SRITHAI'S PROJECTED 2009 REVENUE +5%B5.1bn
Srithai Superware Plc (SITHAI),Thailand's largest plastic houseware producer is diversifying into products to combat evaporation in collaboration with a foreign innovator and PTT Chemicals,the country's largest olefin maker.
The fear of water shortages is rising with global warming and the accelerated evaporation of natural water, creating demand for tools to preserve water resources, said Srithai chairman Sanan Angubolkul.
His company plans to produce "water lillies",which are pro-+5%ducts for preserving ponds invented by an Australian company that Srithai declined to name.
Research has almost been concluded for the water lilies, which should be commercially available from 2010, he said.
"Simply speaking, water lilies are plastic modules that the user needs to patch together as a sheet to cover the surface of ponds or reservoirs," said Mr Sanan.
The water lillies will be made from a special formula of high-density polyethylene (HDPE) created in collaboration with PTTCH to meet the requirement of Srithai and the Australian inventor.
"We gather knowledge from each other to make something new to meet the new demand. With co-operation, development will be faster and cheaper as we can pool our resources together,"said Mr Sanan.
The United States and Australia are showing enthusiasm for the product as they are highly concerned about future water shortages, he said.
But other countries with a tropical climate could also benefit from the new product, Mr Sanan added.
PTTCH will develop the new HDPE to float while protecting water from heat and controlling water movement and shore erosion.
The project is expected to get patents
for its materials and design. But the business model is yet to be established as the project requires huge capital investment.
Srithai will invest mainly in advance,spending 800 million baht this year and another 400 million next year.
"We have to focus on technology at a time of economic slowdown. When the global economy returns to normal,we will be more able than our rivals to meet our clients' demands," said Mr Sanan.
Srithai expects its revenue this year to rise 5% to 5.1 billion baht from 4.92 billion last year due to strong demand in the packaging sector.
Shares of SITHAI closed yesterday at five baht, unchanged, in trade worth 5.48 million baht, while PTTCH shares were also unchanged at 66 baht in trade worth 202 million baht.
Monday, August 31, 2009
PROSPECTING FOR SUCCESS
From humble origins, the Thai petroleum industry's training and certification centre for engineers and professionals has won international acclaim,writes Yuthana Praiwan in Songkhla
The Thai petroleum industry has established a global presence with the successful operation of its Technical Petroleum Training Institute (TPTI), now counted among Asia's leading training centres for the petroleum field.
Apart from being a regional training centre, the TPTI provides globally recognised certificates for oil engineers and technicians who have taken its courses.
Its standards are accredited by the Offshore Petroleum Industry Training Organisation (OPITO), a leading global oil-and-gas academy. Professionals with certificates issued by the TPTI would be recognised by the global industry as those certified by OPITO.
"Some engineers who work for the Australia-based Gorgon Petroleum fields came to take courses here instead of going to the training centre in the Middle East," said Kriengdej Assavalertplagorn,the TPTI's technical director.
The TPTI was established in 2000 when the country's demand for oiland-gas exploration and production had just emerged to develop skills among engineers to serve in the field.
After breaking even in only three years,the TPTI now sees its income rise to
more than 100 million baht.
"This is a good sign. The trust we have gained from multinational companies is proof that we have made a name in the global exploration and production industry," said Krairit Nilkuha, chairman of the board of trustee and a founder.
The idea to set up the institute originated from the need to reduce the high training and certification costs for engineers and professionals in the field.
"Initially, the TPTI was set up to serve only local demand as we didn't want to spend lots of money sending our engineers to training centres overseas. At that time, everyone took course in the United States, the Middle East and Singapore and it cost us more than 100,000 baht per person for one certificate. The training courses at those centres provided us with the same skills and knowledge," he said.
Moreover, holders of international oil-field certificates have to renew them every three years.
Oil engineers must have internationally recognised certification for their skills and knowledge to ensure they can handle any crisis when working in high-risk oil fields.
All of these mean oil-exploration companies and equipment suppliers in Thailand needed to spend a lot of money to certify their engineers, estimated at around 150 million baht a year, said Mr Kriengdej.
"So we came up with the idea of setting up a certifying body by ourselves.Not only would it help develop our staff's skills, local universities would also gain from developing their curricula," he added.
In its first year of operation, the centre successfully trained 400 professionals,with only US$4 million invested in the faculty and facilities including lecturers,buildings, laboratories and equipment.The seed fund was donated by the Industry Ministry's Department of Mineral Fuels and oil-exploration companies.
Initially, the TPTI held only a few training courses, mainly those involving well drilling and safety management.Today, the centre has developed more than 100 training courses including English for communication and presentation skills.
It has also branched out to five provinces from the base in Si Racha, Chon Buri province. It now has operations in Sattahip, also in Chon Buri province,Songkhla, Bang Pu in Samut Prakan province, and Bangkok.
The centre has a capacity to coach more than 10,000 people this year.
Last year, the TPTI trained 7,000 people,15-20% of whom were expatriates based in Thailand and Asia-Pacific, said Mr Kriengdej.
"Instead of paying 100,000 baht for each professional, they [oil-exploring companies] pay us just half that amount.Also, they could enjoy tourist attractions in the country," Mr Kriengdej added.
"The TPTI would not have come this far without the collaboration of upstream petroleum companies, which have provided us with skillful trainers, lecturers and facilities to help develop the centre until its quality is on par with the world standard," said Mr Krairit.
The Thai petroleum industry has established a global presence with the successful operation of its Technical Petroleum Training Institute (TPTI), now counted among Asia's leading training centres for the petroleum field.
Apart from being a regional training centre, the TPTI provides globally recognised certificates for oil engineers and technicians who have taken its courses.
Its standards are accredited by the Offshore Petroleum Industry Training Organisation (OPITO), a leading global oil-and-gas academy. Professionals with certificates issued by the TPTI would be recognised by the global industry as those certified by OPITO.
"Some engineers who work for the Australia-based Gorgon Petroleum fields came to take courses here instead of going to the training centre in the Middle East," said Kriengdej Assavalertplagorn,the TPTI's technical director.
The TPTI was established in 2000 when the country's demand for oiland-gas exploration and production had just emerged to develop skills among engineers to serve in the field.
After breaking even in only three years,the TPTI now sees its income rise to
more than 100 million baht.
"This is a good sign. The trust we have gained from multinational companies is proof that we have made a name in the global exploration and production industry," said Krairit Nilkuha, chairman of the board of trustee and a founder.
The idea to set up the institute originated from the need to reduce the high training and certification costs for engineers and professionals in the field.
"Initially, the TPTI was set up to serve only local demand as we didn't want to spend lots of money sending our engineers to training centres overseas. At that time, everyone took course in the United States, the Middle East and Singapore and it cost us more than 100,000 baht per person for one certificate. The training courses at those centres provided us with the same skills and knowledge," he said.
Moreover, holders of international oil-field certificates have to renew them every three years.
Oil engineers must have internationally recognised certification for their skills and knowledge to ensure they can handle any crisis when working in high-risk oil fields.
All of these mean oil-exploration companies and equipment suppliers in Thailand needed to spend a lot of money to certify their engineers, estimated at around 150 million baht a year, said Mr Kriengdej.
"So we came up with the idea of setting up a certifying body by ourselves.Not only would it help develop our staff's skills, local universities would also gain from developing their curricula," he added.
In its first year of operation, the centre successfully trained 400 professionals,with only US$4 million invested in the faculty and facilities including lecturers,buildings, laboratories and equipment.The seed fund was donated by the Industry Ministry's Department of Mineral Fuels and oil-exploration companies.
Initially, the TPTI held only a few training courses, mainly those involving well drilling and safety management.Today, the centre has developed more than 100 training courses including English for communication and presentation skills.
It has also branched out to five provinces from the base in Si Racha, Chon Buri province. It now has operations in Sattahip, also in Chon Buri province,Songkhla, Bang Pu in Samut Prakan province, and Bangkok.
The centre has a capacity to coach more than 10,000 people this year.
Last year, the TPTI trained 7,000 people,15-20% of whom were expatriates based in Thailand and Asia-Pacific, said Mr Kriengdej.
