in accurate analysis and unrivalled service, and we are committed to upholding the exceptional standards which they have come to expect.”
“I am delighted to welcome Frost and Kulvanichpisit to our team, and look forward to the contribution and enhancement they will offer.”
“The poll rankings are a reflection of a job well done by all at CLSA Thailand, and we intend to carry this momentum forward and continue our expansion into the coming year,” said Johnson.
About Michael Frost
Frost has spent the majority of the last decade in Asia having completed stints in both Bangkok and Singapore, where he was most recently working as Head of South East Asian Sales Trading at ICAP, before which he spent three years at Merrill Lynch as a Director of Sales Trading.
Frost not only brings with him extensive industry experience, but also energy, enthusiasm and leadership finesse that is sure to reinforce the already stellar performance of CLSA Thailand’s sales trading team.
He commenced his new role with CLSA Thailand on 23 November, 2009.
About Lilly Kulvanichpisit
Prior to accepting her role with CLSA Thailand, Kulvanichpisit was with Asia Plus Securities, where she served as Marketing Director since 2002. Prior to this she was with WI Carr, KGI Securities and Merrill Lynch in Institutional Sales.
Kulvanichpisit will start her new role in early December, 2009.
About CLSA Thailand
CLSA is one of the longest standing foreign brokers operating in Thailand and has been serving domestic and international fund managers from Bangkok since 1989.
CLSA Securities Thailand is a full member of the Stock Exchange of Thailand (“SET”) and in 2008 co-hosted with SET Thailand Focus, an investment forum for foreign and domestic Thai investors.
A dedicated team of award-winning analysts covers more than 40 Thai companies in the agribusiness, conglomerates, consumer, financials, healthcare, industrials, media, petrochemicals, oil and gas, property, telecoms and transport sectors.
About CLSA Asia-Pacific Markets
CLSA Asia-Pacific Markets is Asia’s leading, independent brokerage and investment group. The company provides equity broking, capital markets, merger and acquisition, and asset management services to global corporate and institutional clients.
Renowned for service excellence, product innovation and award-winning market intelligence, CLSA has built its reputation on unrivalled equity research and economic analysis which is consistently ranked the best in Asia.
CLSA is one of Asia’s largest independent equity brokers and one of the world’s largest agency brokers. The group’s investment banking services include M&A advisory, equity transactions and public offerings. Alternative asset management is offered through ten Asia-based funds under CLSA Capital Partners.
Founded in 1986 and headquartered in Hong Kong, CLSA has 1,350 dedicated professionals located in 15 Asian cities, plus Dubai, London, Port Louis (Mauritius) and New York. CLSA’s major shareholder is France's Credit Agricole, which merged in 2003 with Credit Lyonnais. CLSA enjoys substantial staff ownership which contributes to its independent stance and operations.
Michael Frost joins as Head of Sales Trading in Thailand, and institutional sales specialist Lilly Kulvanichpisit brings 17 years of experience to its sales team, both hires represent CLSA’s commitment to expansion in the country and ensuring excellence in execution and client management.
On his decision to join CLSA, Frost said, “CLSA's global reputation for dynamic sales trading, unparalleled product and unmatched growth is what attracted me to the firm. I’m excited to be part of the team."
The growing of the sales team comes just days after Asiamoney’s annual Brokers Poll results were published, with CLSA again voted Thailand’s top brokerage by global fund managers.
CLSA clearly leads Thailand for its research coverage, retaining the top position in Thailand for country research (No.1 in 2008), with CLSA Head of Research Andrew Stotz again ranking Thailand’s No.1 equity analyst (No.1 in 2008).
In addition to being recognised for its leading research, CLSA’s sales services and execution was named the best in Thailand, with the brokerage taking the No.1 place for Best Overall Sales Services for the third consecutive year, and Best in Sales Trading and Best Overall Execution for the second consecutive year respectively.
CLSA also took out the title of Most Improved Brokerage in the last 12 months for the second year running.
CLSA Thailand Country Head, Pekka Johnson, said the new hires were only going to strengthen the sales offering of CLSA Thailand, with both Frost and Kulvanichpisit bringing broad industry and market knowledge and expertise to the table.
“CLSA Thailand’s priority is offering our clients the absolute best in accurate analysis and unrivalled service, and we are committed to upholding the exceptional standards which they have come to expect.”
“I am delighted to welcome Frost and Kulvanichpisit to our team, and look forward to the contribution and enhancement they will offer.”
“The poll rankings are a reflection of a job well done by all at CLSA Thailand, and we intend to carry this momentum forward and continue our expansion into the coming year,” said Johnson.
About Michael Frost
Frost has spent the majority of the last decade in Asia having completed stints in both Bangkok and Singapore, where he was most recently working as Head of South East Asian Sales Trading at ICAP, before which he spent three years at Merrill Lynch as a Director of Sales Trading.
Frost not only brings with him extensive industry experience, but also energy, enthusiasm and leadership finesse that is sure to reinforce the already stellar performance of CLSA Thailand’s sales trading team.
He commenced his new role with CLSA Thailand on 23 November, 2009.
About Lilly Kulvanichpisit
Prior to accepting her role with CLSA Thailand, Kulvanichpisit was with Asia Plus Securities, where she served as Marketing Director since 2002. Prior to this she was with WI Carr, KGI Securities and Merrill Lynch in Institutional Sales.
Kulvanichpisit will start her new role in early December, 2009.
About CLSA Thailand
CLSA is one of the longest standing foreign brokers operating in Thailand and has been serving domestic and international fund managers from Bangkok since 1989.
CLSA Securities Thailand is a full member of the Stock Exchange of Thailand (“SET”) and in 2008 co-hosted with SET Thailand Focus, an investment forum for foreign and domestic Thai investors.
A dedicated team of award-winning analysts covers more than 40 Thai companies in the agribusiness, conglomerates, consumer, financials, healthcare, industrials, media, petrochemicals, oil and gas, property, telecoms and transport sectors.
About CLSA Asia-Pacific Markets
CLSA Asia-Pacific Markets is Asia’s leading, independent brokerage and investment group. The company provides equity broking, capital markets, merger and acquisition, and asset management services to global corporate and institutional clients.
Renowned for service excellence, product innovation and award-winning market intelligence, CLSA has built its reputation on unrivalled equity research and economic analysis which is consistently ranked the best in Asia.
CLSA is one of Asia’s largest independent equity brokers and one of the world’s largest agency brokers. The group’s investment banking services include M&A advisory, equity transactions and public offerings. Alternative asset management is offered through ten Asia-based funds under CLSA Capital Partners.
Founded in 1986 and headquartered in Hong Kong, CLSA has 1,350 dedicated professionals located in 15 Asian cities, plus Dubai, London, Port Louis (Mauritius) and New York. CLSA’s major shareholder is France's Credit Agricole, which merged in 2003 with Credit Lyonnais. CLSA enjoys substantial staff ownership which contributes to its independent stance and operations.
TRIS Rating Affirms Company Rating of “BCP” at “BBB+/Positive” and Affirms Issue Rating of “SIAMDR” at “AA/Stable”
TRIS Rating Co., Ltd. has affirmed the company rating of The Bangchak Petroleum PLC (BCP) at “BBB+” with “positive” outlook. The rating reflects BCP’s satisfactory refinery operations, strengthened balance sheet, and integration and support from PTT PLC (PTT). The rating also takes into consideration the fluctuations in oil prices and gross refining margins as well as declining demand for refined petroleum products.
The “positive” outlook reflects the expectation that BCP’s new cracking unit will alleviate the existing refinery limitations and yield more high-value refined products. The flexibility in operating two crude distillation unit (CDU) trains will enable BCP to capture new opportunities to maximize gross refining margin and help BCP weather the down cycles of the refining business.
TRIS Rating reported that BCP was established in 1985 and listed on the Stock Exchange of Thailand (SET) in 1993. The company owns and operates an oil refinery located in Bangkok with a capacity of 120 thousand barrels per day (KBD). The company also operates approximately 1,000 service stations under the “Bangchak” brand. After a capital increase in May 2006, PTT became the major shareholder of BCP. As of April 2009, PTT held 29.7% of BCP, the Ministry of Finance (MOF) held 11.2%, and the remaining 59.1% was held by the public. As a simple refinery, BCP produces a higher portion of fuel oil, which is a lower-value product, than a complex refinery. The average product mix during 2005 to 2009 was diesel (35%), fuel oil (32%), gasoline (17%) and other refined products (16%).
TRIS Rating said about BCP’s operating performance that it has continuously improved. The refinery utilization rate increased from 48% in 2006 to 69% for the first half of 2009 as the company has been able to export premium-grade fuel oil to China and Japan. Cheaper domestic crude now makes up a larger portion of stock feed needs. Higher selling prices for premium-grade fuel oil plus a substantial gain from hedging pushed BCP’s total gross refining margin (GRM) to US$13.08 per barrel for the first half of 2009. The marketing margin of BCP improved continually in the second half of 2008 through the first half of 2009, after recording a negative margin in the first half of 2008. BCP could adjust retail prices in line with changes in the ex-refinery prices, resulting in a favorable marketing margin of Bt0.64 per liter in the first half of 2009. Combining the refining and marketing businesses, earnings before interest, tax, depreciation and amortization (EBITDA) improved to Bt7,094 million in the first half of 2009 from Bt4,384 million in first half of 2008.
The product quality improvement (PQI) project will enhance BCP’s refinery performance and gross refining margin. The refinery will be able to process more varieties of crude, especially heavy and sour crude. The proportion of gasoline and middle distillates is expected to increase from the existing level of 64% to 82%. In addition, two trains of CDU, operating at 80 KBD and 40 KBD, may enhance gross refining margin. The CDU with 80 KBD of capacity may be utilized as a complex refinery to maximize the amount of gasoline and middle distillates produced. The other CDU may operate as a simple refinery to produce very low sulfur fuel oil (FOVS) for export.
TRIS Rating said, BCP’s capital structure remained healthy, with a debt to capitalization ratio of 42.5% as of June 2009. The construction of the cracking unit and the bio-diesel plant have been completed and will be ready for the Commercial Operation Date (COD) in late 2009. BCP’s capital expenditures in the coming years will be moderate and the debt to capitalization ratio is expected to maintain at 40%-45%.
TRIS Rating sees the global economic slowdown has reduced demand for refined petroleum products. New refining capacity in the Asia-Pacific region during 2009-2011 would possibly lead to a regional over-supply situation and, in turn, put more pressure on gross refining margin.
At the same time, TRIS Rating has also affirmed the “AA” rating with “stable” outlook for the Bt4,000 million in depository receipts on BCP’s subordinated convertible debentures (BCP141A) issued by Siam DR Co., Ltd. (SIAMDR). The rating reflects the credit support, in terms of principal protection, provided by the Ministry of Finance (MOF) to buy back the issue at the original offering price should BCP be unable to make the scheduled payments on time. The rating also reflects the additional security elements embedded in the transaction structure and the credit quality of the underlying issuer, BCP. The “stable” outlook for the depository receipts is derived from the principal protection provided by the MOF and the credit quality of BCP.
The “positive” outlook reflects the expectation that BCP’s new cracking unit will alleviate the existing refinery limitations and yield more high-value refined products. The flexibility in operating two crude distillation unit (CDU) trains will enable BCP to capture new opportunities to maximize gross refining margin and help BCP weather the down cycles of the refining business.
TRIS Rating reported that BCP was established in 1985 and listed on the Stock Exchange of Thailand (SET) in 1993. The company owns and operates an oil refinery located in Bangkok with a capacity of 120 thousand barrels per day (KBD). The company also operates approximately 1,000 service stations under the “Bangchak” brand. After a capital increase in May 2006, PTT became the major shareholder of BCP. As of April 2009, PTT held 29.7% of BCP, the Ministry of Finance (MOF) held 11.2%, and the remaining 59.1% was held by the public. As a simple refinery, BCP produces a higher portion of fuel oil, which is a lower-value product, than a complex refinery. The average product mix during 2005 to 2009 was diesel (35%), fuel oil (32%), gasoline (17%) and other refined products (16%).
TRIS Rating said about BCP’s operating performance that it has continuously improved. The refinery utilization rate increased from 48% in 2006 to 69% for the first half of 2009 as the company has been able to export premium-grade fuel oil to China and Japan. Cheaper domestic crude now makes up a larger portion of stock feed needs. Higher selling prices for premium-grade fuel oil plus a substantial gain from hedging pushed BCP’s total gross refining margin (GRM) to US$13.08 per barrel for the first half of 2009. The marketing margin of BCP improved continually in the second half of 2008 through the first half of 2009, after recording a negative margin in the first half of 2008. BCP could adjust retail prices in line with changes in the ex-refinery prices, resulting in a favorable marketing margin of Bt0.64 per liter in the first half of 2009. Combining the refining and marketing businesses, earnings before interest, tax, depreciation and amortization (EBITDA) improved to Bt7,094 million in the first half of 2009 from Bt4,384 million in first half of 2008.
The product quality improvement (PQI) project will enhance BCP’s refinery performance and gross refining margin. The refinery will be able to process more varieties of crude, especially heavy and sour crude. The proportion of gasoline and middle distillates is expected to increase from the existing level of 64% to 82%. In addition, two trains of CDU, operating at 80 KBD and 40 KBD, may enhance gross refining margin. The CDU with 80 KBD of capacity may be utilized as a complex refinery to maximize the amount of gasoline and middle distillates produced. The other CDU may operate as a simple refinery to produce very low sulfur fuel oil (FOVS) for export.
TRIS Rating said, BCP’s capital structure remained healthy, with a debt to capitalization ratio of 42.5% as of June 2009. The construction of the cracking unit and the bio-diesel plant have been completed and will be ready for the Commercial Operation Date (COD) in late 2009. BCP’s capital expenditures in the coming years will be moderate and the debt to capitalization ratio is expected to maintain at 40%-45%.
TRIS Rating sees the global economic slowdown has reduced demand for refined petroleum products. New refining capacity in the Asia-Pacific region during 2009-2011 would possibly lead to a regional over-supply situation and, in turn, put more pressure on gross refining margin.
At the same time, TRIS Rating has also affirmed the “AA” rating with “stable” outlook for the Bt4,000 million in depository receipts on BCP’s subordinated convertible debentures (BCP141A) issued by Siam DR Co., Ltd. (SIAMDR). The rating reflects the credit support, in terms of principal protection, provided by the Ministry of Finance (MOF) to buy back the issue at the original offering price should BCP be unable to make the scheduled payments on time. The rating also reflects the additional security elements embedded in the transaction structure and the credit quality of the underlying issuer, BCP. The “stable” outlook for the depository receipts is derived from the principal protection provided by the MOF and the credit quality of BCP.
Thursday, November 19, 2009
PTT Chemical and SMC to join together for developing Thailand’s plastic industry through a strategic network
Mr. Veerasak Kositpaisal, President & CEO of PTT Chemical Plc., and Mr. Anuchit Boonthong, Chairman of SMC Corporation Limited, signed the Memorandum of Understanding to initiate a mutual co-operation on the development and support of Thailand’s blow molding industry. The two companies intend to increase the strength and potential of Thai plastic manufacturers in terms of capability to better respond to current market needs and to successfully compete in the global market.
