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.
Thursday, November 19, 2009
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.
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