"Instead of paying 100,000 baht for each professional, they [oil-exploring companies] pay us just half that amount.Also, they could enjoy tourist attractions in the country," Mr Kriengdej added.
"The TPTI would not have come this far without the collaboration of upstream petroleum companies, which have provided us with skillful trainers, lecturers and facilities to help develop the centre until its quality is on par with the world standard," said Mr Krairit.
Thursday, August 27, 2009
ALLIANCE WANTS HALT TO MAP TA PHUT PROJECTS
The Anti-Global Warming Association and 43 Map Ta Phut villagers yesterday petitioned the Administrative Court to freeze all petrochemical projects planned for the industrial zone.
They also asked the court to reverse the Cabinet's resolution on Tuesday that allowed the issue of operating licences to some petrochemical projects.
The opponents said the licensing did not abide by Article 67 of the Constitution.
Association president Srisuwan Chanya said the projects would cause trouble for the public and environment.
Under the Constitution, all of the projects must conduct both an environmental-impact assessment and a health-impact assessment along with a public hearing. An opinion from an independent environmental body is also required.
Villager Suthi Atchasai said if the petition received no satisfactory results, then on September 9 the Network of Eastern People would gather at the Map Ta Phut Industrial Estate.
"We don't want to block investment but want to ensure that all investment is in line with the Constitution. We may block the port and the industrial estate, as well as the sites for the new plants, in order to send a message to all that pollution problems are not yet addressed," he said.
Recently, the Industrial Estate Authority of Thailand (IEAT) awarded long-awaited operating licences to four industrial projects worth Bt17.55 billion, including one each to the PTT Group and the Siam Cement Group.
Besides the four approved projects, 19 worth Bt305.45 billion are awaiting IEAT approval and 13 worth Bt59 billion are pending approval from the Industrial Works Department.
They also asked the court to reverse the Cabinet's resolution on Tuesday that allowed the issue of operating licences to some petrochemical projects.
The opponents said the licensing did not abide by Article 67 of the Constitution.
Association president Srisuwan Chanya said the projects would cause trouble for the public and environment.
Under the Constitution, all of the projects must conduct both an environmental-impact assessment and a health-impact assessment along with a public hearing. An opinion from an independent environmental body is also required.
Villager Suthi Atchasai said if the petition received no satisfactory results, then on September 9 the Network of Eastern People would gather at the Map Ta Phut Industrial Estate.
"We don't want to block investment but want to ensure that all investment is in line with the Constitution. We may block the port and the industrial estate, as well as the sites for the new plants, in order to send a message to all that pollution problems are not yet addressed," he said.
Recently, the Industrial Estate Authority of Thailand (IEAT) awarded long-awaited operating licences to four industrial projects worth Bt17.55 billion, including one each to the PTT Group and the Siam Cement Group.
Besides the four approved projects, 19 worth Bt305.45 billion are awaiting IEAT approval and 13 worth Bt59 billion are pending approval from the Industrial Works Department.
Wednesday, August 26, 2009
Local plastics producers optimistic
The outlook for the local plastics industry is improving in the second half of this year, thanks to demand for plastic packaging in the food and electronics industries, according to the Petroleum Institute of Thailand (PTIT).
According to the institute's research,plastic product growth contracted by 5% in the first half, reflecting poor purchasing power of consumers.
However, the study found that the trend in orders had started to rebound,said Kriengsak Wongpromrat, the assistant executive director of the PTIT.
Demand is rising for packaging for food, agricultural products and for hard disk drives but is sluggish among customers automotive, construction and electrical appliance industries.
"After declining continuously since the economic slowdown started (late last year), demand was steady early this month. That showed us the falling pace had stopped and may be starting to head upward this year, but this is hard to predict," said Mr Kriengsak.
Ready-to-eat food products have played a big role in lifting plastic demand, as more consumers cut expenses by eating more meals at home, he said.
"But [demand for packaging of] hard disk drives in the electronic sector has risen due to the global demand," he said.
Mr Kriengsak said that packaging businesses accounted for 40% of the local plastics industry, with 12% shared by electronics,7% by automobiles and parts, and 6% by construction materials.The total market was worth 370 billion baht last year with volume of 3.25 million tonnes.
PTIT, as an information service provider and researcher for the petroleum and related industries, was hired by the Office of Industrial Economics to collect data on the plastics sector. The aim is to better serve the demand of operators as well as develop the industry in the long term.
A total of 3,000 plastic and related industries out of 5,000 registered companies have participated by providing data to the institute. Major categories include 900 companies in packaging,followed by electronics, automobiles and construction materials.
Arthit Wuthikaro, the OIE directorgeneral, said the research would help operators gauge demand trends, such as for high-grade film products, which are now imported.
The OIE will join with the Board of Investment and other agencies to promote locally made film products through investment privileges, Mr Arthit said.
For the future, research will go toward the bioplastic industry, since concern about climate change is on the rise throughout the world.
According to the institute's research,plastic product growth contracted by 5% in the first half, reflecting poor purchasing power of consumers.
However, the study found that the trend in orders had started to rebound,said Kriengsak Wongpromrat, the assistant executive director of the PTIT.
Demand is rising for packaging for food, agricultural products and for hard disk drives but is sluggish among customers automotive, construction and electrical appliance industries.
"After declining continuously since the economic slowdown started (late last year), demand was steady early this month. That showed us the falling pace had stopped and may be starting to head upward this year, but this is hard to predict," said Mr Kriengsak.
Ready-to-eat food products have played a big role in lifting plastic demand, as more consumers cut expenses by eating more meals at home, he said.
"But [demand for packaging of] hard disk drives in the electronic sector has risen due to the global demand," he said.
Mr Kriengsak said that packaging businesses accounted for 40% of the local plastics industry, with 12% shared by electronics,7% by automobiles and parts, and 6% by construction materials.The total market was worth 370 billion baht last year with volume of 3.25 million tonnes.
PTIT, as an information service provider and researcher for the petroleum and related industries, was hired by the Office of Industrial Economics to collect data on the plastics sector. The aim is to better serve the demand of operators as well as develop the industry in the long term.
A total of 3,000 plastic and related industries out of 5,000 registered companies have participated by providing data to the institute. Major categories include 900 companies in packaging,followed by electronics, automobiles and construction materials.
Arthit Wuthikaro, the OIE directorgeneral, said the research would help operators gauge demand trends, such as for high-grade film products, which are now imported.
The OIE will join with the Board of Investment and other agencies to promote locally made film products through investment privileges, Mr Arthit said.
For the future, research will go toward the bioplastic industry, since concern about climate change is on the rise throughout the world.
UKEM increases sales target to B2bn
SET-listed Union Petrochemical Plc (UKEM) has revised upward its revenue target for 2009 to 2 billion baht, as demand is set to increase with the global economy.
The chemical importer and distributor previously set a sales target of 1.5 billion to 1.8 billion baht this year, well off from the 2.53 billion in sales reported last year 2008.
First-half sales totalled 952.5 million baht, down from 1.39 billion last year.But first-half profits stayed mostly unchanged, at 31.25 million baht compared with 31.89 million the same period last year.
Perapol Suwannapasri, a UKEM as-sistant managing director, told investors at a briefing yesterday that lower interest rates and expenses helped the company support its net profits even as sales fell year-on-year.
Lower oil prices helped push down chemical prices, leading the company to cut back its short-term working capital loans.
UKEM still expects this year's gross profit margins to rise to about 13% compared with 9.51% in 2008.
"The gross margin trend this year increased in the first and fourth months,but faded in May and June. However,the demand in the second half will come back, and we expect to see some increase in orders," Mr Perapol said.
"We have some concerns for the fourth quarter that the use [of chemicals] will decrease. We have plans to focus on smaller customers in order to lower the risks of depending on large customers."
Key customers for UKEM include ExxonMobil Chemical, PTT Chemical, PTT Phenol and IRPC. Over half of the company's solvents are used in the construction industry.
Mr Perapol said that while that there had been a recovery for UKEM's customers in the electronics sector, the automobile sector remains sluggish, with production down 20% from last year.