The signing of MOU reaffirms PTT Chemical strong commitment to work together with entrepreneurs and customers to strengthen the capacity of Thailand’s plastic industry. It also marks the company’s determination to build a solid strategic business network and partnership among entrepreneurs linked to Value Chain of the plastic industry, which ranges from material manufacturers and machinery producers to end-users. For SMC, the country’s leading blow molding machinery manufacturer and vendor serving customers in over 40 countries worldwide, it will also strive to invent new technology and innovative production which allow it to react and adapt to an ever-changing market. The improvement of products and services would be mainly driven by market demands.
PTT Chemical and SMC have realized the value of partnership among related businesses where synergy and collaboration is required to reinforce the business efficiency. The development of technology, product and service, and distribution channel that aligns with the emerging consumer demands would also bring the highest benefit to the consumers and the country’s plastic industry.
Taking a role of solution provider for the customers ranging from manufacturers to end-users, PTT Chemical, is now ready to team up with entrepreneurs, customers, and those who are interested, to lift up Thailand’s plastic industry. PTT Chemical Plc is Thailand’s leading petrochemical and plastic resins manufacturer with the Olefins production capacity of 1.8 million tons per year and the HDPE production capacity of 800,000 tons per year. In the fourth quarter of 2009 to early 2010, the company will start a commercial operation of its LLDPE and LDPE plants which will give a production capacity of 400,000 tons per year and 300,000 tons per year, respectively. With the new products soon to be launched to the market the company aims to offer more solutions as well as complete services to the market.
The signing of MOU reaffirms PTT Chemical strong commitment to work together with entrepreneurs and customers to strengthen the capacity of Thailand’s plastic industry. It also marks the company’s determination to build a solid strategic business network and partnership among entrepreneurs linked to Value Chain of the plastic industry, which ranges from material manufacturers and machinery producers to end-users. For SMC, the country’s leading blow molding machinery manufacturer and vendor serving customers in over 40 countries worldwide, it will also strive to invent new technology and innovative production which allow it to react and adapt to an ever-changing market. The improvement of products and services would be mainly driven by market demands.
PTT Chemical and SMC have realized the value of partnership among related businesses where synergy and collaboration is required to reinforce the business efficiency. The development of technology, product and service, and distribution channel that aligns with the emerging consumer demands would also bring the highest benefit to the consumers and the country’s plastic industry.
Taking a role of solution provider for the customers ranging from manufacturers to end-users, PTT Chemical, is now ready to team up with entrepreneurs, customers, and those who are interested, to lift up Thailand’s plastic industry. PTT Chemical Plc is Thailand’s leading petrochemical and plastic resins manufacturer with the Olefins production capacity of 1.8 million tons per year and the HDPE production capacity of 800,000 tons per year. In the fourth quarter of 2009 to early 2010, the company will start a commercial operation of its LLDPE and LDPE plants which will give a production capacity of 400,000 tons per year and 300,000 tons per year, respectively. With the new products soon to be launched to the market the company aims to offer more solutions as well as complete services to the market.
Thursday, November 12, 2009
PTTCH raises revenue goal to B150bn
PTT Chemical Plc, the country's largest olefins maker, has increased its revenue forecast next year to 150 billion baht from an earlier estimate of 120 billion,said Veerasak Kositpaisal, president and CEO.
The revision is due mainly to petrochemical product prices rising to US$1,200 per tonne, higher than its earlier prediction of $800 to $900 a tonne.It also expects average crude prices will not exceed $80 per barrel.
The company will also have additional polymer production plants and an extra 1 million tonnes of olefins from a new cracking unit that will start operation in the first quarter of next year.
The new plants will gradually start producing 400,000 tonnes of linear lowdensity polyethylene, 300,000 tonnes of low-density polyethylene and 500,000 tonnes of high-density polyethylene.
"Luckily, these new plants are not included in the 76 affected projects suspended by the court in Map Ta Phut, so they can go on as scheduled," he said.
Despite a new polymer plant opening in the Middle East, which will add more than 5 million tonnes to the market next year, a revived regional economy should absorb the new supply, he said.
PTTCH signed a memorandum of understanding yesterday with SMC Cor-poration Ltd, a local moulding machinery producer, in a bid to co-develop high-efficiency plastic pallets.
The partners will co-develop plastic products to better serve demand and seek ways to cut losses in the production process.
"Using their plastic moulding machinery will accelerate the development of products to meet our clients' requirements," said Mr Veerasak.
"Instead of starting a price war during fierce competition, research and development is a better option for sustainable business development."
PTTCH reported lower third-quarter sales by 1% to 23.46 billion baht from 23.64 billion a year earlier, while net profit decreased 43% to 2.82 billion (1.88 baht a share) from 4.92 billion baht (3.29 baht a share) in line with sliding petrochemical prices.
For the nine-month period, net profit was 4.56 billion baht (3.05 baht a share),a drop from 15.92 billion (10.94 baht a share) in the same period last year.Despite the decline, its shares only dropped 75 satang to 72.5 baht yesterday in trade worth 448.38 million.
PTTCH's parent company, PTT Plc,reported a 5% drop in its third-quarter net profit to 16.99 billion baht, in line with forecasts, due to lower contributions from its exploration and refinery businesses.
Nine-month consolidated net profit was 44.37 billion baht (15.69 baht a share), a decline of 40% from 73.9 billion (26.21 baht a share) in the same period last year.
Results in the fourth quarter are expected to be hit by lower earnings from subsidiary PTTEP due to an oil leak at Montara field near Australia, analysts said. Next year's outlook will also depend partly on how the government resolves the dispute over the Map Ta Phut industrial estate, where the PTT Group is a major investor.
Shares of PTT closed yesterday at 250 baht, up two baht, in trade worth 1.73 billion baht, while PTTEP closed at 144 baht, up 4.5 baht, in trade worth 1.8 billion baht.
The revision is due mainly to petrochemical product prices rising to US$1,200 per tonne, higher than its earlier prediction of $800 to $900 a tonne.It also expects average crude prices will not exceed $80 per barrel.
The company will also have additional polymer production plants and an extra 1 million tonnes of olefins from a new cracking unit that will start operation in the first quarter of next year.
The new plants will gradually start producing 400,000 tonnes of linear lowdensity polyethylene, 300,000 tonnes of low-density polyethylene and 500,000 tonnes of high-density polyethylene.
"Luckily, these new plants are not included in the 76 affected projects suspended by the court in Map Ta Phut, so they can go on as scheduled," he said.
Despite a new polymer plant opening in the Middle East, which will add more than 5 million tonnes to the market next year, a revived regional economy should absorb the new supply, he said.
PTTCH signed a memorandum of understanding yesterday with SMC Cor-poration Ltd, a local moulding machinery producer, in a bid to co-develop high-efficiency plastic pallets.
The partners will co-develop plastic products to better serve demand and seek ways to cut losses in the production process.
"Using their plastic moulding machinery will accelerate the development of products to meet our clients' requirements," said Mr Veerasak.
"Instead of starting a price war during fierce competition, research and development is a better option for sustainable business development."
PTTCH reported lower third-quarter sales by 1% to 23.46 billion baht from 23.64 billion a year earlier, while net profit decreased 43% to 2.82 billion (1.88 baht a share) from 4.92 billion baht (3.29 baht a share) in line with sliding petrochemical prices.
For the nine-month period, net profit was 4.56 billion baht (3.05 baht a share),a drop from 15.92 billion (10.94 baht a share) in the same period last year.Despite the decline, its shares only dropped 75 satang to 72.5 baht yesterday in trade worth 448.38 million.
PTTCH's parent company, PTT Plc,reported a 5% drop in its third-quarter net profit to 16.99 billion baht, in line with forecasts, due to lower contributions from its exploration and refinery businesses.
Nine-month consolidated net profit was 44.37 billion baht (15.69 baht a share), a decline of 40% from 73.9 billion (26.21 baht a share) in the same period last year.
Results in the fourth quarter are expected to be hit by lower earnings from subsidiary PTTEP due to an oil leak at Montara field near Australia, analysts said. Next year's outlook will also depend partly on how the government resolves the dispute over the Map Ta Phut industrial estate, where the PTT Group is a major investor.
Shares of PTT closed yesterday at 250 baht, up two baht, in trade worth 1.73 billion baht, while PTTEP closed at 144 baht, up 4.5 baht, in trade worth 1.8 billion baht.
Sunday, November 8, 2009
THE VIEWS OF A PIONEERING BUSINESSWOMAN
Molly Zhang has become one of the first Chinese female executives to head the major operations of a multinational company in Thailand.
In February, she was appointed country manager of Dow Chemical Thailand and managing director of the SCG-Dow Group, together representing the largest investment hub in Asia for Dow, one of the world's biggest chemical companies. The appointment followed a career in chemical engineering spanning the globe.
In a wide-ranging interview with The Nation's Pichaya Changsorn, she discussed engineering careers for women, the petrochemical industry and her management principles, as a well as her perspective on the Thai and Chinese cultures.
Please brief us on your background.
I was born and raised in Shanghai. In 1981, when I was 20 years old, I was fortunate to receive a scholarship to study in Germany. I wanted to be a journalist, but my parents always wanted me to be an engineer. In the 1970s, China had just opened its foor to the world. We realised how backward our industry was. China was going to face industrialisation, and my parents realised an engineer would have a bright future.
Are you the first Asian woman to rise to a top position at Down Chemical?
In Dow, we have a lot of senior women executives. My last boss was a woman. But in Asia, there are not too many woman executives in manufacturing. Manufacturing has traditionally been viewed as a male-dominated profession. However, we are now hiring a lot of women engineers. Currently, in Thailand, half of new hiring of engineers at Map Ta Phut [where most of Dow's plants are located] are women.
Has it been difficult for an Asian women to cut the clutter in this profession?
It depends on where you are. Twenty years ago, a woman engineer was very rare. But it's not like that today. We have a lot of support systems. We have mentoring, coaching and networks for women to be connected.
What was the most challenging thing you faced in your career?
I'm not somebody who worried a lot. I just come in and focus on my hobs, so life has been relatively easy. Because I have an excellent education, I got a good job, and the job has never been too difficult for me. What was challenging for me was that having finished the fancy education, I came to the company and realised I actually had to start over again. The technical part was easy, but university doesn't really teach you how to develop soft skills; leadership skills. Like ho to run a meeting, how to manage your time, how to manage conflicts with your colleagues.
How have you proved yourself?
You have to do more than just meet expectations. This is true not only for women, but also for men: if you're ambitious in your career goals, you must always excel and do better than expected.
Do you have to work harder?
I don't know. I always loved my work, so I never really feel like it was a big deal. I loved to do well. One of my phisolophies in life is to be the best. I want to be the best at work and at home; to be the best mom, the best wife, the best manager, the best employee. And the company gives me a very supportive environment. They keep me challenged all the time.
What are your management principles?
I'm very focused person. So what I like to do first is to set goals for myself and agree on goals for the organisation. And I believe in teamwork; I believe one plus one is bigger than two. I also believe in open, direct communication. But to provide timely feedback, it has to go both ways. The scariest thing is if management is operating in the dark. People are very important to me. People are the differentiator in today's businesses. And a very important thing for me is customer focus. I think that without customers, we have noe reason to exist. Another very important group of stakeholders is communities. I worry about how to keep communities happy; how tp support the success of communities.
What do you think about Thai culture" Do you find yourself blending well with Thai culture?
No (laughing). That was a big mistake I once made. When I first came to Thailand, I thought: I'm an Asian, I'm Chinese, I can deal with Thai culture [Note: Zhang first came to Thailand in 2002 and for about four years was site director in charge of Dow's manufacturing operations at Map Ta Phut]. I soon learned Thai culture was quite different. I found Thais to be very polite, very nice, very indirect. They did not really want to give me too much bad news (laughing). So, you need to have very good connections within the organisation, with employees, to understand what's going on.
But I love me Thai culture. People are very balanced, very religious. I've learned a lot. For example, I used to be very active: let's make things happen, do things quickly. Thai people would all tell me: let's talk something over, let's think about it. Don't forget anything. Are we going to upset anybody? We spend a lot more time in planning. But once your get everybody's agreement, then they will make things happen.
What have you found to be the most challenging aspect of working here?
The most challengint thing is to change myself. Because I still think that compared with Thais, I am very direct. I really have to learn how to listen. If you don't listen, the people just watch you talk: you're all by yourself. I don't think I can change Thai culture, and because I'm not in the business of changing Thai culture, it's important for me to understand every member of my team. Because I have to ensure that every team member can perform well and maximise his or her potential.
Could there be something you would like to change about your staff?
As I mentioned before, what's important to me is good teamwork, because I think every one of us is very smart in certain areas. We need to have a culture in which we help each other to make decisions. We have to be open to debate about what solution is best for the company. When I first came to Thailand, I found that was rather difficult to achieve. We're very good individually, but to see us challenging each other and saying which ideas are the best ... it took me some work.
Another thing that I tried to change was recognistion. Thais are very shy and do not really like to give compliments openly. We made it an unwritten rule that in every team meeting, we would recognise someone who did something well. One of the very fundamental management tools is giving people positive feedback. And this way - when something happens for a long time - we can make it part of the organisation's culture. That's very effective.
How is Dow performing in Thailand?
It's performing well. Asia is really the growh engine which will drive the global economy out of the downturn. We're seeing that in our industry and in our company us well. Everybody was doing so horribly last year - all the profits made in the first three quarters were wiped out in the fourth quarter. We're doing a couple-of-hundred-per-cent better than last year. Over the long term, we're committed to Thailand. We'd like to double our sales within the next couple of years.
Will China succeed Thailand as the largest operation in Asia for Dow?
On, absolutely. China is working full stream, on much bigger investments. In a couple of years, yes, absolutely, with many projects going on.
Thailand has a unique competitive advantage, which is access to natural gas. It doesn't need to ship raw materials from the Middle East. Another very strong point is Thailand has excellent local talent. The engineers are brilliant. The technicians have outstanding work ethics and the education system is very Westernised compared to some other Asian countries. But we're facing some challenges and we have to manage our operations well, because today's competition is worse than ever. Even Vietnam is now attracting the petrochemical industry.
In February, she was appointed country manager of Dow Chemical Thailand and managing director of the SCG-Dow Group, together representing the largest investment hub in Asia for Dow, one of the world's biggest chemical companies. The appointment followed a career in chemical engineering spanning the globe.
In a wide-ranging interview with The Nation's Pichaya Changsorn, she discussed engineering careers for women, the petrochemical industry and her management principles, as a well as her perspective on the Thai and Chinese cultures.
Please brief us on your background.
I was born and raised in Shanghai. In 1981, when I was 20 years old, I was fortunate to receive a scholarship to study in Germany. I wanted to be a journalist, but my parents always wanted me to be an engineer. In the 1970s, China had just opened its foor to the world. We realised how backward our industry was. China was going to face industrialisation, and my parents realised an engineer would have a bright future.
Are you the first Asian woman to rise to a top position at Down Chemical?
In Dow, we have a lot of senior women executives. My last boss was a woman. But in Asia, there are not too many woman executives in manufacturing. Manufacturing has traditionally been viewed as a male-dominated profession. However, we are now hiring a lot of women engineers. Currently, in Thailand, half of new hiring of engineers at Map Ta Phut [where most of Dow's plants are located] are women.
Has it been difficult for an Asian women to cut the clutter in this profession?
It depends on where you are. Twenty years ago, a woman engineer was very rare. But it's not like that today. We have a lot of support systems. We have mentoring, coaching and networks for women to be connected.
What was the most challenging thing you faced in your career?