Crude oil prices may rise to $80 per barrel in the fourth quarter compared with $73-74 now. Crude oil is a raw material for solvents, said deputy managing director Perajed Suwannapasri.
UKEM earlier this month announced that it would issue up to 165 million warrants to existing shareholders, with one warrant offered for every four shares held. The five-year warrants are convertible to common stock at a 1:1 basis at an exercise price of 50 satang per share.
The company will also raise capital to 206.25 million baht from 165 million through the issue of 165 million new shares with par value of 25 satang per share for reserve for warrant holders.Shareholders will vote on the capital increase and warrant issue on Sept 30.The share register closes today.
UKEM shares closed yesterday on the SET at 0.64 baht, up 2 satang, in trade worth 15.6 million baht.
The chemical importer and distributor previously set a sales target of 1.5 billion to 1.8 billion baht this year, well off from the 2.53 billion in sales reported last year 2008.
First-half sales totalled 952.5 million baht, down from 1.39 billion last year.But first-half profits stayed mostly unchanged, at 31.25 million baht compared with 31.89 million the same period last year.
Perapol Suwannapasri, a UKEM as-sistant managing director, told investors at a briefing yesterday that lower interest rates and expenses helped the company support its net profits even as sales fell year-on-year.
Lower oil prices helped push down chemical prices, leading the company to cut back its short-term working capital loans.
UKEM still expects this year's gross profit margins to rise to about 13% compared with 9.51% in 2008.
"The gross margin trend this year increased in the first and fourth months,but faded in May and June. However,the demand in the second half will come back, and we expect to see some increase in orders," Mr Perapol said.
"We have some concerns for the fourth quarter that the use [of chemicals] will decrease. We have plans to focus on smaller customers in order to lower the risks of depending on large customers."
Key customers for UKEM include ExxonMobil Chemical, PTT Chemical, PTT Phenol and IRPC. Over half of the company's solvents are used in the construction industry.
Mr Perapol said that while that there had been a recovery for UKEM's customers in the electronics sector, the automobile sector remains sluggish, with production down 20% from last year.
Crude oil prices may rise to $80 per barrel in the fourth quarter compared with $73-74 now. Crude oil is a raw material for solvents, said deputy managing director Perajed Suwannapasri.
UKEM earlier this month announced that it would issue up to 165 million warrants to existing shareholders, with one warrant offered for every four shares held. The five-year warrants are convertible to common stock at a 1:1 basis at an exercise price of 50 satang per share.
The company will also raise capital to 206.25 million baht from 165 million through the issue of 165 million new shares with par value of 25 satang per share for reserve for warrant holders.Shareholders will vote on the capital increase and warrant issue on Sept 30.The share register closes today.
UKEM shares closed yesterday on the SET at 0.64 baht, up 2 satang, in trade worth 15.6 million baht.
Tuesday, August 25, 2009
PTT embraces SCM system
PTT Plc plans to improve its cost controls to be more efficient by implementing a supply chain management system (SCM),which will be used for linking all related company parties under one roof, said president and chief executive Prasert Bunsumpun.
Mr Prasert said this was part of its strategic plan that focuses on integration in production, inventories, logistics, procurement and trading activities among its businesses, and it aims to complete system installation in the next three years.
The group's businesses include oil refining, exploration and production,and distribution for natural gas as well as petrochemicals.
"As these businesses are all related to energy, it is crucial to create synergy among the group in many aspects. A supply chain can help the company reduce costs and waste," said Mr Prasert.
"For example, with the new system you will see our quarterly results reports within a week instead of wasting time and personnel for three weeks to complete them as currently happens."
Its olefins arm, PTT Chemicals (PTTCH), was the first to invest in the system in 2007 with a commitment of 100 million baht. Mr Prasert declined to give the exact amount it saved, but said the amount for logistics was immense,that it may break even on its investment in one year, and that it is one of the most efficient companies in Asia.
Last year PTTCH traded 500,000 tonnes of polymers through its new system and that should increase to 1.5 million next year and 2.2 million a year later.
"We can monitor our product from oil or gas well to platform, until the final product is handed over to either corporate clients or motorists who fill their tanks in PTT service stations.
This gives the company a quicker read on what products clients actually use,data that can be used for its production plan.
"If we know real demand before hand,we can serve demand as if custom-made,making this the most effective way to cut inventory cost," said Mr Prasert.
The system also allows the company to monitor waste and loss throughout the supply chain, so that it can solve the problem at the root.
Mr Prasert predicts that within a few years, the PTT group will surpass other players in cost management in Asia.
"In the second half of this year new olefins crackers in the Middle East will start production, and while production costs are low, applying the SCM system means we can compete with other newcomers," he said.
He said there were other chemical producers in the PTT group that had yet to use SCM, and it would seek ways to link systems between similar businesses such as the petrochemical unit of Thai Oil, IRPC and PTT Aromatics and Refinery Plc connecting with PTTCH.
Prajya Phinyawat, the senior executive vice-president for petrochemicals and refining, said the oil and refinery businesses would install the system first as the group now operates more than 50 oil and refinery sites.
"The oil and refinery business alone should save around 300-400 million baht per year after SCM is complete," said Mr Prajya.
Shares of PTT closed yesterday on the Stock Exchange of Thailand at 247 baht, up 3 baht, in trade worth 1.45 billion baht.
Mr Prasert said this was part of its strategic plan that focuses on integration in production, inventories, logistics, procurement and trading activities among its businesses, and it aims to complete system installation in the next three years.
The group's businesses include oil refining, exploration and production,and distribution for natural gas as well as petrochemicals.
"As these businesses are all related to energy, it is crucial to create synergy among the group in many aspects. A supply chain can help the company reduce costs and waste," said Mr Prasert.
"For example, with the new system you will see our quarterly results reports within a week instead of wasting time and personnel for three weeks to complete them as currently happens."
Its olefins arm, PTT Chemicals (PTTCH), was the first to invest in the system in 2007 with a commitment of 100 million baht. Mr Prasert declined to give the exact amount it saved, but said the amount for logistics was immense,that it may break even on its investment in one year, and that it is one of the most efficient companies in Asia.
Last year PTTCH traded 500,000 tonnes of polymers through its new system and that should increase to 1.5 million next year and 2.2 million a year later.
"We can monitor our product from oil or gas well to platform, until the final product is handed over to either corporate clients or motorists who fill their tanks in PTT service stations.
This gives the company a quicker read on what products clients actually use,data that can be used for its production plan.
"If we know real demand before hand,we can serve demand as if custom-made,making this the most effective way to cut inventory cost," said Mr Prasert.
The system also allows the company to monitor waste and loss throughout the supply chain, so that it can solve the problem at the root.
Mr Prasert predicts that within a few years, the PTT group will surpass other players in cost management in Asia.
"In the second half of this year new olefins crackers in the Middle East will start production, and while production costs are low, applying the SCM system means we can compete with other newcomers," he said.
He said there were other chemical producers in the PTT group that had yet to use SCM, and it would seek ways to link systems between similar businesses such as the petrochemical unit of Thai Oil, IRPC and PTT Aromatics and Refinery Plc connecting with PTTCH.
Prajya Phinyawat, the senior executive vice-president for petrochemicals and refining, said the oil and refinery businesses would install the system first as the group now operates more than 50 oil and refinery sites.
"The oil and refinery business alone should save around 300-400 million baht per year after SCM is complete," said Mr Prajya.
Shares of PTT closed yesterday on the Stock Exchange of Thailand at 247 baht, up 3 baht, in trade worth 1.45 billion baht.
IRPC TO ADD VALUE TO LAND RESOURCES
IRPC, a unit of PTT Group, will focus on adding value not only to its core petrochemical business but also to its spare land over the next five years.
CEO Pailin Chuchottaworn said yesterday that the company's 2010-2014 investment plan was aimed at its becoming a top integrated petrochemical complex in Asia, which could be achieved through greater exploitation of its existing assets and resources.
The company will continue developing and maximising its four core businesses - petrochemical, refinery, port and product inventory, and property - to boost revenue and profit, he said.
The company will further improve the production capacity of the petrochemical business and its product quality as well as invest more on developing new and high-yielding products.
The company owns 15,000 rai of land nationwide, but only 3,000 rai are fully utilised.
The idle 12,000 rai will be developed to generate further income.
Of the total, 1,200 rai are located close to its petrochemical complex in Rayong, 3,800 rai in a different location in the province and 2,800 rai in Songkhla.
"There are many options to maximise land assets and the most likely one is we will seek a partner to jointly develop projects on them, such as renewable-energy production," he said.
The fastest ways to make money from land are by selling or renting parcels or planting energy fuel crops on them, he said.
If all the business targets go as planned, the company should earn as much as 23 per cent on investment capital in five years, up from the present 8-9 per cent.
The company has budgeted US$1.2 billion (Bt41 billion) for investment in the next five years, mostly on 16 new projects.
One of them is the expansion of propylene production capacity to 412,000 tonnes per year from the current 312,000 level, which is expected to cost $88 million.
However, IRPC might revise its previously planned projects, such as the upgrade of the refinery to meet the Euro 4 standard and the expansion of ABS/SAN plastic production capacity.
"We'll make a decision this year on whether to implement the projects," he said.
IRPC will definitely cancel the plan to boost refining capacity to 258,000 barrels per day from the present 215,000 barrels.
The refinery will mainly serve the petrochemical business, not the retail oil business, Pailin said.
CEO Pailin Chuchottaworn said yesterday that the company's 2010-2014 investment plan was aimed at its becoming a top integrated petrochemical complex in Asia, which could be achieved through greater exploitation of its existing assets and resources.
The company will continue developing and maximising its four core businesses - petrochemical, refinery, port and product inventory, and property - to boost revenue and profit, he said.
The company will further improve the production capacity of the petrochemical business and its product quality as well as invest more on developing new and high-yielding products.
The company owns 15,000 rai of land nationwide, but only 3,000 rai are fully utilised.
The idle 12,000 rai will be developed to generate further income.
Of the total, 1,200 rai are located close to its petrochemical complex in Rayong, 3,800 rai in a different location in the province and 2,800 rai in Songkhla.
"There are many options to maximise land assets and the most likely one is we will seek a partner to jointly develop projects on them, such as renewable-energy production," he said.
The fastest ways to make money from land are by selling or renting parcels or planting energy fuel crops on them, he said.
If all the business targets go as planned, the company should earn as much as 23 per cent on investment capital in five years, up from the present 8-9 per cent.
The company has budgeted US$1.2 billion (Bt41 billion) for investment in the next five years, mostly on 16 new projects.
One of them is the expansion of propylene production capacity to 412,000 tonnes per year from the current 312,000 level, which is expected to cost $88 million.
However, IRPC might revise its previously planned projects, such as the upgrade of the refinery to meet the Euro 4 standard and the expansion of ABS/SAN plastic production capacity.
"We'll make a decision this year on whether to implement the projects," he said.
IRPC will definitely cancel the plan to boost refining capacity to 258,000 barrels per day from the present 215,000 barrels.
The refinery will mainly serve the petrochemical business, not the retail oil business, Pailin said.
PTT TO SPEND BT1 BN ON SUPPLY-CHAIN MANAGEMENT
PTT will spend Bt1 billion over the next three years to install a supply-chain management (SCM) system that will oversee logistics for all of its business units, suppliers and customers.
"Our SCM will emphasise real-time information, thus increasing our efficiency. This will support PTT's quest to become one of the top 100 companies on the Fortune list within five years," said president and CEO Prasert Bunsumpun.
He said the system would manage production and shipment to customers, decreasing operating costs and increasing customer satisfaction in the process.
Driving the investment will be the successful SCM of its polymer operations, which involve subsidiaries PTT Chemical, PTT Polymer Marketing, PTT ICT Solutions, PTT Polymer Logistics and Bangkok Polyethylene.
This will be expanded during the three-year period to include the petrochemical, oil and natural-gas operations.
Prajya Phinyawat, president for refining operations at PTT, said SCM would reduce annual business expenses by Bt300 to Bt400 million.
PTT Chemical president Veerasak Kositpaisal said that even though an SCM system for polymer operations would cost Bt100 million, it would break even within a year.
Transportation costs would drop to US$50 (1,700) per tonne, or only 5 per cent of total cost.
Within two years, the system would be applied to other petrochemical products for an additional cost of Bt100 million.
Veerasak said logistics costs amounted to 19 per cent of gross domestic product at present, making Thailand less competitive than other countries. Spending on logistics is thus important for the PTT Group, particularly in the petrochemical industry, where more than half of output is exported.
He said the export ratio would rise following installation of the SCM system, particularly after PTT Chemical's capacity expanded by 1 million tonnes late this year as scheduled.
"Comparatively, PTT's chemical business competes well with naphtha-based plants abroad, which account for more than half of all chemical plants. However, we're less competitive with Middle East factories, whose products will hit the market late this year. SCM will thus be expanded to cover other segments to reduce management costs," Veerasak said.
He also believes PTT Chemical's financial results will improve further. The company posted a second-quarter net profit of Bt2.1 billion, against a net loss of Bt400 million in the first quarter. He attributed the improvement to measures to counter the economic crisis that were implemented late last year, involving cost and cash management as well as SCM.
However, he admitted some risk factors remained in the second half, due to new supply from the Middle East.
"Our SCM will emphasise real-time information, thus increasing our efficiency. This will support PTT's quest to become one of the top 100 companies on the Fortune list within five years," said president and CEO Prasert Bunsumpun.
He said the system would manage production and shipment to customers, decreasing operating costs and increasing customer satisfaction in the process.
Driving the investment will be the successful SCM of its polymer operations, which involve subsidiaries PTT Chemical, PTT Polymer Marketing, PTT ICT Solutions, PTT Polymer Logistics and Bangkok Polyethylene.
This will be expanded during the three-year period to include the petrochemical, oil and natural-gas operations.
Prajya Phinyawat, president for refining operations at PTT, said SCM would reduce annual business expenses by Bt300 to Bt400 million.
PTT Chemical president Veerasak Kositpaisal said that even though an SCM system for polymer operations would cost Bt100 million, it would break even within a year.
Transportation costs would drop to US$50 (1,700) per tonne, or only 5 per cent of total cost.
Within two years, the system would be applied to other petrochemical products for an additional cost of Bt100 million.
Veerasak said logistics costs amounted to 19 per cent of gross domestic product at present, making Thailand less competitive than other countries. Spending on logistics is thus important for the PTT Group, particularly in the petrochemical industry, where more than half of output is exported.
He said the export ratio would rise following installation of the SCM system, particularly after PTT Chemical's capacity expanded by 1 million tonnes late this year as scheduled.
"Comparatively, PTT's chemical business competes well with naphtha-based plants abroad, which account for more than half of all chemical plants. However, we're less competitive with Middle East factories, whose products will hit the market late this year. SCM will thus be expanded to cover other segments to reduce management costs," Veerasak said.
He also believes PTT Chemical's financial results will improve further. The company posted a second-quarter net profit of Bt2.1 billion, against a net loss of Bt400 million in the first quarter. He attributed the improvement to measures to counter the economic crisis that were implemented late last year, involving cost and cash management as well as SCM.
However, he admitted some risk factors remained in the second half, due to new supply from the Middle East.
Saturday, August 22, 2009
IRP on course for revenue record
SET-listed Indorama Polymers Plc (IRP),Thailand's largest polyethylene terephthalate (PET) producer, is aiming for 20% growth in revenue this year to a record 47 billion baht, thanks to growing global PET demand.
PET prices are also expected to rise in the second half because of increasing raw material costs, said chief executive D.K. Agarwal.
Crude oil prices have moved upward to a range of $65-70 per barrel in the second quarter, resulting in the same trend for petrochemical prices, he said.
Global demand for PET resin - normally used in the manufacturing of drink containers - is forecast to expand by 3.2% to 15.8 million tonnes this year year and to rise by 7.6% to 17 million tonnes in 2010.