I'm not somebody who worried a lot. I just come in and focus on my hobs, so life has been relatively easy. Because I have an excellent education, I got a good job, and the job has never been too difficult for me. What was challenging for me was that having finished the fancy education, I came to the company and realised I actually had to start over again. The technical part was easy, but university doesn't really teach you how to develop soft skills; leadership skills. Like ho to run a meeting, how to manage your time, how to manage conflicts with your colleagues.
How have you proved yourself?
You have to do more than just meet expectations. This is true not only for women, but also for men: if you're ambitious in your career goals, you must always excel and do better than expected.
Do you have to work harder?
I don't know. I always loved my work, so I never really feel like it was a big deal. I loved to do well. One of my phisolophies in life is to be the best. I want to be the best at work and at home; to be the best mom, the best wife, the best manager, the best employee. And the company gives me a very supportive environment. They keep me challenged all the time.
What are your management principles?
I'm very focused person. So what I like to do first is to set goals for myself and agree on goals for the organisation. And I believe in teamwork; I believe one plus one is bigger than two. I also believe in open, direct communication. But to provide timely feedback, it has to go both ways. The scariest thing is if management is operating in the dark. People are very important to me. People are the differentiator in today's businesses. And a very important thing for me is customer focus. I think that without customers, we have noe reason to exist. Another very important group of stakeholders is communities. I worry about how to keep communities happy; how tp support the success of communities.
What do you think about Thai culture" Do you find yourself blending well with Thai culture?
No (laughing). That was a big mistake I once made. When I first came to Thailand, I thought: I'm an Asian, I'm Chinese, I can deal with Thai culture [Note: Zhang first came to Thailand in 2002 and for about four years was site director in charge of Dow's manufacturing operations at Map Ta Phut]. I soon learned Thai culture was quite different. I found Thais to be very polite, very nice, very indirect. They did not really want to give me too much bad news (laughing). So, you need to have very good connections within the organisation, with employees, to understand what's going on.
But I love me Thai culture. People are very balanced, very religious. I've learned a lot. For example, I used to be very active: let's make things happen, do things quickly. Thai people would all tell me: let's talk something over, let's think about it. Don't forget anything. Are we going to upset anybody? We spend a lot more time in planning. But once your get everybody's agreement, then they will make things happen.
What have you found to be the most challenging aspect of working here?
The most challengint thing is to change myself. Because I still think that compared with Thais, I am very direct. I really have to learn how to listen. If you don't listen, the people just watch you talk: you're all by yourself. I don't think I can change Thai culture, and because I'm not in the business of changing Thai culture, it's important for me to understand every member of my team. Because I have to ensure that every team member can perform well and maximise his or her potential.
Could there be something you would like to change about your staff?
As I mentioned before, what's important to me is good teamwork, because I think every one of us is very smart in certain areas. We need to have a culture in which we help each other to make decisions. We have to be open to debate about what solution is best for the company. When I first came to Thailand, I found that was rather difficult to achieve. We're very good individually, but to see us challenging each other and saying which ideas are the best ... it took me some work.
Another thing that I tried to change was recognistion. Thais are very shy and do not really like to give compliments openly. We made it an unwritten rule that in every team meeting, we would recognise someone who did something well. One of the very fundamental management tools is giving people positive feedback. And this way - when something happens for a long time - we can make it part of the organisation's culture. That's very effective.
How is Dow performing in Thailand?
It's performing well. Asia is really the growh engine which will drive the global economy out of the downturn. We're seeing that in our industry and in our company us well. Everybody was doing so horribly last year - all the profits made in the first three quarters were wiped out in the fourth quarter. We're doing a couple-of-hundred-per-cent better than last year. Over the long term, we're committed to Thailand. We'd like to double our sales within the next couple of years.
Will China succeed Thailand as the largest operation in Asia for Dow?
On, absolutely. China is working full stream, on much bigger investments. In a couple of years, yes, absolutely, with many projects going on.
Thailand has a unique competitive advantage, which is access to natural gas. It doesn't need to ship raw materials from the Middle East. Another very strong point is Thailand has excellent local talent. The engineers are brilliant. The technicians have outstanding work ethics and the education system is very Westernised compared to some other Asian countries. But we're facing some challenges and we have to manage our operations well, because today's competition is worse than ever. Even Vietnam is now attracting the petrochemical industry.
Wednesday, November 4, 2009
PTTCH sees volume lift driving sales
PTT Chemical Plc (PTTCH), the country's largest olefins maker, expects higher sales volume for its petrochemical products to drive profits up next year and says it is looking to expand in Southeast Asian markets.
Margins between product prices and feedstock improved in the third quarter from the second but this year's net profit would still be less than the 11.7 billion baht posted in 2008, CEO Veerasak Kositpaisal said in an interview.
PTTCH makes ethylene and propylene, together called olefins, used in the manufacture of plastics. With a market capitalisation of 93 billion baht, it is number one in Southeast Asia, ahead of Malaysia's Batu Kawan and Thai Plastic and Chemicals.
"If our product spread manages to stay at this level, with our new output coming in, net profit in 2010 will be higher than this year," Mr Veerasak said.
Citing current margins between highdensity polyethylene (HDPE), which is ethylene-based, and naphtha of about $500 a tonne, he said 2010 revenue would rise to more than 100 billion baht.
Its new ethylene cracker, with an annual capacity of one million tonnes a year, was on schedule for a startup in the fourth quarter of this year or the first quarter next year, lifting production capacity to 2.8 million tonnes, Mr Veerasak said. It will be the largest in the region.
Sixteen analysts polled by the earnings tracker Thomson Reuters I/B/E/S forecast a 65% rise in 2010 profit to 10.2 billion baht on sales of 108.3 billion.They forecast 6.2 billion baht in profit for 2009.
Its efforts to introduce power-saving,cost-cutting programmes this year would help the company save as much as 1 billion baht a year, Mr Veerasak said.
"Having said that, we're not looking to beat net profit last year, when product spreads peaked with the HDPE price about $1,700 to $1,800 a tonne," he said.
With cash flow of 5-6 billion baht and a debt-to-equity ratio of less than 0.5 times, PTTCH is seeking foreign investment opportunities in Southeast Asian countries where there is growth potential and business cultures are similar.
The company, which has set aside 60 billion baht for future investment, wants to expand its regional presence in a bid to compete better with China's Sinopec and Exxon of the United States.
Its last deal dates back to July 2008,when it spent 104 million to buy a 50%stake in a Malaysian oleochemicals firm,now renamed Emery Oleochemicals,from the German chemicals maker Cognis. The other 50% is held by Malaysia's Sime Darby, the world's largest listed palm oil producer.
Mr Veerasak expressed concern over Map Ta Phut, the country's biggest industrial estate, where the courts have ordered some operations to stop because of environmental concerns.
If the problem was not solved, it would hurt the company's operations and profitability over the long term, he said.
Kim Eng Securities forecast that the 2010 earnings of PTTCH could decline by up to 25% if its projects at Map Ta Phut remained suspended.
PTTCH shares closed on Friday on the Stock Exchange of Thailand at 62.50 baht, up 50 satang, in trade worth 444.1 million baht.
Margins between product prices and feedstock improved in the third quarter from the second but this year's net profit would still be less than the 11.7 billion baht posted in 2008, CEO Veerasak Kositpaisal said in an interview.
PTTCH makes ethylene and propylene, together called olefins, used in the manufacture of plastics. With a market capitalisation of 93 billion baht, it is number one in Southeast Asia, ahead of Malaysia's Batu Kawan and Thai Plastic and Chemicals.
"If our product spread manages to stay at this level, with our new output coming in, net profit in 2010 will be higher than this year," Mr Veerasak said.
Citing current margins between highdensity polyethylene (HDPE), which is ethylene-based, and naphtha of about $500 a tonne, he said 2010 revenue would rise to more than 100 billion baht.
Its new ethylene cracker, with an annual capacity of one million tonnes a year, was on schedule for a startup in the fourth quarter of this year or the first quarter next year, lifting production capacity to 2.8 million tonnes, Mr Veerasak said. It will be the largest in the region.
Sixteen analysts polled by the earnings tracker Thomson Reuters I/B/E/S forecast a 65% rise in 2010 profit to 10.2 billion baht on sales of 108.3 billion.They forecast 6.2 billion baht in profit for 2009.
Its efforts to introduce power-saving,cost-cutting programmes this year would help the company save as much as 1 billion baht a year, Mr Veerasak said.
"Having said that, we're not looking to beat net profit last year, when product spreads peaked with the HDPE price about $1,700 to $1,800 a tonne," he said.
With cash flow of 5-6 billion baht and a debt-to-equity ratio of less than 0.5 times, PTTCH is seeking foreign investment opportunities in Southeast Asian countries where there is growth potential and business cultures are similar.
The company, which has set aside 60 billion baht for future investment, wants to expand its regional presence in a bid to compete better with China's Sinopec and Exxon of the United States.
Its last deal dates back to July 2008,when it spent 104 million to buy a 50%stake in a Malaysian oleochemicals firm,now renamed Emery Oleochemicals,from the German chemicals maker Cognis. The other 50% is held by Malaysia's Sime Darby, the world's largest listed palm oil producer.
Mr Veerasak expressed concern over Map Ta Phut, the country's biggest industrial estate, where the courts have ordered some operations to stop because of environmental concerns.
If the problem was not solved, it would hurt the company's operations and profitability over the long term, he said.
Kim Eng Securities forecast that the 2010 earnings of PTTCH could decline by up to 25% if its projects at Map Ta Phut remained suspended.
PTTCH shares closed on Friday on the Stock Exchange of Thailand at 62.50 baht, up 50 satang, in trade worth 444.1 million baht.
Wednesday, October 28, 2009
CARBON-CREDIT FIRST
IRPC, a major petrochemical and energy firm, yesterday signed agreements with GE Energy and GE carbon in connection with its investment plan for a 220-megawatt combined heat and power plant worth about US$200 million (Bt6.7 billion) in Rayong province.
The project will be the country's first carbon-credit trade as far as a largescale power plant is concerned, said IRPC president Pairin Choochotetavorn.
IRPC's 20-year-old power plant is currently fuelled by bunker oil to generate electricity, causing a great deal of pollution due to the release of carbon dioxide into the atmosphere.
This will be replaced by the new combined heat and power plant, which will use natural gas and generate 420 tonnes of steam per hour.
Pairin said the 220MW plant, which will be operational in early 2011, will reduce CO2 emission by about 400,000 tonnes per year.
As a result, the project is qualified to join the global carbon-trading scheme, as it will contribute to a reduction in global warming.
At present, a tonne of CO2 is traded at around $15. The global credittrading scheme is expected to be operational in the next eight months.
IRPC signed the del with GE Energy to buy gas turbines and other equipment for the new power plant.
It also appointed GE Carbon as adviser for the project to sell its carbon credits in the international market as part of the Clean Development Mechanism.
Given its scale, IRPC's project will contribute to getting on for a half of the reduction in CO2 releases targeted by the Energy Ministry, which aims to cut the Kingdom's emissions by an overall 1 million tonnes per year in the initial stage.
Satish Kashyap, director of GE Carbon, said a total of 525 projects had been certified worldwide for the sale of carbon credits.
Thailand currently has only 24 of these projects, while China has proposed more than 600 and India 500. Malaysia has 30 projects and South Korea, 33.
Pairin said the IRPC facilities were not situated in the pollution-control areas designated by the Central Administrative Court, which recently issed an injunction on 76 industrial projects in Map Ta Phut and other parts of Rayong. However, the company would be affected if PTT were to revise its investment plans in the pollutioncontrol areas, he added.
The project will be the country's first carbon-credit trade as far as a largescale power plant is concerned, said IRPC president Pairin Choochotetavorn.
IRPC's 20-year-old power plant is currently fuelled by bunker oil to generate electricity, causing a great deal of pollution due to the release of carbon dioxide into the atmosphere.
This will be replaced by the new combined heat and power plant, which will use natural gas and generate 420 tonnes of steam per hour.
Pairin said the 220MW plant, which will be operational in early 2011, will reduce CO2 emission by about 400,000 tonnes per year.
As a result, the project is qualified to join the global carbon-trading scheme, as it will contribute to a reduction in global warming.
At present, a tonne of CO2 is traded at around $15. The global credittrading scheme is expected to be operational in the next eight months.
IRPC signed the del with GE Energy to buy gas turbines and other equipment for the new power plant.
It also appointed GE Carbon as adviser for the project to sell its carbon credits in the international market as part of the Clean Development Mechanism.
Given its scale, IRPC's project will contribute to getting on for a half of the reduction in CO2 releases targeted by the Energy Ministry, which aims to cut the Kingdom's emissions by an overall 1 million tonnes per year in the initial stage.
Satish Kashyap, director of GE Carbon, said a total of 525 projects had been certified worldwide for the sale of carbon credits.
Thailand currently has only 24 of these projects, while China has proposed more than 600 and India 500. Malaysia has 30 projects and South Korea, 33.
Pairin said the IRPC facilities were not situated in the pollution-control areas designated by the Central Administrative Court, which recently issed an injunction on 76 industrial projects in Map Ta Phut and other parts of Rayong. However, the company would be affected if PTT were to revise its investment plans in the pollutioncontrol areas, he added.
IRPC invests $200m in plant efficiency
IRPC Plc will invest US$200 million to improve the efficiency of its power plant in Rayong, shifting from fuel oil to a gascombined cycle system to cut carbon emissions by 400,000 tonnes per year.
The new 220-megawatt combinedcycle power plant is expected to start operating at the end of next year after a delay of nearly one year, said CEO Pailin Chuchottaworn.
As the new technology allows the plant cut greenhouse gases, the company in-tends to register the plant under the UN's clean development mechanism (CDM) in order to sell carbon credits.
IRPC has appointed General Carbon Pte, a unit of US-based General Electric,as its consultant on carbon trading and the registration process.
The company expects to start selling carbon credits within eight months.
"Upgrading our power plant will not only improve our production cost, but also will prevent damage from power disruptions that have happened quite often lately in Rayong," said Dr Pailin."We can also gain some revenue from carbon trading."
In the past two years IRPC has had five power outages, each costing it 100 million baht."We couldn't stand losses like that anymore since every time the power drops we have to burn crude and chemicals that were in the production line. Otherwise these liquids could turn into bombs and then the damage would be even worse. But the burning creates bad smells that bother nearby communities," he said.
The power plant is a part of the first phase of a $288.7-million, five-year investment plan that began in 2007. Other elements include downstream petrochemical product expansion and safety system improvements.
IRPC is considering revising its $1.184-billion second-phase investment budget because of the global slowdown. This includes deep-sea port upgrading, improvements to oil-refining facilities and downstream chemical expansion.
IRPC shares closed yesterday on the SET at 4.36 baht, down two satang, in trade worth 302.6 million baht.
The new 220-megawatt combinedcycle power plant is expected to start operating at the end of next year after a delay of nearly one year, said CEO Pailin Chuchottaworn.
As the new technology allows the plant cut greenhouse gases, the company in-tends to register the plant under the UN's clean development mechanism (CDM) in order to sell carbon credits.
IRPC has appointed General Carbon Pte, a unit of US-based General Electric,as its consultant on carbon trading and the registration process.
The company expects to start selling carbon credits within eight months.
"Upgrading our power plant will not only improve our production cost, but also will prevent damage from power disruptions that have happened quite often lately in Rayong," said Dr Pailin."We can also gain some revenue from carbon trading."