Globally, leading beverage brands reported a 2-3% rise in sales volume in the first half of this year. PET is used in 65% soft drink container manufacturing worldwide and 53% of that in Asia, and the trend is growing for further use of PET instead of aluminium and glass.
"The company expects its revenue to grow by 20%, from 41 billion baht in 2008 to 47 billion baht this year as sales volume surges 25% from 820,000 tonnes to 1.05 million," Mr Agarwal said yesterday at a briefing for investors.
In the second quarter, IRP's net profit increased by 53.3% from the same period last year to 658 million baht even as revenue slipped 2.4% to 11.8 billion baht. First-half net profit fell 15.9% from 1.59 billion baht a year earlier to 1.34 billion but revenue rose 13.8% to 21.86 billion baht.
Mr Agarwal said IRP expected higher sales growth in 2010 when its Alabamabased AlphaPet plant starts production in September after a two-month delay necessitated by plant modifications and contractor issues.
To manage the delay, IRP assigned its subsidiary, Indorama Polyester Industry Plc, to produce 90,000 tonnes of PET bottles in the fourth quarter.
The $182-million AlphaPet plant will lift IRP's annual capacity by 35-40% or 400,000 tonnes to 1.5 million tonnes,making it the world's second largest PET producer after M&G.
"AlphaPet will be very aggressive in the market in the fourth quarter. Our internal target is 70-80%(of total production capacity) in the next year at least," said Mr Agarwal.
The current profit margin of IRP is 5.5% compared with 3.8% last year. The company hopes to maintain the figure for the rest of this year.
IRP shares closed yesterday on the SET at 11.80 baht, unchanged, in trade worth 131 million baht.
PET prices are also expected to rise in the second half because of increasing raw material costs, said chief executive D.K. Agarwal.
Crude oil prices have moved upward to a range of $65-70 per barrel in the second quarter, resulting in the same trend for petrochemical prices, he said.
Global demand for PET resin - normally used in the manufacturing of drink containers - is forecast to expand by 3.2% to 15.8 million tonnes this year year and to rise by 7.6% to 17 million tonnes in 2010.
Globally, leading beverage brands reported a 2-3% rise in sales volume in the first half of this year. PET is used in 65% soft drink container manufacturing worldwide and 53% of that in Asia, and the trend is growing for further use of PET instead of aluminium and glass.
"The company expects its revenue to grow by 20%, from 41 billion baht in 2008 to 47 billion baht this year as sales volume surges 25% from 820,000 tonnes to 1.05 million," Mr Agarwal said yesterday at a briefing for investors.
In the second quarter, IRP's net profit increased by 53.3% from the same period last year to 658 million baht even as revenue slipped 2.4% to 11.8 billion baht. First-half net profit fell 15.9% from 1.59 billion baht a year earlier to 1.34 billion but revenue rose 13.8% to 21.86 billion baht.
Mr Agarwal said IRP expected higher sales growth in 2010 when its Alabamabased AlphaPet plant starts production in September after a two-month delay necessitated by plant modifications and contractor issues.
To manage the delay, IRP assigned its subsidiary, Indorama Polyester Industry Plc, to produce 90,000 tonnes of PET bottles in the fourth quarter.
The $182-million AlphaPet plant will lift IRP's annual capacity by 35-40% or 400,000 tonnes to 1.5 million tonnes,making it the world's second largest PET producer after M&G.
"AlphaPet will be very aggressive in the market in the fourth quarter. Our internal target is 70-80%(of total production capacity) in the next year at least," said Mr Agarwal.
The current profit margin of IRP is 5.5% compared with 3.8% last year. The company hopes to maintain the figure for the rest of this year.
IRP shares closed yesterday on the SET at 11.80 baht, unchanged, in trade worth 131 million baht.
PTT rig leaks off Australia
PTT Exploration & Production Plc said a drilling rig at its Montara development has leaked gas and spilled crude oil into the Timor Sea.
The West Atlas rig, about 250 kilometres northwest of Australia's Kimberley coast, began leaking at 5:30 am Darwin time yesterday, PTTEP's Australian unit said in a statement. The size of the spill was unknown, it said, without giving a cause for the incident.
Approximately 40 barrels of oil were discharged from the wellhead in the initial incident, some of it into the sea,it said. Since then, condensate has been discharged at pressure dispersed in the gas stream. It is not known how much condensate is in the gas.
The waters off the Kimberley region,off Australia's far northwest coast, are known whale-breeding areas.
The company has safely evacuated 69 workers from the drilling rig. No one was injured, PTTEP said in a statement released in Bangkok today.
The West Atlas rig is operated by Seadrill under contract to PTTEP. The Australian Marine Oil Spill Centre would begin on-site work in the Timor Sea today to minimise the effects of the spill,the company said.
The Australian Maritime Safety Authority said it was helping the company to stop and clean up the spill.
PTTEP in January won approval from Australian regulators for the $170-million purchase of Coogee Resources Ltd, which had been developing the project.
PTTEP shares closed yesterday on the SET at 141 baht, up 50 satang, in trade worth 906.4 million baht.
The West Atlas rig, about 250 kilometres northwest of Australia's Kimberley coast, began leaking at 5:30 am Darwin time yesterday, PTTEP's Australian unit said in a statement. The size of the spill was unknown, it said, without giving a cause for the incident.
Approximately 40 barrels of oil were discharged from the wellhead in the initial incident, some of it into the sea,it said. Since then, condensate has been discharged at pressure dispersed in the gas stream. It is not known how much condensate is in the gas.
The waters off the Kimberley region,off Australia's far northwest coast, are known whale-breeding areas.
The company has safely evacuated 69 workers from the drilling rig. No one was injured, PTTEP said in a statement released in Bangkok today.
The West Atlas rig is operated by Seadrill under contract to PTTEP. The Australian Marine Oil Spill Centre would begin on-site work in the Timor Sea today to minimise the effects of the spill,the company said.
The Australian Maritime Safety Authority said it was helping the company to stop and clean up the spill.
PTTEP in January won approval from Australian regulators for the $170-million purchase of Coogee Resources Ltd, which had been developing the project.
PTTEP shares closed yesterday on the SET at 141 baht, up 50 satang, in trade worth 906.4 million baht.
INDORAMA SEES 20% GROWTH IN 2009 REVENUE
Indorama Polymers, the world's second-largest producer of PET polymers, expects its revenue to grow by 20 per cent this year thanks to higher production capacity from a plant in the United States and an upward demand trend in Asia.
Company chief executive DK Agarwal said the two plants acquired by the company in March in Europe and expansion in production of StarPet in the in the United States would increase sales from 820,000 tonnes in 2008 to 1.05 million tonnes this year.
It plans to start commercial operations of Line 1 of the AlphaPet project in Alabama in September and Line 2 in November. The plant's annial capacity is 432,000 tonnes.
Agarwal said the capacity expansion project had been delayed for a few months because of what he called technology modification and contractors' issues.
However, he said the opportunity loss was not high because of flat demand growth in the US and negative demand change in Europe. The supply side has also become tighter because of the closure of two PET-polumer plants with capacity of about 600,000 tonnes per annum.
Despite demand growth in the US and Europe, the global demand for PET is growing more than 3 per cent this year and is forecast to hike to growth of 5-6 per cent in 2010 following higher demand for plastic bottles in emerging countries, including Brazil, Russia, India and China.
Indorama Polymers posted net sales of Bt21.9 billion in the first six months of this year, an increase of 13.8 per cent from the same period in 2008. Net profit was up 103.8 per cent year on year.
The spread in the second quarter was US$222 (Bt7,570) per tonnes. However, Agarwal said the spread trend in the third quarter would be lower since the product price was increasing at a slower pace than the rising oil price.
The company forecasts average oil prices moving betwene US$70-$80 per barrel in 2009, he added.
Indorama Polymers previously set a goal to list in the world's top three largest PET makers by 2010. However, as a result of the shutdown of many plants, including that of Spanish producer La Seda, it has stepped up to become the second-largest PET producer, behing only M&G.
Despite no demand growth in the US and Europe, the global demand for PET is growing more than 3 per cent this year and is forecast to hike to 5-6 per cent in 2010.
Company chief executive DK Agarwal said the two plants acquired by the company in March in Europe and expansion in production of StarPet in the in the United States would increase sales from 820,000 tonnes in 2008 to 1.05 million tonnes this year.
It plans to start commercial operations of Line 1 of the AlphaPet project in Alabama in September and Line 2 in November. The plant's annial capacity is 432,000 tonnes.
Agarwal said the capacity expansion project had been delayed for a few months because of what he called technology modification and contractors' issues.
However, he said the opportunity loss was not high because of flat demand growth in the US and negative demand change in Europe. The supply side has also become tighter because of the closure of two PET-polumer plants with capacity of about 600,000 tonnes per annum.
Despite demand growth in the US and Europe, the global demand for PET is growing more than 3 per cent this year and is forecast to hike to growth of 5-6 per cent in 2010 following higher demand for plastic bottles in emerging countries, including Brazil, Russia, India and China.
Indorama Polymers posted net sales of Bt21.9 billion in the first six months of this year, an increase of 13.8 per cent from the same period in 2008. Net profit was up 103.8 per cent year on year.
The spread in the second quarter was US$222 (Bt7,570) per tonnes. However, Agarwal said the spread trend in the third quarter would be lower since the product price was increasing at a slower pace than the rising oil price.
The company forecasts average oil prices moving betwene US$70-$80 per barrel in 2009, he added.
Indorama Polymers previously set a goal to list in the world's top three largest PET makers by 2010. However, as a result of the shutdown of many plants, including that of Spanish producer La Seda, it has stepped up to become the second-largest PET producer, behing only M&G.
Despite no demand growth in the US and Europe, the global demand for PET is growing more than 3 per cent this year and is forecast to hike to 5-6 per cent in 2010.
Thursday, August 20, 2009
Asean market faces hitch on chemicals
Asean integration may have hit a snag with fresh moves by Indonesia and the Philippines to delay a plan to remove all petrochemical tariffs by the beginning of next year.
Petrochemical firms in Indonesia are lobbying their government to postpone by one to two years the tariff elimination agreed by the 10 members of the Association of Southeast Asian Nations.
The move is aimed especially at protecting polyvinyl chloride (PVC) production, said Arin Jira, chairman of the Asean Business Advisory Council.
As a result, doubts have arisen over the prospect for full integration into a single market and production base under the Asean Economic Community (AEC)by 2015, he said at a seminar held by the Federation of Thai Industries (FTI).
"Our stance is to stand firm with the commitment to eliminate the tariffs next year. If we agree to delay this plan, other things already agreed might have the same fate," added Mr Arin, also an FTI deputy secretary-general.
Petrochemicals are among 12 sectors to be liberalised within Asean starting next year. A study by the Centre for International Trade Studies shows that Thailand's exports of petrochemical and plastic products to Asean would rise by 12.8% from the current $4.5 billion to $5 billion when the tariffs are eliminated.
Mr Arin also voiced concern that Asean should consider reducing dependence on US dollars in intra-regional trade to leverage risks, given the recession's impact on US and European economies.
About 90% of trade within Asean is denominated in dollar transactions.
Kiat Sitheeamorn, head of the Thailand Trade Representative office, said the Chinese yuan could emerge as a major currency for Asean trade when the global economy recovers.
"China is currently the major trade partner of Asean, thus the chance is there for the yuan to have a bigger role in regional trade," he said.
Kasikorn Reseach Center said the recently signed Asean free-trade pact with China would give Thailand greater possibilities to capitalise on China's fast recovery from the recession.
Thai companies in agricultural, electronics and automotive parts would have greater access to the mainland, while Chinese investors are keen to invest in processed agricultural products here.
Petrochemical firms in Indonesia are lobbying their government to postpone by one to two years the tariff elimination agreed by the 10 members of the Association of Southeast Asian Nations.
The move is aimed especially at protecting polyvinyl chloride (PVC) production, said Arin Jira, chairman of the Asean Business Advisory Council.
As a result, doubts have arisen over the prospect for full integration into a single market and production base under the Asean Economic Community (AEC)by 2015, he said at a seminar held by the Federation of Thai Industries (FTI).
"Our stance is to stand firm with the commitment to eliminate the tariffs next year. If we agree to delay this plan, other things already agreed might have the same fate," added Mr Arin, also an FTI deputy secretary-general.
Petrochemicals are among 12 sectors to be liberalised within Asean starting next year. A study by the Centre for International Trade Studies shows that Thailand's exports of petrochemical and plastic products to Asean would rise by 12.8% from the current $4.5 billion to $5 billion when the tariffs are eliminated.
Mr Arin also voiced concern that Asean should consider reducing dependence on US dollars in intra-regional trade to leverage risks, given the recession's impact on US and European economies.
About 90% of trade within Asean is denominated in dollar transactions.
Kiat Sitheeamorn, head of the Thailand Trade Representative office, said the Chinese yuan could emerge as a major currency for Asean trade when the global economy recovers.
"China is currently the major trade partner of Asean, thus the chance is there for the yuan to have a bigger role in regional trade," he said.
Kasikorn Reseach Center said the recently signed Asean free-trade pact with China would give Thailand greater possibilities to capitalise on China's fast recovery from the recession.
Thai companies in agricultural, electronics and automotive parts would have greater access to the mainland, while Chinese investors are keen to invest in processed agricultural products here.
Wednesday, August 19, 2009
FOUR PROJECTS GET LONG-AWAITED LICENCES
Four investment projects with a combined investment of Bt17.55 billion, including one each of the PTT Group and the Siam Cement Group (SCG), yesterday won long-awaited operating licences from the Industrial Estate Authority of Thailand (IEAT).
The approvals were granted following a green light from the IEAT board and the Public-Private Partnership (PPP).
The PPP convened yesterday, with Prime Minister Abhisit Vejjajiva as its chairman.
Apart from the four approved projects, 19 more with a combined investment of Bt305.45 billion are awaiting IEAT approval and another 13 projects worth Bt59 billion are waiting for approval from the Industrial Works Department.
IEAT governor Monta Pranootnorapal said the agency would speed up the granting of licences to projects that have passed an environmental-impact assessment (EIA).
The four companies granted approval yesterday are Sumitomo's 28.2 per cent-owned Siam Tinplate, Siam Polyethylene (a joint venture between Dow Chemical and SCG), Bangkok Polyethylene (part of the PTT Group) and Aditya Birla Chemicals.
The approvals are the first since new rules and regulations were imposed earlier this year to cope with environmental concerns. Agencies had, however, been reluctant to issue operating licences, due to the lack of proper guidance over compliance with Article 67 of the Constitution.
Even though projects in the pipeline will be granted licences, it was agreed by the IEAT board and the PPP that new industrial projects would be put on hold until the list of 15 industries with a serious environmental impact was announced.
Projects in industries on the list will be required to conduct a health-impact assessment (HIA), aside from the generally required EIA.
Industry Vice Minister Sorayud Petchtrakul said the list had been drawn up but was awaiting approval by Minister Charnchai Chairungrueng next Monday before being submitted to the Cabinet.
Industries on the list must wait for regulations on EIA and HIA to be completed by the Natural Resources and Environment Ministry, as well as the establishment of an independent organisation, as stipulated by Article 67.
"The prime minister ordered state agencies to complete the legal amendments as soon as possible, so that investment can resume. However, this will take time. The National Environment Act needs to be amended, to pave way for the establishment of the independent body," Sorayud said.
The approvals were granted following a green light from the IEAT board and the Public-Private Partnership (PPP).
The PPP convened yesterday, with Prime Minister Abhisit Vejjajiva as its chairman.
Apart from the four approved projects, 19 more with a combined investment of Bt305.45 billion are awaiting IEAT approval and another 13 projects worth Bt59 billion are waiting for approval from the Industrial Works Department.
IEAT governor Monta Pranootnorapal said the agency would speed up the granting of licences to projects that have passed an environmental-impact assessment (EIA).
The four companies granted approval yesterday are Sumitomo's 28.2 per cent-owned Siam Tinplate, Siam Polyethylene (a joint venture between Dow Chemical and SCG), Bangkok Polyethylene (part of the PTT Group) and Aditya Birla Chemicals.