In the past two years IRPC has had five power outages, each costing it 100 million baht."We couldn't stand losses like that anymore since every time the power drops we have to burn crude and chemicals that were in the production line. Otherwise these liquids could turn into bombs and then the damage would be even worse. But the burning creates bad smells that bother nearby communities," he said.
The power plant is a part of the first phase of a $288.7-million, five-year investment plan that began in 2007. Other elements include downstream petrochemical product expansion and safety system improvements.
IRPC is considering revising its $1.184-billion second-phase investment budget because of the global slowdown. This includes deep-sea port upgrading, improvements to oil-refining facilities and downstream chemical expansion.
IRPC shares closed yesterday on the SET at 4.36 baht, down two satang, in trade worth 302.6 million baht.
Tuesday, October 20, 2009
TMB buyer loans for PTTPM dealers
TMB Bank has entered into an agreement with PTT Polymer Marketing, a PTT subsidiary manufacturing plastic pellets, to support PTTPM's dealers with buyer loans.
The partnership is for TMB to provide PTTPM's dealers with its Maxi OD for Buyer, an overdraft facility that promises a high credit line at a low interest rate, for the purchase of plastic pellets. Maxi OD for Buyer offers dealers additional purchasing power at a lower cost.
The dealers also benefit from OD's payment convenience and flexibility unmatched by other types of loans. Dealers also have good credibility since they can immediately make timely payment to PTTPM through TMB SME's Maxi OD for Buyer. And with TMB's introduction of a real-time online system combining order placement with supply-chain management in full circle, PTTPM and its dealers are able to carry out transactions and keep tabs on their progress all the time. Boontuck Wungcharoen, chief executive officer of TMB, said after the signing ceremony yesterday that Maxi ODfFor Buyer offered a new option for PTTPM's dealers. The product initiative was developed out of a realisation that efficient financing would increase liquidity and funds vital to business success in the current environment.
The financial support is consistent with TMB's commitment to advancing all sizes of SMEs, he added.
"I believe our service will be one of the factors strengthening Thailand's business sector, and we will never stop thinking and offering choices to meet the needs of all our customer groups in line with our customer-centric approach," he said.
Pramin Phantaweesak, PTTPM's managing director, said Maxi OD for Buyer represented one of many financial initiatives the company had prepared for dealers and buyers of its products in and outside Thailand.
It will help them accomplish their business mission of selling PTT brands of polymer products such as InnoPlus, for which PTTPM's production capacity will reach 1.6 million tonnes next year, said Pramin.
The partnership is for TMB to provide PTTPM's dealers with its Maxi OD for Buyer, an overdraft facility that promises a high credit line at a low interest rate, for the purchase of plastic pellets. Maxi OD for Buyer offers dealers additional purchasing power at a lower cost.
The dealers also benefit from OD's payment convenience and flexibility unmatched by other types of loans. Dealers also have good credibility since they can immediately make timely payment to PTTPM through TMB SME's Maxi OD for Buyer. And with TMB's introduction of a real-time online system combining order placement with supply-chain management in full circle, PTTPM and its dealers are able to carry out transactions and keep tabs on their progress all the time. Boontuck Wungcharoen, chief executive officer of TMB, said after the signing ceremony yesterday that Maxi ODfFor Buyer offered a new option for PTTPM's dealers. The product initiative was developed out of a realisation that efficient financing would increase liquidity and funds vital to business success in the current environment.
The financial support is consistent with TMB's commitment to advancing all sizes of SMEs, he added.
"I believe our service will be one of the factors strengthening Thailand's business sector, and we will never stop thinking and offering choices to meet the needs of all our customer groups in line with our customer-centric approach," he said.
Pramin Phantaweesak, PTTPM's managing director, said Maxi OD for Buyer represented one of many financial initiatives the company had prepared for dealers and buyers of its products in and outside Thailand.
It will help them accomplish their business mission of selling PTT brands of polymer products such as InnoPlus, for which PTTPM's production capacity will reach 1.6 million tonnes next year, said Pramin.
Tuesday, October 13, 2009
Magnificent seven
In the most important, most revered event since the invention of the brontosaurus trap,Microsoft shipped the most incredibly fabulous operating system ever made; the release of Windows 7 also spurred a new generation of personal computers of all sizes at prices well below last month's offers.The top reason Windows 7 does not suck: There is no registered website called Windows7Sucks.com
Kindle e-book reader maker Amazon.com and new Nook e-book reader vendor Barnes and Noble got it on; B&N got great reviews for the "Kindle killer"Nook, with dual screens and touch controls so you can "turn" pages, plays MP3s and allows many non-B&N book formats, although not the Kindle one;Amazon then killed the US version of its Kindle in favour of the international one, reduced its price to $260(8,700 baht), same as the Nook; it's not yet clear what you can get in Thailand with a Nook, but you sure can't (yet) get much, relatively speaking, with a Kindle;but here's the biggest difference so far,which Amazon.com has ignored: the Nook lets you lend e-books to any other Nook owner, just as if they were paper books; the borrowed books expire on the borrower's Nook in two weeks.
Phone maker Nokia of Finland announced it is suing iPhone maker Apple of America for being a copycat; lawyers said they figure Nokia can get at least one, probably two per cent (retail) for every iPhone sold by Steve "President for Life" Jobs and crew via the lawsuit,which sure beats working for it -$6 (200 baht) to $12(400 baht) on 30 million phones sold so far, works out to $400 million or 25 percent of the whole Apple empire profits during the last quarter;there were 10 patent thefts, the Finnish executives said, on everything from moving data to security and encryption.
Nokia of Finland announced that it is one month behind on shipping its new flagship N900 phone, the first to run on Linux software; delay of the $750(25,000 baht) phone had absolutely no part in making Nokia so short that it had to sue Apple, slap yourself for such a thought.
Tim Berners-Lee, who created the World Wide Web, said he had one regret:the double slash that follows the "http:"in standard web addresses; he estimated that 14.2 gazillion users have wasted 48.72 bazillion hours typing those two keystrokes, and he's sorry; of course there's no reason to ever type that, since your browser does it for you when you type "www.bangkokpost.com" but Tim needs to admit he made one error in his lifetime.
The International Telecommunication Union of the United Nations, which doesn't sell any phones or services, announced that there should be a mobile phone charger that will work with any phone; now who would ever have thought of that, without a UN body to wind up a major study on the subject?;the GSM Association estimates that 51,000 tonnes of chargers are made each year in order to keep companies able to have their own unique ones.
The Well, Doh Award of the Week was presented at arm's length to the United Nations Conference on Trade and Development; the group's deputy secretary-general Petko Draganov said that developing countries will miss some of the stuff available on the Internet if they don't install more broadband infrastructure; a report that used your tax baht to compile said that quite a few people use mobile phones but companies are more likely to invest in countries with excellent broadband connections; no one ever had thought of this before, right?
Sun Microsystems , as a result of the Oracle takeover, said it will allow 3,000 current workers never to bother coming to work again; Sun referred to the losses as "jobs," not people; now the fourth largest server maker in the world, Sun said it lost $2.2 billion in its last fiscal year; European regulators are holding up approval of the Oracle purchase in the hope of getting some money in exchange for not involving Oracle in court cases.
The multi-gazillionaire and very annoying investor Carl Icahn resigned from the board at Yahoo ; he spun it as a vote of confidence, saying current directors are taking the formerly threatened company seriously; Yahoo reported increased profits but smaller revenues in the third quarter.
The US House of Representatives voted to censure Vietnam for jailing bloggers; the non-binding resolution sponsored by southern California congresswoman Loretta Sanchez said the Internet is "a crucial tool for the citizens of Vietnam to be able to exercise their freedom of expression and association;"Hanoi has recently jailed at least nine activists for up to six years apiece for holding pro-democracy banners. Iran jailed blogger Hossein "Hoder" Derakshan for 10 months - in solitary confinement.
Kindle e-book reader maker Amazon.com and new Nook e-book reader vendor Barnes and Noble got it on; B&N got great reviews for the "Kindle killer"Nook, with dual screens and touch controls so you can "turn" pages, plays MP3s and allows many non-B&N book formats, although not the Kindle one;Amazon then killed the US version of its Kindle in favour of the international one, reduced its price to $260(8,700 baht), same as the Nook; it's not yet clear what you can get in Thailand with a Nook, but you sure can't (yet) get much, relatively speaking, with a Kindle;but here's the biggest difference so far,which Amazon.com has ignored: the Nook lets you lend e-books to any other Nook owner, just as if they were paper books; the borrowed books expire on the borrower's Nook in two weeks.
Phone maker Nokia of Finland announced it is suing iPhone maker Apple of America for being a copycat; lawyers said they figure Nokia can get at least one, probably two per cent (retail) for every iPhone sold by Steve "President for Life" Jobs and crew via the lawsuit,which sure beats working for it -$6 (200 baht) to $12(400 baht) on 30 million phones sold so far, works out to $400 million or 25 percent of the whole Apple empire profits during the last quarter;there were 10 patent thefts, the Finnish executives said, on everything from moving data to security and encryption.
Nokia of Finland announced that it is one month behind on shipping its new flagship N900 phone, the first to run on Linux software; delay of the $750(25,000 baht) phone had absolutely no part in making Nokia so short that it had to sue Apple, slap yourself for such a thought.
Tim Berners-Lee, who created the World Wide Web, said he had one regret:the double slash that follows the "http:"in standard web addresses; he estimated that 14.2 gazillion users have wasted 48.72 bazillion hours typing those two keystrokes, and he's sorry; of course there's no reason to ever type that, since your browser does it for you when you type "www.bangkokpost.com" but Tim needs to admit he made one error in his lifetime.
The International Telecommunication Union of the United Nations, which doesn't sell any phones or services, announced that there should be a mobile phone charger that will work with any phone; now who would ever have thought of that, without a UN body to wind up a major study on the subject?;the GSM Association estimates that 51,000 tonnes of chargers are made each year in order to keep companies able to have their own unique ones.
The Well, Doh Award of the Week was presented at arm's length to the United Nations Conference on Trade and Development; the group's deputy secretary-general Petko Draganov said that developing countries will miss some of the stuff available on the Internet if they don't install more broadband infrastructure; a report that used your tax baht to compile said that quite a few people use mobile phones but companies are more likely to invest in countries with excellent broadband connections; no one ever had thought of this before, right?
Sun Microsystems , as a result of the Oracle takeover, said it will allow 3,000 current workers never to bother coming to work again; Sun referred to the losses as "jobs," not people; now the fourth largest server maker in the world, Sun said it lost $2.2 billion in its last fiscal year; European regulators are holding up approval of the Oracle purchase in the hope of getting some money in exchange for not involving Oracle in court cases.
The multi-gazillionaire and very annoying investor Carl Icahn resigned from the board at Yahoo ; he spun it as a vote of confidence, saying current directors are taking the formerly threatened company seriously; Yahoo reported increased profits but smaller revenues in the third quarter.
The US House of Representatives voted to censure Vietnam for jailing bloggers; the non-binding resolution sponsored by southern California congresswoman Loretta Sanchez said the Internet is "a crucial tool for the citizens of Vietnam to be able to exercise their freedom of expression and association;"Hanoi has recently jailed at least nine activists for up to six years apiece for holding pro-democracy banners. Iran jailed blogger Hossein "Hoder" Derakshan for 10 months - in solitary confinement.
Friday, October 9, 2009
IRPC invests $200m in plant efficiency
IRPC Plc will invest US$200 million to improve the efficiency of its power plant in Rayong, shifting from fuel oil to a gascombined cycle system to cut carbon emissions by 400,000 tonnes per year.
The new 220-megawatt combinedcycle power plant is expected to start operating at the end of next year after a delay of nearly one year, said CEO Pailin Chuchottaworn.
As the new technology allows the plant cut greenhouse gases, the company in-tends to register the plant under the UN's clean development mechanism (CDM) in order to sell carbon credits.
IRPC has appointed General Carbon Pte, a unit of US-based General Electric,as its consultant on carbon trading and the registration process.
The company expects to start selling carbon credits within eight months.
"Upgrading our power plant will not only improve our production cost, but also will prevent damage from power disruptions that have happened quite often lately in Rayong," said Dr Pailin."We can also gain some revenue from carbon trading."
In the past two years IRPC has had five power outages, each costing it 100 million baht."We couldn't stand losses like that anymore since every time the power drops we have to burn crude and chemicals that were in the production line. Otherwise these liquids could turn into bombs and then the damage would be even worse. But the burning creates bad smells that bother nearby communities," he said.
The power plant is a part of the first phase of a $288.7-million, five-year investment plan that began in 2007. Other elements include downstream petrochemical product expansion and safety system improvements.
IRPC is considering revising its $1.184-billion second-phase investment budget because of the global slowdown. This includes deep-sea port upgrading, improvements to oil-refining facilities and downstream chemical expansion.
IRPC shares closed yesterday on the SET at 4.36 baht, down two satang, in trade worth 302.6 million baht.
The new 220-megawatt combinedcycle power plant is expected to start operating at the end of next year after a delay of nearly one year, said CEO Pailin Chuchottaworn.
As the new technology allows the plant cut greenhouse gases, the company in-tends to register the plant under the UN's clean development mechanism (CDM) in order to sell carbon credits.
IRPC has appointed General Carbon Pte, a unit of US-based General Electric,as its consultant on carbon trading and the registration process.
The company expects to start selling carbon credits within eight months.
"Upgrading our power plant will not only improve our production cost, but also will prevent damage from power disruptions that have happened quite often lately in Rayong," said Dr Pailin."We can also gain some revenue from carbon trading."
In the past two years IRPC has had five power outages, each costing it 100 million baht."We couldn't stand losses like that anymore since every time the power drops we have to burn crude and chemicals that were in the production line. Otherwise these liquids could turn into bombs and then the damage would be even worse. But the burning creates bad smells that bother nearby communities," he said.
The power plant is a part of the first phase of a $288.7-million, five-year investment plan that began in 2007. Other elements include downstream petrochemical product expansion and safety system improvements.
IRPC is considering revising its $1.184-billion second-phase investment budget because of the global slowdown. This includes deep-sea port upgrading, improvements to oil-refining facilities and downstream chemical expansion.
IRPC shares closed yesterday on the SET at 4.36 baht, down two satang, in trade worth 302.6 million baht.
Monday, October 5, 2009
Ruling may cost PTT 10% of earnings
The earnings of PTT Group and its subsidiaries may fall 10% in 2010 due to court-ordered construction delays at its projects in the Map Ta Phut industrial estate in Rayong, according to Thanachart Securities.
The court ruling, which affects 76 industrial projects, could also delay PTT's planned consolidation of its petrochemical units, the brokerage said yesterday.
"If construction of PTT's sixth gas separation plant cannot finish by the first or second quarter of next year, the group's net profit in 2010 will be lower than the forecast," said Pichai Lertsupongkit, senior vice-president at Thanachart.
The brokerage earlier forecast PTT's earnings would reach 78.13 billion baht next year, up from an estimated 54.88 billion this year.
The 25 PTT projects affected by the court ruling in-B54.88bn clude PTTCH's one-million-tonne ethylene cracker, which was expected to start in the final quarter of 2009. In the worst-case scenario, PTTCH's new cracker and downstream businesses could be delayed from the original schedule to the end of 2010, slicing almost 36% from forecast earnings of 8.66 billion baht.
Without its oil upgrading unit, PTTAR,an oil refining and petrochemical maker,could fall 5% short of its projected earnings of 11.6 billion baht, Thanachart said in its report released yesterday.
The uncertainty continues to hang over the share prices of PTT, PTTAR,PTTCH and Siam Cement, another m-
jor industrial conglomerate affected by the ruling, the report said.B78.13bn
"It's highly likely the announcement of merger deals among PTT associates could be delayed further primarily due to the court order to suspend various projects of PTTAR and PTTCH."
The suspension means the revision of valuations and swap ratios of these firms, the report added.
"We believe the private sector should be protected as they have followed the government agencies' rules," it added.
PTTAR executives yesterday declined to give a figure for the impact of the court decision, saying the affected companies could not evaluate the size of damages with the current information.
"We don't even know what we can do, what we cannot do and what we have to do," said Chainoi Puankosoom,chief executive of PTTAR.
"Each subsidiary of PTT is examining the court ruling in detail in order to evaluate the actual damages. We can't say anything otherwise we will be considered as bad guys. It's the government's responsibility to clear the issue."
The company is considering how to cope with the effects of the operations'suspension, he added."We will talk with our contractors for the US$220-million upgrading project to consider our case as force majeure , as it was beyond our control. We hope they may understand and will not be to harsh in suing us," said Mr Chainoi.
Construction on the upgrade was due to start by the year-end and operations were planned to start in 2011, he said.
The Energy Ministry will also have to put off the new Euro 4 emission standard to 2011, since the upgraded oil refining units that could meet the standard cannot operate due to the court's ruling.
"We are ready to do anything whether they [the environmentalists and the court] want us to go ahead, or make a new EIA (environmental impact assessment), health impact assessment or do both EIA and HIA, just say it. So far we are stuck. Everything seems very uncertain," said Mr Chainoi.
PTT shares closed yesterday on the SET at 258 baht, down three baht, in trade worth 767.5 million baht. PTTAR fell 40 satang to 24.10 baht.
The court ruling, which affects 76 industrial projects, could also delay PTT's planned consolidation of its petrochemical units, the brokerage said yesterday.
"If construction of PTT's sixth gas separation plant cannot finish by the first or second quarter of next year, the group's net profit in 2010 will be lower than the forecast," said Pichai Lertsupongkit, senior vice-president at Thanachart.
The brokerage earlier forecast PTT's earnings would reach 78.13 billion baht next year, up from an estimated 54.88 billion this year.
The 25 PTT projects affected by the court ruling in-B54.88bn clude PTTCH's one-million-tonne ethylene cracker, which was expected to start in the final quarter of 2009. In the worst-case scenario, PTTCH's new cracker and downstream businesses could be delayed from the original schedule to the end of 2010, slicing almost 36% from forecast earnings of 8.66 billion baht.
Without its oil upgrading unit, PTTAR,an oil refining and petrochemical maker,could fall 5% short of its projected earnings of 11.6 billion baht, Thanachart said in its report released yesterday.
The uncertainty continues to hang over the share prices of PTT, PTTAR,PTTCH and Siam Cement, another m-
jor industrial conglomerate affected by the ruling, the report said.B78.13bn
"It's highly likely the announcement of merger deals among PTT associates could be delayed further primarily due to the court order to suspend various projects of PTTAR and PTTCH."
The suspension means the revision of valuations and swap ratios of these firms, the report added.
"We believe the private sector should be protected as they have followed the government agencies' rules," it added.
PTTAR executives yesterday declined to give a figure for the impact of the court decision, saying the affected companies could not evaluate the size of damages with the current information.
"We don't even know what we can do, what we cannot do and what we have to do," said Chainoi Puankosoom,chief executive of PTTAR.
"Each subsidiary of PTT is examining the court ruling in detail in order to evaluate the actual damages. We can't say anything otherwise we will be considered as bad guys. It's the government's responsibility to clear the issue."
The company is considering how to cope with the effects of the operations'suspension, he added."We will talk with our contractors for the US$220-million upgrading project to consider our case as force majeure , as it was beyond our control. We hope they may understand and will not be to harsh in suing us," said Mr Chainoi.
Construction on the upgrade was due to start by the year-end and operations were planned to start in 2011, he said.
The Energy Ministry will also have to put off the new Euro 4 emission standard to 2011, since the upgraded oil refining units that could meet the standard cannot operate due to the court's ruling.
"We are ready to do anything whether they [the environmentalists and the court] want us to go ahead, or make a new EIA (environmental impact assessment), health impact assessment or do both EIA and HIA, just say it. So far we are stuck. Everything seems very uncertain," said Mr Chainoi.
PTT shares closed yesterday on the SET at 258 baht, down three baht, in trade worth 767.5 million baht. PTTAR fell 40 satang to 24.10 baht.
Friday, October 2, 2009
BIG INVESTORS SEEK WAYS TO MITIGATE PAIN OF INJUNCTION
Petrochemical companies are brainstorming to ease difficulties arising from the Central Administrative Court's injunction against 76 industrial projects, while the government has not yet filed an appeal to allow the projects to proceed.
PTT chief financial officer Tevin Vongvanich said yesterday that the brainstorming session would also involve Siam Cement Group and the Federation of Thai Industries.
"If the court does not accept the government's appeal, we as sufferers may ask the court for relaxation," he said.
Surayuth Phettrakul, vice industry minister, said the Attorney-General's Office was completing the appeal, which could be submitted to the court today - or Monday at the latest.
He said the Industry Ministry wanted to be thorough, but would do its best to file the appeal, or the ruling would further affect investor confidence.
Executives of PTT and its subsidiaries yesterday expressed grave concern over the delay of their 25 projects - planned by eight companies and with a combined investment of Bt120 billion - particularly the sixth gas-separation plant and the project to meet the Euro IV emission standard.
Most of the projects are slated for completion from late this year through to 2012.
PTT president and CEO Prasert Bunsumpun said the injunction affected confidence, job creation and the pace of industrial development, as well as the overall economy.
He insisted the group had done its very best to cooperate in controlling pollution in Rayong and had taken into account local communities' demands. He expects a win-win solution for all parties.
To Tevin, the delay in the gas-separation plant, which is 90 per cent completed and waiting for an operating licence, will have a negative supply-chain effect on subsidiaries and creditors aside from delaying jobs related to the projects.
Some subsidiaries, which are waiting for raw materials, would need to import the items instead.
Meanwhile, the Euro IV project delay could prevent the group's refinery from meeting the 2012 deadline as prescribed by the Energy Ministry.
As key subsidiaries like PTT Chemical and PTT Aromatics and Refining could be financially affected, the group may need to review their value and conclude its planned consolidation later than this month's original schedule, Tevin said.
Chainoi Puankosoom, CEO of PTT Aromatics and Refining, said he would call for a meeting with refiners next week for a consensus in delaying the Euro IV deadline.
The company's environment-upgrade project is slated for completion in December 2011, but the injunction means the project would never be able to meet the deadline.
Stock analysts have revised down the earnings forecasts for listed companies that are affected by the order, particularly PTT Chemical and Siam Cement.
According to Asia Plus Securities, on assumption that commercial operation would be delayed by a year, PTT Chemical is expected to be affected the most, with a 35-per-cent drop in its 2010 earnings projection. Siam Cement's earnings projection has been cut by 11 per cent.
Veerasak Kositpaisal, president of PTT Chemical, which has eight of the projects, worth a combined Bt13 billion, said petrochemical prices were changing rapidly and this required fast adjustment. "Thailand's plastic-product export value is now Bt90 billion, against a Bt120-billion value for plastic-pellet exports. What we're doing now is to produce more added-value products, which could push the combined export value above Bt300 billion," he said.
Veteran investment banker Kongkiat Opaswongkarn also urged speedy action on the government, saying that the injunction would damage the country's image and may affect its credit rating. He said it was a very critical issue, as the ruling went against Thailand's policy to attract investment and this confirmed the country's management failure over the past three years.
Srisuwan Chanya, president of the Anti-Global Warming Association, which is one of the plaintiffs in the case against government units that led to the injunction, said the association would lodge a counter-appeal against the government's appeal as soon as the latter was filed. He said the government should instead speed up the establishment of an independent environment body and issue health-impact assessment guidelines.
In the next two weeks, the group is also filing a charge against Industry Minister Charnchai Chairungrueng for putting only eight industries on the ministry's list of projects with serious impacts, against the proposed list of 19.
PTT chief financial officer Tevin Vongvanich said yesterday that the brainstorming session would also involve Siam Cement Group and the Federation of Thai Industries.
"If the court does not accept the government's appeal, we as sufferers may ask the court for relaxation," he said.
Surayuth Phettrakul, vice industry minister, said the Attorney-General's Office was completing the appeal, which could be submitted to the court today - or Monday at the latest.
He said the Industry Ministry wanted to be thorough, but would do its best to file the appeal, or the ruling would further affect investor confidence.
Executives of PTT and its subsidiaries yesterday expressed grave concern over the delay of their 25 projects - planned by eight companies and with a combined investment of Bt120 billion - particularly the sixth gas-separation plant and the project to meet the Euro IV emission standard.
Most of the projects are slated for completion from late this year through to 2012.
PTT president and CEO Prasert Bunsumpun said the injunction affected confidence, job creation and the pace of industrial development, as well as the overall economy.
He insisted the group had done its very best to cooperate in controlling pollution in Rayong and had taken into account local communities' demands. He expects a win-win solution for all parties.
To Tevin, the delay in the gas-separation plant, which is 90 per cent completed and waiting for an operating licence, will have a negative supply-chain effect on subsidiaries and creditors aside from delaying jobs related to the projects.
Some subsidiaries, which are waiting for raw materials, would need to import the items instead.
Meanwhile, the Euro IV project delay could prevent the group's refinery from meeting the 2012 deadline as prescribed by the Energy Ministry.
As key subsidiaries like PTT Chemical and PTT Aromatics and Refining could be financially affected, the group may need to review their value and conclude its planned consolidation later than this month's original schedule, Tevin said.
Chainoi Puankosoom, CEO of PTT Aromatics and Refining, said he would call for a meeting with refiners next week for a consensus in delaying the Euro IV deadline.
The company's environment-upgrade project is slated for completion in December 2011, but the injunction means the project would never be able to meet the deadline.
Stock analysts have revised down the earnings forecasts for listed companies that are affected by the order, particularly PTT Chemical and Siam Cement.
According to Asia Plus Securities, on assumption that commercial operation would be delayed by a year, PTT Chemical is expected to be affected the most, with a 35-per-cent drop in its 2010 earnings projection. Siam Cement's earnings projection has been cut by 11 per cent.
Veerasak Kositpaisal, president of PTT Chemical, which has eight of the projects, worth a combined Bt13 billion, said petrochemical prices were changing rapidly and this required fast adjustment. "Thailand's plastic-product export value is now Bt90 billion, against a Bt120-billion value for plastic-pellet exports. What we're doing now is to produce more added-value products, which could push the combined export value above Bt300 billion," he said.
Veteran investment banker Kongkiat Opaswongkarn also urged speedy action on the government, saying that the injunction would damage the country's image and may affect its credit rating. He said it was a very critical issue, as the ruling went against Thailand's policy to attract investment and this confirmed the country's management failure over the past three years.
Srisuwan Chanya, president of the Anti-Global Warming Association, which is one of the plaintiffs in the case against government units that led to the injunction, said the association would lodge a counter-appeal against the government's appeal as soon as the latter was filed. He said the government should instead speed up the establishment of an independent environment body and issue health-impact assessment guidelines.
In the next two weeks, the group is also filing a charge against Industry Minister Charnchai Chairungrueng for putting only eight industries on the ministry's list of projects with serious impacts, against the proposed list of 19.
Wednesday, September 30, 2009
PLASTIC FIRMS TO PROTEST I'NESIAN DUTY
The government and plastics producers will file a case to the World Trade Organisation complaining of an unfair investigation and imposition by Indonesia of a high anti-dumping duty on Thai-made BOPP plastic film.
The Indonesian government had already imposed a provisional anti-dumping duty on Thai BOPP (biaxially oriented polypropylene) products of 21.86 per cent from May 8 to September 8 - against the normal duty rate of 5 per cent - citing that the products were being dumped and were therefore damaging its local industry.
It is now imposing an effective anti-dumping duty of 21.86 per cent on Thai BOPP film from today, with the new rate scheduled to be in place for five years.
Thai BOPP film exports to Indonesia plunged by 62 per cent to Bt355 million during the four months of the provisional anti-dumping duty.
Komite Anti Dumping Indonesia (KADI) has unfairly investigated the Thai plastic products, as the organisation has not probed BOPP products from China, which is another major exporter to Indonesia, Nilsuwan Leelarasamee, secretary to the Federation of Thai Industries (FTI), said yesterday.
He said the FTI and the Foreign Trade Department would soon file a petition to the WTO alleging an unfair ruling by the Indonesian government.
"The Indonesian government has unjustly investigated and imposed an anti-dumping duty on Thai BOPP film. As Indonesian companies have been taken over by Chinese plastics firms, its government has not investigated China's BOPP film exports to Indonesia," said Nilsuwan.
To impose a fair anti-dumping duty, Jakarta must also include the export value from China, he added, but only Thai BOPP film faced a provisional - and now full - anti-dumping duty. According to the FTI, the unfairly imposed duty will create a loss of Bt1.2 billion for Thai BOPP film exports per year.
The Indonesian government had already imposed a provisional anti-dumping duty on Thai BOPP (biaxially oriented polypropylene) products of 21.86 per cent from May 8 to September 8 - against the normal duty rate of 5 per cent - citing that the products were being dumped and were therefore damaging its local industry.
It is now imposing an effective anti-dumping duty of 21.86 per cent on Thai BOPP film from today, with the new rate scheduled to be in place for five years.
Thai BOPP film exports to Indonesia plunged by 62 per cent to Bt355 million during the four months of the provisional anti-dumping duty.
Komite Anti Dumping Indonesia (KADI) has unfairly investigated the Thai plastic products, as the organisation has not probed BOPP products from China, which is another major exporter to Indonesia, Nilsuwan Leelarasamee, secretary to the Federation of Thai Industries (FTI), said yesterday.
He said the FTI and the Foreign Trade Department would soon file a petition to the WTO alleging an unfair ruling by the Indonesian government.
"The Indonesian government has unjustly investigated and imposed an anti-dumping duty on Thai BOPP film. As Indonesian companies have been taken over by Chinese plastics firms, its government has not investigated China's BOPP film exports to Indonesia," said Nilsuwan.
To impose a fair anti-dumping duty, Jakarta must also include the export value from China, he added, but only Thai BOPP film faced a provisional - and now full - anti-dumping duty. According to the FTI, the unfairly imposed duty will create a loss of Bt1.2 billion for Thai BOPP film exports per year.
Map Ta Phut ruling hits SET
Share prices of companies in the networks of PTT Plc and Siam Cement Group fell in a range of 1% to 7% during trading yesterday as the country's leading industrial conglomerates faced a new blow over unsettled pollution problems at Map Ta Phut.
Among the 76 projects worth 400 billion baht ordered to halt construction by the Administrative Court on Tuesday,25 are being developed by subsidiaries and affiliates of PTT, said PTT chief financial officer Tevin Vongvanich.
These ongoing projects include a sixth gas separation plant, due to be operational by the end of this year,petrochemical plants, and an upgraded refinery to meet Euro 4 emission standards.
The court ordered the suspension of operating permits for new investments in Map Ta Phut Industrial Estate in Rayong, following an outcry from environmental activists and residents who claim the permits violated Section 67 of the 2007 Constitution.