The approvals are the first since new rules and regulations were imposed earlier this year to cope with environmental concerns. Agencies had, however, been reluctant to issue operating licences, due to the lack of proper guidance over compliance with Article 67 of the Constitution.
Even though projects in the pipeline will be granted licences, it was agreed by the IEAT board and the PPP that new industrial projects would be put on hold until the list of 15 industries with a serious environmental impact was announced.
Projects in industries on the list will be required to conduct a health-impact assessment (HIA), aside from the generally required EIA.
Industry Vice Minister Sorayud Petchtrakul said the list had been drawn up but was awaiting approval by Minister Charnchai Chairungrueng next Monday before being submitted to the Cabinet.
Industries on the list must wait for regulations on EIA and HIA to be completed by the Natural Resources and Environment Ministry, as well as the establishment of an independent organisation, as stipulated by Article 67.
"The prime minister ordered state agencies to complete the legal amendments as soon as possible, so that investment can resume. However, this will take time. The National Environment Act needs to be amended, to pave way for the establishment of the independent body," Sorayud said.
Monday, August 17, 2009
PTTAR predicts H2 gain
PTT Aromatics and Refining hopes the second half of this year will see results as the global economy improves, said president and chief executive Chainoi Puankosoom.
Mr Chainoi said a global economic rebound and oil demand growth during the winter season will improve its oil refinery business as well as its gross refining margin in the second half. For the first half, the gross refining margin stood at the average of $3 per barrel.
"It is unlikely to reach $7-8 per barrel,the high seen last year. The improvement in margins depends on the magnitude of the recovery," said Mr Chainoi.
He said aromatics products prices should also improve in the latter half of the year, as stimulus spending by the Chinese government has driven demand in various industries and raw materials to increase significantly.
Prices of paraxylene (PX), PTTAR's main petrochemical product made from aromatics, have surged strongly since the second quarter. PX is mostly used for producing polyester for the textiles and automobile industries.
A relatively small gross refining margin has cut down refinery production capacity, leading to lower production of naphtha crackers.
The limited output of naphtha, a feedstock for aromatics, as well as improving demand have pushed the price and margin for PX and benzene. Both are currently in high demand in China.
"This trend [growing demand of PX and benzene] should continue in the latter half of the year, though I am not sure how long it will last," he said.
In the second quarter, PTTAR earned net profit of 4.21 billion baht, a 2.7%improvement year-on-year and up 142%from 1.74 billion in the first quarter.
First half net profit was 5.95 billion baht (2.01 baht a share), up 6.5% from 5.59 billion (1.89 baht a share) from a year earlier.
Second quarter sales dropped 31.8%to 51 billion baht from the same period last year. This 8.9% rise from the 42.9 billion recorded in the first quarter was due to crude stock gains and improved aromatics price and margin.
With investments Mr Chainoi said Section 67 of the Constitution resulted in the suspension of its $180-million complex upgrade for condensate residue in Map Ta Phut. It is awaiting a permit,which depends on the government finalising its position on the section.
The section, which guarantees environmental and community well-being against harmful projects, is waiting for the relevant guidelines to be formed.
The lack of guidelines has stopped state agencies from granting operating permits to the private sector.
"Construction was completed in March. The complex incurs an opportunity loss of $130,000 per day because we haven't been granted the permit,"said Mr Chainoi.
PTTAR is also going ahead with its $220 million Euro4 standard production plan, which should see construction begin by the year-end and operations start in late 2011.
"If Section 67 is not decided by then,construction will not start as no permit would be given," said Mr Chainoi.
Shares of PTTAR closed at 19.10 baht,down one baht, in trade worth 853.3 million baht.
Mr Chainoi said a global economic rebound and oil demand growth during the winter season will improve its oil refinery business as well as its gross refining margin in the second half. For the first half, the gross refining margin stood at the average of $3 per barrel.
"It is unlikely to reach $7-8 per barrel,the high seen last year. The improvement in margins depends on the magnitude of the recovery," said Mr Chainoi.
He said aromatics products prices should also improve in the latter half of the year, as stimulus spending by the Chinese government has driven demand in various industries and raw materials to increase significantly.
Prices of paraxylene (PX), PTTAR's main petrochemical product made from aromatics, have surged strongly since the second quarter. PX is mostly used for producing polyester for the textiles and automobile industries.
A relatively small gross refining margin has cut down refinery production capacity, leading to lower production of naphtha crackers.
The limited output of naphtha, a feedstock for aromatics, as well as improving demand have pushed the price and margin for PX and benzene. Both are currently in high demand in China.
"This trend [growing demand of PX and benzene] should continue in the latter half of the year, though I am not sure how long it will last," he said.
In the second quarter, PTTAR earned net profit of 4.21 billion baht, a 2.7%improvement year-on-year and up 142%from 1.74 billion in the first quarter.
First half net profit was 5.95 billion baht (2.01 baht a share), up 6.5% from 5.59 billion (1.89 baht a share) from a year earlier.
Second quarter sales dropped 31.8%to 51 billion baht from the same period last year. This 8.9% rise from the 42.9 billion recorded in the first quarter was due to crude stock gains and improved aromatics price and margin.
With investments Mr Chainoi said Section 67 of the Constitution resulted in the suspension of its $180-million complex upgrade for condensate residue in Map Ta Phut. It is awaiting a permit,which depends on the government finalising its position on the section.
The section, which guarantees environmental and community well-being against harmful projects, is waiting for the relevant guidelines to be formed.
The lack of guidelines has stopped state agencies from granting operating permits to the private sector.
"Construction was completed in March. The complex incurs an opportunity loss of $130,000 per day because we haven't been granted the permit,"said Mr Chainoi.
PTTAR is also going ahead with its $220 million Euro4 standard production plan, which should see construction begin by the year-end and operations start in late 2011.
"If Section 67 is not decided by then,construction will not start as no permit would be given," said Mr Chainoi.
Shares of PTTAR closed at 19.10 baht,down one baht, in trade worth 853.3 million baht.
DuPont streamlines business
DuPont said on Thursday its finance chief would take on a new position and its operating chief would retire as the US chemicals maker consolidates 23 of its businesses into 14.
Jeffrey Keefer will leave the CFO post on Oct 31 to oversee DuPont's costcontrol efforts and performance coatings business. COO Richard Goodmanson will retire on Sept 30.
A new CFO has yet to be named.Instead of hiring a new COO, the company will split that position's responsibilities between Keefer, the new CFO and chief executive Ellen Kullman.
They are the first major changes at the Wilmington, Delaware-based company since Kullman joined in January.
"The new corporate structure will help DuPont meet the economic recovery as a stronger, faster and more agile global competitor," Kullman said in a statement.
The realignment comes as consumers buy fewer products made using chemicals, such as plastics, clothes and cars.That has hurt earnings at DuPont and industry peers.
DuPont had previously partitioned its 23 businesses into five categories.Those categories will disappear, giving each of the 14 remaining business units more autonomy and responsibility.
In practice, the businesses will work under a similar structure as before.
For example, while DuPont's agriculture businesses will cease to function as one unit, the company's Pioneer, crop protection, and nutrition and health busi-nesses will still report to James Borel,who was promoted to vice president.
And while the number of businesses will be cut to 14, and the five main business units will disappear, the number of categories in which DuPont reports its financial results will rise to seven from five.
The consolidation's costs are included in a $340 million restructuring charge that the company booked in the second quarter. DuPont does not expect additional charges from the consolidation.
In May, Dupont said it would eliminate 2,000 jobs as part of a cost-cutting plan.Dupont has reduced employment by more than 8%, or 4,500 jobs, during the last year, in addition to laying off about 10,000 contract workers.
Jeffrey Keefer will leave the CFO post on Oct 31 to oversee DuPont's costcontrol efforts and performance coatings business. COO Richard Goodmanson will retire on Sept 30.
A new CFO has yet to be named.Instead of hiring a new COO, the company will split that position's responsibilities between Keefer, the new CFO and chief executive Ellen Kullman.