"The (temporary) suspension of these projects will affect our trading and contract partners, financial institutions, and related industries across the supply chain. Moreover, it will put at risk over 100,000 jobs, including hiring in [Map Ta Phut]," Mr Tevin said.
"We are planning to hold talks with concerned government agencies to seek ways to soften the impact from the court's ruling, or we may lodge an appeal."
Siam Cement said the court order would force its wholly owned subsidiary,SCG Chemicals, to halt nearly completed construction of its upstream naphtha cracker, as well as projects of its downstream subsidiaries and joint-venture units, expected to be completed between late 2009 to mid-2011.
"In this regard, SCC will be working closely with all relevant government authorities to jointly conclude a solution for all concerned parties, while minimising any effect on SCG Chemicals'investment projects," president and chief executive Kan Trakulhoon said in a statement to the Stock Exchange of Thailand yesterday.
Also affected is SET-listed Glow Energy, whose 660-megawatt power plant is likely to be postponed.
Kim Eng Securities said the court was expected to review the case immediately when an appeal is lodged.
"This issue cannot drag on for long because it will affect the sentiment of the stock market in general," said a Kim Eng spokesman.
However, Bualuang Securities said the court ruling was unlikely to push the overall index down even though it caused a sudden shock.
"This news represents a negative
surprise and is certainly a near-term headwind against the stock of any company with facilities in or near Map Ta Phut," Bualuang said.
Surong Bualakula, senior executive vice-president for the international business unit of PTT, said Thailand's competitiveness had been crimped by the Map Ta Phut case.
The development could prompt PTT to look at neighbouring countries such as Cambodia, which has larger natural gas and oil reserves, as well as a pipeline network. The Cambodian government is considering a plan to build an energy complex in Sihanoukville, he said.
"Map Ta Phut is the centre of Thailand's industrial development region with a competitive advantage in the gas-based petrochemical industry," Mr Surong said."What downstream manufacturers or automakers will invest in Thailand now because they cannot be sure if they will have enough raw materials in the future?"
Shares of Siam Cement (SCC) closed yesterday at 222 baht, down 5 baht, in trade worth 1.11 billion. PTT shares rose 3 baht, but PTTAR fell 1.10 baht to 24.40 in trade worth 1.7 billion while PTTCH fell 4 baht to 73.25 in trade worth 844 million. GLOW fell 1.75 baht to 32.75 in trade worth 135 million.
Among the 76 projects worth 400 billion baht ordered to halt construction by the Administrative Court on Tuesday,25 are being developed by subsidiaries and affiliates of PTT, said PTT chief financial officer Tevin Vongvanich.
These ongoing projects include a sixth gas separation plant, due to be operational by the end of this year,petrochemical plants, and an upgraded refinery to meet Euro 4 emission standards.
The court ordered the suspension of operating permits for new investments in Map Ta Phut Industrial Estate in Rayong, following an outcry from environmental activists and residents who claim the permits violated Section 67 of the 2007 Constitution.
"The (temporary) suspension of these projects will affect our trading and contract partners, financial institutions, and related industries across the supply chain. Moreover, it will put at risk over 100,000 jobs, including hiring in [Map Ta Phut]," Mr Tevin said.
"We are planning to hold talks with concerned government agencies to seek ways to soften the impact from the court's ruling, or we may lodge an appeal."
Siam Cement said the court order would force its wholly owned subsidiary,SCG Chemicals, to halt nearly completed construction of its upstream naphtha cracker, as well as projects of its downstream subsidiaries and joint-venture units, expected to be completed between late 2009 to mid-2011.
"In this regard, SCC will be working closely with all relevant government authorities to jointly conclude a solution for all concerned parties, while minimising any effect on SCG Chemicals'investment projects," president and chief executive Kan Trakulhoon said in a statement to the Stock Exchange of Thailand yesterday.
Also affected is SET-listed Glow Energy, whose 660-megawatt power plant is likely to be postponed.
Kim Eng Securities said the court was expected to review the case immediately when an appeal is lodged.
"This issue cannot drag on for long because it will affect the sentiment of the stock market in general," said a Kim Eng spokesman.
However, Bualuang Securities said the court ruling was unlikely to push the overall index down even though it caused a sudden shock.
"This news represents a negative
surprise and is certainly a near-term headwind against the stock of any company with facilities in or near Map Ta Phut," Bualuang said.
Surong Bualakula, senior executive vice-president for the international business unit of PTT, said Thailand's competitiveness had been crimped by the Map Ta Phut case.
The development could prompt PTT to look at neighbouring countries such as Cambodia, which has larger natural gas and oil reserves, as well as a pipeline network. The Cambodian government is considering a plan to build an energy complex in Sihanoukville, he said.
"Map Ta Phut is the centre of Thailand's industrial development region with a competitive advantage in the gas-based petrochemical industry," Mr Surong said."What downstream manufacturers or automakers will invest in Thailand now because they cannot be sure if they will have enough raw materials in the future?"
Shares of Siam Cement (SCC) closed yesterday at 222 baht, down 5 baht, in trade worth 1.11 billion. PTT shares rose 3 baht, but PTTAR fell 1.10 baht to 24.40 in trade worth 1.7 billion while PTTCH fell 4 baht to 73.25 in trade worth 844 million. GLOW fell 1.75 baht to 32.75 in trade worth 135 million.
BANGKOK KBANK HELPS PTTPM BOOST ASIA EXPOSURE
PTT Polymer Marketing (PTTPM), a petrochemicals marketing arm of the PTT Group, is going ahead with its plan to achieve Bt100 billion in annual earnings by 2015 through a financial agreement with Bangkok Bank.
The deal, which was signed yesterday, binds BBL to provide financial and business support to PTTPM customers and dealers across Asia.
"Customers and dealers in other parts of Asia can take advantage of this service, which will provide them with the liquidity they need to expand their sales of PTTPM products. This way, we can support PTTPM as it expands outside Thailand," BBL president Chartsiri Sophonpanich explained.
Earlier, the bank had agreed to provide supply chain financing to PTTPM dealers within Thailand.
Under the newest deal, customers and dealers will be given improved access to liquidity, a reduction in delivery time as well as lower fees. No letter of credit would be required and customers can choose to do their transactions in any currency, which would make the process even more efficient.
PTTPM's marketing director Pramin Phantawesak said the company aims to raise its annual sales to Bt100 billion and hopes to become an international polymer trading house by 2015. PTTPM recently established representative offices in several Asian countries including Vietnam and China, as well as a sub-branch in Dubai. Bangkok Bank's branches in Thailand and overseas will help PTTPM achieve its growth target.
To maintain a robust growth of its business, the company had earlier cooperated with Kasikornbank to develop what it claims is the world's first electronic letter-of-credit system, providing greater convenience and accuracy for customers. Through BBL's Bualuang iSupply system, dealers can access online dealer payments and financial service.
PTTPM senior manager Narongchai Pisutpunya said earlier the electronic system would enhance productivity in these areas by up to six times and reduce operating costs by Bt25 million per year.
The deal, which was signed yesterday, binds BBL to provide financial and business support to PTTPM customers and dealers across Asia.
"Customers and dealers in other parts of Asia can take advantage of this service, which will provide them with the liquidity they need to expand their sales of PTTPM products. This way, we can support PTTPM as it expands outside Thailand," BBL president Chartsiri Sophonpanich explained.
Earlier, the bank had agreed to provide supply chain financing to PTTPM dealers within Thailand.
Under the newest deal, customers and dealers will be given improved access to liquidity, a reduction in delivery time as well as lower fees. No letter of credit would be required and customers can choose to do their transactions in any currency, which would make the process even more efficient.
PTTPM's marketing director Pramin Phantawesak said the company aims to raise its annual sales to Bt100 billion and hopes to become an international polymer trading house by 2015. PTTPM recently established representative offices in several Asian countries including Vietnam and China, as well as a sub-branch in Dubai. Bangkok Bank's branches in Thailand and overseas will help PTTPM achieve its growth target.
To maintain a robust growth of its business, the company had earlier cooperated with Kasikornbank to develop what it claims is the world's first electronic letter-of-credit system, providing greater convenience and accuracy for customers. Through BBL's Bualuang iSupply system, dealers can access online dealer payments and financial service.
PTTPM senior manager Narongchai Pisutpunya said earlier the electronic system would enhance productivity in these areas by up to six times and reduce operating costs by Bt25 million per year.
Sunday, September 27, 2009
VNT plans new plant worth B8bn
The SET-listed vinyl and chlor-alkali producer Vinythai Plc (VNT) will invest 8 billion baht to build a epichlorohydrin plant in Rayong following its acquisition of Solvay Biochemical Thailand Co (SBT).
The company's board has approved the buyout of SBT, the Thai unit of the Belgium-based Solvay group, in a deal worth 360 million baht, said Varaiporn Piphitpattanaprapt, vice-president for finance and accounting.
The acquisition would strengthen Vinythai's position in the business of environmentally friendly chemical compounds, she said.
The epichlorohydrin project was formerly planned by SBT but little work had been done. Vinythai will take over the project and build the new plant at its existing site. The 8 billion baht would cover production of epichlorohydrin and expansion of Vinylthai's hydrogen chloride and caustic soda capacity to ensure sufficient supplies of raw materials to the epichlorohydrin plant.
The main feedstock for epichlorohydrin production will be glycerin derived from the production of biofuels such as palm oil and other vegetable oils.
Ms Varaiporn said the new plant was scheduled to be operational in the first quarter of 2012, with an annual production capacity of 100,000 tonnes.
Demand is growing rapidly in AsiaPacific for epichlorohydrin, an essential feedstock for epoxy resins used in such applications as corrosion protection coatings, as well as the electronics, automotive, aerospace and power-generating windmill industries.
Vinythai views that the new project based on environmentally sustainable technology will raise its competitive advantage and enable the company to become a key player in the Asia-Pacific region in Epichlorohydrin business.
"The project will also diversify Vinythai's product range and add significant value to the company," she noted.
The investment is subject to approval from relevant governmental authorities and shareholders.
Solvay Chemicals and Plastics Holding B.V. is among the major shareholders of Vinythai with ownership of 49.99%, along with PTT Chemical Plc (24.98%), and Charoen Pokphand Group (11.87%).
VNT shares closed yesterday on the SET at 6.80 baht, up 10 satang.
The company's board has approved the buyout of SBT, the Thai unit of the Belgium-based Solvay group, in a deal worth 360 million baht, said Varaiporn Piphitpattanaprapt, vice-president for finance and accounting.
The acquisition would strengthen Vinythai's position in the business of environmentally friendly chemical compounds, she said.
The epichlorohydrin project was formerly planned by SBT but little work had been done. Vinythai will take over the project and build the new plant at its existing site. The 8 billion baht would cover production of epichlorohydrin and expansion of Vinylthai's hydrogen chloride and caustic soda capacity to ensure sufficient supplies of raw materials to the epichlorohydrin plant.
The main feedstock for epichlorohydrin production will be glycerin derived from the production of biofuels such as palm oil and other vegetable oils.
Ms Varaiporn said the new plant was scheduled to be operational in the first quarter of 2012, with an annual production capacity of 100,000 tonnes.
Demand is growing rapidly in AsiaPacific for epichlorohydrin, an essential feedstock for epoxy resins used in such applications as corrosion protection coatings, as well as the electronics, automotive, aerospace and power-generating windmill industries.
Vinythai views that the new project based on environmentally sustainable technology will raise its competitive advantage and enable the company to become a key player in the Asia-Pacific region in Epichlorohydrin business.
"The project will also diversify Vinythai's product range and add significant value to the company," she noted.
The investment is subject to approval from relevant governmental authorities and shareholders.
Solvay Chemicals and Plastics Holding B.V. is among the major shareholders of Vinythai with ownership of 49.99%, along with PTT Chemical Plc (24.98%), and Charoen Pokphand Group (11.87%).
VNT shares closed yesterday on the SET at 6.80 baht, up 10 satang.
VINYTHAI TO BUY SOLVAY THAI UNIT IN EPI PRODUCTION EXPANSION
Vinythai has earmarked Bt8 billion to expand production of epichlorohydrin (EPI)
Of tha,t Bt5.75 billion will be used to acquire Solvay Biochemicals (Thailand), a manufacturer of EPI and other chemical and plastic products.
Solvay, an international chemical and pharmaceutical company headquartered in Brussels, is a shareholder in both companies. It has operations worldwide, with annual revenus of US$9.2 billion (Bt309 billion)
In a filing with the Stock Exchange of Thailand, Vinythai said its board had approved the acquisition of the unit from Solvay Chemicals and Plastics Holding and the Solvay Group. Vinythathai said its board had approved the acquisiton of the unit from Solvay Chemicals and Plastics Holding and the Solvay Group. Vinythai will use the Solvay's Epicerol process, which can produce 100,000 tonnes of EPI a year.
The EPI project will be managed by a new subsidiary to be set up after Vinythai finishes acquiring Solvay Biochemicals (Thailand), the company said in the statement.
Under the capacity-increase plan, the compamy's board approved expenditure of Bt 2.25 billion to increase annual production fo chlorine by 90,000 tonnes and caustic soda by 100,00 tonnes, in order to support the EPI project.
Vinythai expects a rate of return of 15 per cent on the project. The company sees this investment as a way of redcuing the cyclical effects in the petrochemical industry, especially the PVC business.
Twenty per cent of the output will be sold domestically and the rest exported. Vinythai will finance the project with cash flow and bank loans.
Vinythai is now awaiting Board of the project.
The company's board approved expenditure of Bt2.25 billion to increase annual production of chlorine by 90,000 tonnes and caustic soda by 100,000 tonnes, in order to support the EPI project.
Of tha,t Bt5.75 billion will be used to acquire Solvay Biochemicals (Thailand), a manufacturer of EPI and other chemical and plastic products.
Solvay, an international chemical and pharmaceutical company headquartered in Brussels, is a shareholder in both companies. It has operations worldwide, with annual revenus of US$9.2 billion (Bt309 billion)
In a filing with the Stock Exchange of Thailand, Vinythai said its board had approved the acquisition of the unit from Solvay Chemicals and Plastics Holding and the Solvay Group. Vinythathai said its board had approved the acquisiton of the unit from Solvay Chemicals and Plastics Holding and the Solvay Group. Vinythai will use the Solvay's Epicerol process, which can produce 100,000 tonnes of EPI a year.
The EPI project will be managed by a new subsidiary to be set up after Vinythai finishes acquiring Solvay Biochemicals (Thailand), the company said in the statement.
Under the capacity-increase plan, the compamy's board approved expenditure of Bt 2.25 billion to increase annual production fo chlorine by 90,000 tonnes and caustic soda by 100,00 tonnes, in order to support the EPI project.
Vinythai expects a rate of return of 15 per cent on the project. The company sees this investment as a way of redcuing the cyclical effects in the petrochemical industry, especially the PVC business.
Twenty per cent of the output will be sold domestically and the rest exported. Vinythai will finance the project with cash flow and bank loans.
Vinythai is now awaiting Board of the project.
The company's board approved expenditure of Bt2.25 billion to increase annual production of chlorine by 90,000 tonnes and caustic soda by 100,000 tonnes, in order to support the EPI project.
"FORBES ASIA" SHOWS WEALTHIEST THAIS HAVE WEATHERED THE STORM
Thailand's wealthiest appear to have been quite resilient to the global economic downturn and political instability as beverage tycoon Chaleo Yoovidhya gets named the Kingdom's richest person for the third consecutive year, while millionaires in the food and agriculture businesses also enjoy boosts in their net worth.
The latest Forbes Asia's Thailand Rich list showed that the combined wealth of Thailand's 40 richest people remained unchanged at US$25 billion (Bt838.92 billion), with the net worth of 77-year old Chaleo, who co-founded Red Bull, also stayed flat at $4 billion.
The second man on the list was Dhanin Chearavanont, head of the agribusiness conglomerate Charoen Pokphand Group, one of the world's biggest feed and poultry companies. Dhanin, who moved up the ranking by two notches, is also the biggest gainer in dollar terms - his net worth rose by $1 billion to $3 billion.
Other tycoons in the food and agriculture businesses also enjoyed a boost in their net worth. Among them are sugar barons - Mitr Phol Sugar's Isara Vongkusolkit (eighth with $900 million) and Khon Kaen Sugar Industry's Nantha Chinthammit (18th with $360 million) - as well as seafood tycoon Kraisorn Chansiri (28th with $175 million).
Bucking the trend, however, was Charoen Sirivadhanabhakdi of Thai Beverage, whose net worth fell to $2.8 billion from $3.9 billion last year. Ranked fourth on the list, he also suffered the largest decline among his fellow tycoons.
The third richest in Thailand are descendants of the founder of Central Group, Tiang Chirathivat, including families of his three wives and 25 children. Their combined wealth rose by $100 million to $2.9 billion. Their shared net worth is largely derived from their ownership of Central Retail and their 60 per cent stake in listed developer, Central Pattana.
Still firmly in the limelight is Thaksin Shinawatra, who is the 16th richest with a net worth of $390 million, down from $400 million last year. The fugitive former PM is the 19th on the list who saw their net worth drop this year.
Also poorer is hospitality tycoon William E Heinecke who dropped five places to No 20 as his wealth of $350 million dropped by $110 million this year. Political turmoil and the global recession seem to have taken their toll on his business empire and personal net worth, but the irrepressible optimist moves on.
"You learn through every crisis, every challenge," Heinecke said in the latest issue of Forbes Asia.
This year's list has four new faces led by long-time Thai resident Aloke Lohia, who has the highest ranking at 19th with a net worth of $355 million. The 50-year old tycoon started Indorama Polymers, which earned $1.2 billion in sales last year.
Other newcomers include Worawit Weeraborwornpong of Siamgas and Petrochemicals (30th with $165 million) and lingerie magnate Virot Thanalongkorn (35th with $130 million). Both made their companies public last year before the markets tanked.
The fourth newcomer is Pongsak Viddayakorn, board member of Bangkok Dusit Medical Services, who was ranked 36th with $125 million.
When compiling the list, public assets were calculated using share prices and exchange rates as of September 10. For privately held wealth, Forbes Asia estimated what they would be worth using information from the Commerce Ministry and other sources. This ranking, unlike the Forbes' billionaires list includes family holdings shared by individuals and their children, grandchildren and siblings.
The latest Forbes Asia's Thailand Rich list showed that the combined wealth of Thailand's 40 richest people remained unchanged at US$25 billion (Bt838.92 billion), with the net worth of 77-year old Chaleo, who co-founded Red Bull, also stayed flat at $4 billion.
The second man on the list was Dhanin Chearavanont, head of the agribusiness conglomerate Charoen Pokphand Group, one of the world's biggest feed and poultry companies. Dhanin, who moved up the ranking by two notches, is also the biggest gainer in dollar terms - his net worth rose by $1 billion to $3 billion.
Other tycoons in the food and agriculture businesses also enjoyed a boost in their net worth. Among them are sugar barons - Mitr Phol Sugar's Isara Vongkusolkit (eighth with $900 million) and Khon Kaen Sugar Industry's Nantha Chinthammit (18th with $360 million) - as well as seafood tycoon Kraisorn Chansiri (28th with $175 million).
Bucking the trend, however, was Charoen Sirivadhanabhakdi of Thai Beverage, whose net worth fell to $2.8 billion from $3.9 billion last year. Ranked fourth on the list, he also suffered the largest decline among his fellow tycoons.
The third richest in Thailand are descendants of the founder of Central Group, Tiang Chirathivat, including families of his three wives and 25 children. Their combined wealth rose by $100 million to $2.9 billion. Their shared net worth is largely derived from their ownership of Central Retail and their 60 per cent stake in listed developer, Central Pattana.
Still firmly in the limelight is Thaksin Shinawatra, who is the 16th richest with a net worth of $390 million, down from $400 million last year. The fugitive former PM is the 19th on the list who saw their net worth drop this year.
Also poorer is hospitality tycoon William E Heinecke who dropped five places to No 20 as his wealth of $350 million dropped by $110 million this year. Political turmoil and the global recession seem to have taken their toll on his business empire and personal net worth, but the irrepressible optimist moves on.
"You learn through every crisis, every challenge," Heinecke said in the latest issue of Forbes Asia.
This year's list has four new faces led by long-time Thai resident Aloke Lohia, who has the highest ranking at 19th with a net worth of $355 million. The 50-year old tycoon started Indorama Polymers, which earned $1.2 billion in sales last year.
Other newcomers include Worawit Weeraborwornpong of Siamgas and Petrochemicals (30th with $165 million) and lingerie magnate Virot Thanalongkorn (35th with $130 million). Both made their companies public last year before the markets tanked.
The fourth newcomer is Pongsak Viddayakorn, board member of Bangkok Dusit Medical Services, who was ranked 36th with $125 million.
When compiling the list, public assets were calculated using share prices and exchange rates as of September 10. For privately held wealth, Forbes Asia estimated what they would be worth using information from the Commerce Ministry and other sources. This ranking, unlike the Forbes' billionaires list includes family holdings shared by individuals and their children, grandchildren and siblings.
Thursday, September 24, 2009
IRPC, PTTAR IN JOINT UPGRADE OF REFINERY TO MEET EURO 4
Local integrated oil and petrochemical producer IRPC will co-invest with PTT Aromatics and Refining to upgrade the latter's refinery to meet the Euro 4 standards.
The new standards will be implemented by the beginning of 2012.
"We'll swap oil products among the subsidiaries of the PTT Group and co-invest in the upgrading project of PTTAR's oil refinery. We've not yet finalised the form of the co-investment, but we are expected to make a minor investment in this project," said IRPC chief executive Pailin Chuchottaworn.
He declined to disclose the exact investment budget for the project.
Pailin said it would not be worth it to upgrade all of the facilities to meet Euro 4 standards, because then the remaining premium oil output, which would also be produced at high cost, would only be sent to other countries.
Thai Oil and Bangchak have already upgraded their facilities to comply with Euro 4 standards.
Meanwhile, IRPC has targeted revenue of Bt180 billion this year, down from Bt245 billion last year, due mainly to lower prices for oil and petrochemical products.
Seventy per cent of revenue will come from oil refining and the rest from petrochemicals.
Pailin said the third quarter would be better for the company than the second quarter, thanks to rising prices of oil and petrochemical goods.
He said the price of plastic pellets was about US$1,200 (Bt40,300) per tonne, up 20 per cent from the average in 2008, when oil and petrochemical prices fluctuated wildly.
He said the price for plastic pellets could remain at the $1,200 level next year.
"The price may tend to soften, due to greater supply from new production plants in the Middle East. But there's a chance demand will spike from the Shanghai Expo and the Asian Games in China," he said.
IRPC yesterday introduced an electronic transaction system, in cooperation with Kasikornbank, to boost customer satisfaction and the efficiency of its plastic trading system, since it exports to more than 100 countries.
He said the company was trying to improve its office system, which would play a significant role in enhancing business performance and helping achieve the goal of being in the top 25 per cent of Asian petrochemical complexes by 2014.
The new system will reduce operation costs by Bt30 million per year, he said.
The new standards will be implemented by the beginning of 2012.
"We'll swap oil products among the subsidiaries of the PTT Group and co-invest in the upgrading project of PTTAR's oil refinery. We've not yet finalised the form of the co-investment, but we are expected to make a minor investment in this project," said IRPC chief executive Pailin Chuchottaworn.
He declined to disclose the exact investment budget for the project.
Pailin said it would not be worth it to upgrade all of the facilities to meet Euro 4 standards, because then the remaining premium oil output, which would also be produced at high cost, would only be sent to other countries.
Thai Oil and Bangchak have already upgraded their facilities to comply with Euro 4 standards.
Meanwhile, IRPC has targeted revenue of Bt180 billion this year, down from Bt245 billion last year, due mainly to lower prices for oil and petrochemical products.
Seventy per cent of revenue will come from oil refining and the rest from petrochemicals.
Pailin said the third quarter would be better for the company than the second quarter, thanks to rising prices of oil and petrochemical goods.
He said the price of plastic pellets was about US$1,200 (Bt40,300) per tonne, up 20 per cent from the average in 2008, when oil and petrochemical prices fluctuated wildly.
He said the price for plastic pellets could remain at the $1,200 level next year.
"The price may tend to soften, due to greater supply from new production plants in the Middle East. But there's a chance demand will spike from the Shanghai Expo and the Asian Games in China," he said.
IRPC yesterday introduced an electronic transaction system, in cooperation with Kasikornbank, to boost customer satisfaction and the efficiency of its plastic trading system, since it exports to more than 100 countries.
He said the company was trying to improve its office system, which would play a significant role in enhancing business performance and helping achieve the goal of being in the top 25 per cent of Asian petrochemical complexes by 2014.
The new system will reduce operation costs by Bt30 million per year, he said.
IRPC to beat goal with B180bn sales
SET-listed IRPC Plc expects to beat its previous target for the year and top 180 billion baht in revenue due to strong petrochemical demand from China.
The country's leading petrochemical manufacturer and oil refiner now predicts its revenue will drop by 26% this year from the 244.7 billion baht earned in 2008.
But the company has performed much better in the current quarter as plastic resin is now priced at US$1,200 per tonne, up from $1,000 earlier, chief executive Pailin Chuchottaworn said yesterday.
"Our performance is obviously good in the current quarter and better than the second quarter. The business outlook is now brighter than what we saw earlier," said Dr Pailin.
IRPC, which is 37% owned by PTT Plc, now projects revenue of 180 billion baht this year based on oil at about $70 per barrel. In the quarter to June,the company posted a net profit of 2.42 billion baht, down from 5.12 billion in the same period last year, in line with a decline in revenue of 45% to 40.3 billion baht.
The petrochemical business will account for about 54 billion baht of this year's estimated revenue. The figure is expected to be maintained in 2010.
"Plastic prices will stay at $1,200 per tonne at best next year. The demand from China will remain strong but the outlook remains uncertain, depending largely on additional petrochemical capacities to come on stream next year,"he said.
IRPC is now utilising 75% of its refining capacity of 215,000 barrels per day.
The petrochemical spread has improved slightly in the current quarter from the previous quarter, while the refining margin has weakened marginally. The company's gross integrated margin is in double digits, said Banlue Chantadisai, senior executive vicepresident for corporate accounting and finance.
Average refining capacity is expected to stay at about 150,000 to 160,000 barrels per day in 2009, compared with 180,000 barrels last year. The existing output is enough to serve IRPC's petrochemical business.
Executives also said that IRPC was likely to go for a product swap option with PTT Aromatics and Refinery Plc,another PTT petrochemical and refining unit, to upgrade its refineries to meet the Euro 4 emissions standard.
The Euro 4 project is part of IRPC's $1.2 billion five-year investment plan to become a top integrated petrochemical producer in Asia by 2014.
PTT Plc, Thailand's largest energy company, has studied a merger of its petrochemical and refining affiliates including IRPC and PTTAR. The plan is expected to be finalised next month.
IRPC yesterday launched its "Ideal Solution" service to enable petrochemical trading transactions on personal digital assistants (PDA) worldwide. The system will help reduce operational costs by 30 million baht per year.
Shares of IRPC closed yesterday on the Stock Exchange of Thailand at 4.48 baht, down six satang, in trade worth 1.69 billion baht.
The country's leading petrochemical manufacturer and oil refiner now predicts its revenue will drop by 26% this year from the 244.7 billion baht earned in 2008.
But the company has performed much better in the current quarter as plastic resin is now priced at US$1,200 per tonne, up from $1,000 earlier, chief executive Pailin Chuchottaworn said yesterday.
"Our performance is obviously good in the current quarter and better than the second quarter. The business outlook is now brighter than what we saw earlier," said Dr Pailin.
IRPC, which is 37% owned by PTT Plc, now projects revenue of 180 billion baht this year based on oil at about $70 per barrel. In the quarter to June,the company posted a net profit of 2.42 billion baht, down from 5.12 billion in the same period last year, in line with a decline in revenue of 45% to 40.3 billion baht.
The petrochemical business will account for about 54 billion baht of this year's estimated revenue. The figure is expected to be maintained in 2010.
"Plastic prices will stay at $1,200 per tonne at best next year. The demand from China will remain strong but the outlook remains uncertain, depending largely on additional petrochemical capacities to come on stream next year,"he said.
IRPC is now utilising 75% of its refining capacity of 215,000 barrels per day.
The petrochemical spread has improved slightly in the current quarter from the previous quarter, while the refining margin has weakened marginally. The company's gross integrated margin is in double digits, said Banlue Chantadisai, senior executive vicepresident for corporate accounting and finance.
Average refining capacity is expected to stay at about 150,000 to 160,000 barrels per day in 2009, compared with 180,000 barrels last year. The existing output is enough to serve IRPC's petrochemical business.
Executives also said that IRPC was likely to go for a product swap option with PTT Aromatics and Refinery Plc,another PTT petrochemical and refining unit, to upgrade its refineries to meet the Euro 4 emissions standard.
The Euro 4 project is part of IRPC's $1.2 billion five-year investment plan to become a top integrated petrochemical producer in Asia by 2014.
PTT Plc, Thailand's largest energy company, has studied a merger of its petrochemical and refining affiliates including IRPC and PTTAR. The plan is expected to be finalised next month.
IRPC yesterday launched its "Ideal Solution" service to enable petrochemical trading transactions on personal digital assistants (PDA) worldwide. The system will help reduce operational costs by 30 million baht per year.
Shares of IRPC closed yesterday on the Stock Exchange of Thailand at 4.48 baht, down six satang, in trade worth 1.69 billion baht.
Wednesday, September 23, 2009
BASF BUILDS CENTRE TO HELP KARENS
BASF, a global chemical company, will provide Bt3.7 million to the Karen Kids Society to construct a youth centre for young adults in Ban Pa Deng, Petchaburi province.
The contribution, provided via the BASF Social Foundation, is aimed at improving the standard of living of local residents.
The Karen Kids Youth Centre will provide educational opportunities for young adults from the ethnic minority along with Thai residents, focusing on income generating activities such as handicraft skills.
The centre will also provide separate living and sanitation facilities. The construction of the 390-square-metre centre began last month and should be completed by the middle of next year.
Karen Kids Society president and founder Juergen Strafe said: "When we first discovered the children, they were living in a rat- and insect-infested hovel with a leaking roof.
"The dirt and smell were unimaginable. Today, they enjoy clean, healthy accommodation, with proper sanitation, freshly laundered bedding and a hygienic kitchen.
"The next step is to build a youth centre where older kids can learn a trade. Within a few years, they will be able to leave the camp and make a life for themselves using these new skills."
To Pracha Chivaporntip, chairman and managing director of the BASF Group in Thailand, the project in Ban Pa Deng is one of many the company has sponsored over the years as part of its sustainable development efforts.