They are the first major changes at the Wilmington, Delaware-based company since Kullman joined in January.
"The new corporate structure will help DuPont meet the economic recovery as a stronger, faster and more agile global competitor," Kullman said in a statement.
The realignment comes as consumers buy fewer products made using chemicals, such as plastics, clothes and cars.That has hurt earnings at DuPont and industry peers.
DuPont had previously partitioned its 23 businesses into five categories.Those categories will disappear, giving each of the 14 remaining business units more autonomy and responsibility.
In practice, the businesses will work under a similar structure as before.
For example, while DuPont's agriculture businesses will cease to function as one unit, the company's Pioneer, crop protection, and nutrition and health busi-nesses will still report to James Borel,who was promoted to vice president.
And while the number of businesses will be cut to 14, and the five main business units will disappear, the number of categories in which DuPont reports its financial results will rise to seven from five.
The consolidation's costs are included in a $340 million restructuring charge that the company booked in the second quarter. DuPont does not expect additional charges from the consolidation.
In May, Dupont said it would eliminate 2,000 jobs as part of a cost-cutting plan.Dupont has reduced employment by more than 8%, or 4,500 jobs, during the last year, in addition to laying off about 10,000 contract workers.
EGAL HURDLE DELAYS PROJECT APPROVALS
Authorities have further delayed the approval of 16 petrochemical, power-plant and other industrial projects in Rayong province worth a combined Bt60 billion.
Industry Ministry permanent screatary Damir Sukhotanang said a decision on whether these schemes should go ahead would be made at the public-private partnership meeting. The forum, sheduled for next Wednesday, will be chaired by the prime minister.
Earlier, the ministry was due to issue licences for these schemes in the Map Tha Phut Industrial Estate and other areas around Rayong this week.
However, it delayed the issue of licences, due to concerns about the legality of the interpretation of a recently issued Royal Decree, which empowers the agency to give the green light to projects that have already passed an environmental-impact assessment (EIA).
The ministry's Industrial Works Department (IWD) was expected to clear the legal hurdle within a week.
In addition, the Industrial Estate Authority of Thailand (IEAT) is also awaiting approval for three heavy-industry projects: a Bt1.8-billion project by Siam Tinplate, a Bt1.3-billion project by PTT Aromatics and Refining and a Bt270-million petrochemical project by the Aditya Birla Group.
"We [the IWD and the IEAT] need to head in the same direction and treat investors on an equal basis," said IEAT governor Monta Pronootnorapal.
The Consititution's Article 67 stipulates industrial projects are required to pass health-impact assessments (HIA) before receiving licences.
Earlier, both the IWD and the IEAT thought they could give operating and construction licences to projects that had already passed the more comprehensive EIA, because the HIA was part of the EIA process.
Meanwhile, the Federation of Thai Industries (FTI) will ask the government to clarify laws and regulations at both local and the central government levels, so that industrial schemes that impact the environment can be managed more efficiently.
FTI vice chairman Payungsak Chartsutipol said most delays in investment projects were due to unclear laws and regulations.
"It's necessary to clarify the rules and regulations as soon as possible, because foreign in vestors don't like grey areas," he said.
Industry Ministry permanent screatary Damir Sukhotanang said a decision on whether these schemes should go ahead would be made at the public-private partnership meeting. The forum, sheduled for next Wednesday, will be chaired by the prime minister.
Earlier, the ministry was due to issue licences for these schemes in the Map Tha Phut Industrial Estate and other areas around Rayong this week.
However, it delayed the issue of licences, due to concerns about the legality of the interpretation of a recently issued Royal Decree, which empowers the agency to give the green light to projects that have already passed an environmental-impact assessment (EIA).
The ministry's Industrial Works Department (IWD) was expected to clear the legal hurdle within a week.
In addition, the Industrial Estate Authority of Thailand (IEAT) is also awaiting approval for three heavy-industry projects: a Bt1.8-billion project by Siam Tinplate, a Bt1.3-billion project by PTT Aromatics and Refining and a Bt270-million petrochemical project by the Aditya Birla Group.
"We [the IWD and the IEAT] need to head in the same direction and treat investors on an equal basis," said IEAT governor Monta Pronootnorapal.
The Consititution's Article 67 stipulates industrial projects are required to pass health-impact assessments (HIA) before receiving licences.
Earlier, both the IWD and the IEAT thought they could give operating and construction licences to projects that had already passed the more comprehensive EIA, because the HIA was part of the EIA process.
Meanwhile, the Federation of Thai Industries (FTI) will ask the government to clarify laws and regulations at both local and the central government levels, so that industrial schemes that impact the environment can be managed more efficiently.
FTI vice chairman Payungsak Chartsutipol said most delays in investment projects were due to unclear laws and regulations.
"It's necessary to clarify the rules and regulations as soon as possible, because foreign in vestors don't like grey areas," he said.
INDORAMA BANKING ON LAST YEAR'S ACQUISITIONS
Indorama Ventures(IVL) expects gains from acquisitions in Thailand and Europe last year following signs of recovery for purified terephthalic acid(PTA) in Asia after more than two years of a down cycle.
IVL' s strategic acquisitions include Indorama Petrochemicals and TPT Petrochemicals. The group also acquired a PTA facility in Europe in April 2008.
"The PTA business has started to pick up fater two years of a down cycle, and with the inherent potential of the industry, we expect IVL's major PTA acquistions over the past year or so to provide the impetus for meaningful addition to margins," said IVL chief executive Aloke Lohia.
PTA marging in Asia have grown to US$218 (Bt7,400) per tonne, from $146 in 2007, despits expectations of an extended down cycle after the credit crisis.
IVL, whose main initial business was polyethylene terephthalate(PET), started to shift its focus to a more vertically integrated model and therefore moved into the PTA business, leading to acquisitions of three PTA business, leading to acquisitions of three PTA plants last year with a combined capacity of 1.6 million tonnes.
It is the parent company of Indorama Polymers, one of the world's leading PET producers.
"The acquisitions were made because IVL wanted to have a secure feedstock for its PET business as PTA is the key component in production of PET. Additionally, the combined margins of PET and PTA add to more consistency and predictability to earnings and therefore improve the quality of our earnings for investors and stakeholders," Lohia said.
IVL last year acquired Indorama Petrochem PTA, with annual capacity of 710,000 tonnes, and them TPT Petrochemicals PTA, with annual capacity of 550,000 tonnes. Both are located in Rayong Province.
"Today, IVL has interests in PTA,PET and polyester assets, and these are very much interdependent on each other. The effective synergies among them indisputably enhance our operational efficiency," said Lohia.
IVL' s strategic acquisitions include Indorama Petrochemicals and TPT Petrochemicals. The group also acquired a PTA facility in Europe in April 2008.
"The PTA business has started to pick up fater two years of a down cycle, and with the inherent potential of the industry, we expect IVL's major PTA acquistions over the past year or so to provide the impetus for meaningful addition to margins," said IVL chief executive Aloke Lohia.
PTA marging in Asia have grown to US$218 (Bt7,400) per tonne, from $146 in 2007, despits expectations of an extended down cycle after the credit crisis.
IVL, whose main initial business was polyethylene terephthalate(PET), started to shift its focus to a more vertically integrated model and therefore moved into the PTA business, leading to acquisitions of three PTA business, leading to acquisitions of three PTA plants last year with a combined capacity of 1.6 million tonnes.
It is the parent company of Indorama Polymers, one of the world's leading PET producers.
"The acquisitions were made because IVL wanted to have a secure feedstock for its PET business as PTA is the key component in production of PET. Additionally, the combined margins of PET and PTA add to more consistency and predictability to earnings and therefore improve the quality of our earnings for investors and stakeholders," Lohia said.
IVL last year acquired Indorama Petrochem PTA, with annual capacity of 710,000 tonnes, and them TPT Petrochemicals PTA, with annual capacity of 550,000 tonnes. Both are located in Rayong Province.
"Today, IVL has interests in PTA,PET and polyester assets, and these are very much interdependent on each other. The effective synergies among them indisputably enhance our operational efficiency," said Lohia.
Subscribe to:
Posts (Atom)