With its existing education centre, Karen Kids provides shelter, education, clothing and food to more than 80 children aged 10 months to 14 years now living as displaced persons.
With a three-pronged plan focusing on education, health and self-reliance, the centre provides a place to meet, play, and study.
It also provides "child safe" Internet access. Each Saturday, the camp offers Thai-and English-language classes for children and adults.
A vaccination schedule is maintained, and children will be taught ways to improve their immune system.
A weaving programme, vegetable garden and a fishpond.
The first phase of the construction, together with a sleeping area for volunteers and camp managers, was completed last year.
Its second phase, with a two storey centre, will include training facilities for sewing, weaving and carpentry.
The contribution, provided via the BASF Social Foundation, is aimed at improving the standard of living of local residents.
The Karen Kids Youth Centre will provide educational opportunities for young adults from the ethnic minority along with Thai residents, focusing on income generating activities such as handicraft skills.
The centre will also provide separate living and sanitation facilities. The construction of the 390-square-metre centre began last month and should be completed by the middle of next year.
Karen Kids Society president and founder Juergen Strafe said: "When we first discovered the children, they were living in a rat- and insect-infested hovel with a leaking roof.
"The dirt and smell were unimaginable. Today, they enjoy clean, healthy accommodation, with proper sanitation, freshly laundered bedding and a hygienic kitchen.
"The next step is to build a youth centre where older kids can learn a trade. Within a few years, they will be able to leave the camp and make a life for themselves using these new skills."
To Pracha Chivaporntip, chairman and managing director of the BASF Group in Thailand, the project in Ban Pa Deng is one of many the company has sponsored over the years as part of its sustainable development efforts.
With its existing education centre, Karen Kids provides shelter, education, clothing and food to more than 80 children aged 10 months to 14 years now living as displaced persons.
With a three-pronged plan focusing on education, health and self-reliance, the centre provides a place to meet, play, and study.
It also provides "child safe" Internet access. Each Saturday, the camp offers Thai-and English-language classes for children and adults.
A vaccination schedule is maintained, and children will be taught ways to improve their immune system.
A weaving programme, vegetable garden and a fishpond.
The first phase of the construction, together with a sleeping area for volunteers and camp managers, was completed last year.
Its second phase, with a two storey centre, will include training facilities for sewing, weaving and carpentry.
EXCLUSIVE INTERVIEW: MELAMINE GIANT'S PASSAGE TO INDIA
Srithai Superware, the world's largest manufacturer of melamine tableware, plans to invest Bt200 million in its first melamine factory in New Delhi and will be pondering investments in other Indian cities such as Mumbai and Chennai.
"We see India as a potential market enjoying strong growth. Setting up the melamine factory in New Delhi will help us expand our distribution more easily," Sanan Angubolkul, the company's chairman, said.
"We expect to open at least four factories for melamine and other plastic products in India over the next 10 years," he added.
He told The Nation that the firm had recently opened its first trading office in New Delhi, which would be responsible for selling the products via direct-selling channels. The first lot of melamine products has already been shipped to New Delhi and will officially enter the market next month through a direct-selling network.
Srithai has been exporting melamine tableware to India for nearly three decades now through local importers and wholesalers, but this is the first time that it is directly penetrating the market.
The factory in New Delhi scheduled to open next year will produce 100 tonnes of melamine products per annum. Srithai owns 70 per cent of the business and local agents hold the rest.
Srithai has been operating a plastic factory in Vietnam's Ho Chi Minh City for nearly 13 years now, and the plant started producing melamine last year.
"We have big expansion plans for our manufacturing facilities for melamine and plastic products in both India and Vietnam, where we hold majority shares in the factories. In Ho Chi Minh, we own about 95 per cent of the stake," Sanan said.
He added that Srithai currently exported melamine products to more than 100 markets around the world and aims to become a world-class manufacturer for plastic products and top five plastic producers in Asia over the next five years. It also plans to make the most of the Asean free trade agreement, to be signed next year, under which import duty would be reduced to zero next year from the current 10 per cent.
Supporting this move is the new strategic initiative called "Change Management", which has been implemented for a year and a half now, and applied in all major development areas such as technology, productivity and innovation, both at the end product and manufacturing process. It also includes developing its employees into "world citizens".
Srithai's production facility is now 40 per cent automated and will be fully automated in the next five years.
At present, Srithai has four plants in Thailand manufacturing plastic and melamine products on Bangkok's Suksawad Road, Bangpoo Industrial Estate in Samut Prakan, Bangpakong Industrial Estate (Amata City) in Chon Buri and the Suranaree Industrial Estate in Nakhon Ratchasima.
Last year, it invested Bt800 million in upgrading machines to reduce energy consumption as well as installing a robotic system and automatic moulding. About Bt400 million has been set aside for upgrading local plants per annum. Since its earnings before interest, tax, depreciation and amortisation (EBITDA) are about Bt500 million a year, part of it would be used to finance the upgrade, Sanan said.
Srithai expects to achieve Bt5.1 billion in total sales this year, including export, which is a 35 per cent increase from Bt4.9 billion last year.
"We expect to increase our gross margin from last year's 19 per cent year to no less than 21 per cent this year. We also expect our total sales to reach Bt10 billion within the next five years," Sanan added.
"We see India as a potential market enjoying strong growth. Setting up the melamine factory in New Delhi will help us expand our distribution more easily," Sanan Angubolkul, the company's chairman, said.
"We expect to open at least four factories for melamine and other plastic products in India over the next 10 years," he added.
He told The Nation that the firm had recently opened its first trading office in New Delhi, which would be responsible for selling the products via direct-selling channels. The first lot of melamine products has already been shipped to New Delhi and will officially enter the market next month through a direct-selling network.
Srithai has been exporting melamine tableware to India for nearly three decades now through local importers and wholesalers, but this is the first time that it is directly penetrating the market.
The factory in New Delhi scheduled to open next year will produce 100 tonnes of melamine products per annum. Srithai owns 70 per cent of the business and local agents hold the rest.
Srithai has been operating a plastic factory in Vietnam's Ho Chi Minh City for nearly 13 years now, and the plant started producing melamine last year.
"We have big expansion plans for our manufacturing facilities for melamine and plastic products in both India and Vietnam, where we hold majority shares in the factories. In Ho Chi Minh, we own about 95 per cent of the stake," Sanan said.
He added that Srithai currently exported melamine products to more than 100 markets around the world and aims to become a world-class manufacturer for plastic products and top five plastic producers in Asia over the next five years. It also plans to make the most of the Asean free trade agreement, to be signed next year, under which import duty would be reduced to zero next year from the current 10 per cent.
Supporting this move is the new strategic initiative called "Change Management", which has been implemented for a year and a half now, and applied in all major development areas such as technology, productivity and innovation, both at the end product and manufacturing process. It also includes developing its employees into "world citizens".
Srithai's production facility is now 40 per cent automated and will be fully automated in the next five years.
At present, Srithai has four plants in Thailand manufacturing plastic and melamine products on Bangkok's Suksawad Road, Bangpoo Industrial Estate in Samut Prakan, Bangpakong Industrial Estate (Amata City) in Chon Buri and the Suranaree Industrial Estate in Nakhon Ratchasima.
Last year, it invested Bt800 million in upgrading machines to reduce energy consumption as well as installing a robotic system and automatic moulding. About Bt400 million has been set aside for upgrading local plants per annum. Since its earnings before interest, tax, depreciation and amortisation (EBITDA) are about Bt500 million a year, part of it would be used to finance the upgrade, Sanan said.
Srithai expects to achieve Bt5.1 billion in total sales this year, including export, which is a 35 per cent increase from Bt4.9 billion last year.
"We expect to increase our gross margin from last year's 19 per cent year to no less than 21 per cent this year. We also expect our total sales to reach Bt10 billion within the next five years," Sanan added.
Indorama plans delisting
Indorama Polymers, the SET-listed PET resin maker will seek delisting once its Indian-based parent company, Indorama Ventures (IVL), has completed acquiring it through a share swap option.
IVL will make an initial public offering of its new shares, make a tender offer for all shares of IRP held by other shareholders by swapping them with its new shares and subsequently delist IRP from the Stock Exchange of Thailand, according to the company's statement filed with the SET yesterday.
Existing IRP shareholders will become IVL shareholders through the process.
Under the restructuring plan, IVL share price is calculated by dividing the reference IRP share price of 14 baht per share by the swap ratio at one IRP share per 1.23 IVL shares.
For the swap ratio, IVL will calculate the ratio by dividing the reference IRP share price of 14 baht per share by the IPO price with a 3% discount.
The whole process should be finished by the end of October.
IRP now has 1.38 million shares. IVL,its major shareholder with 69.29%, conducts business through petrochemicalmaking subsidiaries.
The company's operations in 13 plants in five countries have increased significantly since 2003.
IRP shareholders will meet on the restructuring plan on Oct 26, with the share register to attend fixed on Oct 5.
Shares of IRP closed on the Stock Exchange of Thailand at 13.40 baht,up 90 satang, in trade worth 249.9 million baht.
IVL will make an initial public offering of its new shares, make a tender offer for all shares of IRP held by other shareholders by swapping them with its new shares and subsequently delist IRP from the Stock Exchange of Thailand, according to the company's statement filed with the SET yesterday.
Existing IRP shareholders will become IVL shareholders through the process.
Under the restructuring plan, IVL share price is calculated by dividing the reference IRP share price of 14 baht per share by the swap ratio at one IRP share per 1.23 IVL shares.
For the swap ratio, IVL will calculate the ratio by dividing the reference IRP share price of 14 baht per share by the IPO price with a 3% discount.
The whole process should be finished by the end of October.
IRP now has 1.38 million shares. IVL,its major shareholder with 69.29%, conducts business through petrochemicalmaking subsidiaries.
The company's operations in 13 plants in five countries have increased significantly since 2003.
IRP shareholders will meet on the restructuring plan on Oct 26, with the share register to attend fixed on Oct 5.
Shares of IRP closed on the Stock Exchange of Thailand at 13.40 baht,up 90 satang, in trade worth 249.9 million baht.
Wednesday, September 16, 2009
Bayer names Dutchman as next CEO
The German chemical and pharmaceutical company Bayer AG announced yesterday that it had tapped Marijn Dekkers to take over as its chief executive in October 2010.
Dekkers,51, who has both Dutch and US citizenship, is currently the head of Waltham, Massachusetts-based laboratory equipment maker Thermo Fisher Scientific Inc.
Current CEO Werner Wenning, who extended his contract by eight months until next September, will step down shortly before his 64th birthday.
The company said Dekkers would join its management board at the beginning of 2010. It said that in a transitional phase he also will be the chief executive of its Bayer HealthCare unit - succeeding Arthur Higgins, who is leaving the company during the first half of 2010"for personal reasons.
Dekkers,51, who has both Dutch and US citizenship, is currently the head of Waltham, Massachusetts-based laboratory equipment maker Thermo Fisher Scientific Inc.
Current CEO Werner Wenning, who extended his contract by eight months until next September, will step down shortly before his 64th birthday.
The company said Dekkers would join its management board at the beginning of 2010. It said that in a transitional phase he also will be the chief executive of its Bayer HealthCare unit - succeeding Arthur Higgins, who is leaving the company during the first half of 2010"for personal reasons.
Monday, September 14, 2009
TPC upbeat on 2010 earnings
Thai Plastic and Chemicals, Southeast Asia's largest PVC maker, said yesterday it was optimistic about 2010 earnings as demand should recover due to government stimulus measures.
It should also expand its capacity once the transfer of some output to a Vietnamese plant is completed.
"We're more confident about 2010,largely because we believe things such as volume and demand will rise after the economy has bottomed out this year,"said managing director Kanet Khaochan.
But the market leader, which is 45%owned by top Thai conglomerate Siam Cement and whose main rivals are unlisted Indonesian firm PT Asahimas Chemical and number-three Vinythai,cannot escape the downturn this year.
It expects lower net profit because product spreads have been squeezed and production has dropped as it moved capacity overseas, Mr Kanet said.
"China is still playing a big part in terms of demand and this is also coupled with governments' spending efforts to stimulate all kinds of business activities,which, of course, are going to need PVC as a key material," he said.
He gave no specific forecast, but five analysts polled by earnings tracker Thomson Reuters I/B/E/S forecast a net profit of 1.9 billion baht in 2010, down 2.8% from the forecast for this year.
"Our business this year hasn't been as bad as we expected, but ... the overall picture is still not going to be able to compete with 2008," he said, referring to last year's 2.2-billion-baht profit.
TPC, which has capacity of 750,000 tonnes a year in plants in Vietnam, Indonesia and Thailand, has been moving capacity of 90,000 tonnes a year to its existing Vietnamese plant, Mr Kanet said.
Once completed, its capacity would approach 850,000 tonnes in 2009. The company expected capacity to reach one million tonnes a year within three to five years, which would put it on track to becoming the world's eighth-largest PVC maker, Mr Kanet said.
In the PVC industry, Shintech of the US, part of the Shin-Etsu group, is the world's largest producer, followed by Taiwan's Formosa Plastics and Belgium's Solvay SA, which has a 50% stake in Vinythai.
The average PVC price in 2009 is expected to be $780 a tonne, down from $1,000 in 2008. By year-end, the price should be about $900, assuming an oil price of around $70 a barrel.
Shares of TPC closed on the Stock Exchange of Thailand at 18 baht yesterday, down 20 satang, in trade worth 8.06 million baht.
It should also expand its capacity once the transfer of some output to a Vietnamese plant is completed.
"We're more confident about 2010,largely because we believe things such as volume and demand will rise after the economy has bottomed out this year,"said managing director Kanet Khaochan.
But the market leader, which is 45%owned by top Thai conglomerate Siam Cement and whose main rivals are unlisted Indonesian firm PT Asahimas Chemical and number-three Vinythai,cannot escape the downturn this year.
It expects lower net profit because product spreads have been squeezed and production has dropped as it moved capacity overseas, Mr Kanet said.
"China is still playing a big part in terms of demand and this is also coupled with governments' spending efforts to stimulate all kinds of business activities,which, of course, are going to need PVC as a key material," he said.
He gave no specific forecast, but five analysts polled by earnings tracker Thomson Reuters I/B/E/S forecast a net profit of 1.9 billion baht in 2010, down 2.8% from the forecast for this year.
"Our business this year hasn't been as bad as we expected, but ... the overall picture is still not going to be able to compete with 2008," he said, referring to last year's 2.2-billion-baht profit.
TPC, which has capacity of 750,000 tonnes a year in plants in Vietnam, Indonesia and Thailand, has been moving capacity of 90,000 tonnes a year to its existing Vietnamese plant, Mr Kanet said.
Once completed, its capacity would approach 850,000 tonnes in 2009. The company expected capacity to reach one million tonnes a year within three to five years, which would put it on track to becoming the world's eighth-largest PVC maker, Mr Kanet said.
In the PVC industry, Shintech of the US, part of the Shin-Etsu group, is the world's largest producer, followed by Taiwan's Formosa Plastics and Belgium's Solvay SA, which has a 50% stake in Vinythai.
The average PVC price in 2009 is expected to be $780 a tonne, down from $1,000 in 2008. By year-end, the price should be about $900, assuming an oil price of around $70 a barrel.
Shares of TPC closed on the Stock Exchange of Thailand at 18 baht yesterday, down 20 satang, in trade worth 8.06 million baht.
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