Channel 0106 Petrochemical | Chemicals | Plastics

Thai bourse lists Indorama Ventures on February 5

2010-02-07T05:01:00.001-08:00

Indorama Ventures PCL will list and commence trading on February 5. It is the first company to list on the Thai bourse this year, with a market capitalization at its initial public offering (IPO) price of over THB44.00 billion (approx. USD1.33 billion). The company will be in the Industrials Group, Petrochemical & Chemicals Sector, using “IVL” as its trading symbol, and comes from restructuring shareholdings of the business group.

“This listing of IVL supports SET’s strategy in 2010 to encourage large companies to list. SET aims at increasing its market capitalization by THB100 billion (approx. USD3.02 billion) from new listings this year,” revealed SET Chief Marketing Officer, Issuer & Listing Vichate Tantiwanich.

IVL is the holding company of domestic and international firms involved in integrated petrochemical products. These companies have 13 production facilities in five countries worldwide and manufacture and/or distribute polyester fiber and yarn, with highest production capacity in the country, and polyethylene terephthalate (“PET”), with the world’s second largest production capacity.

IVL has a total paid-up registered capital of THB4.33 billion (approx. USD130.74 million), with a par value of THB1.00 each, consisting of 3,352 million existing common shares and 583 million capital increase shares to exchange with shares held by Indorama Polymers PCL (IRP)’s retail investors at 1 IRP share for 1.4150 IVL share. At its IPO on January 25-27, 2010, IVL offered 400 million shares and 60 million Green shoe option shares, or a total of 460 million shares, to the general public at THB10.20 per share. The funds raised will be used for debt repayment and general operations, including as working capital. Bualuang Securities PCL was its financial advisor and underwriter.

The IPO price of THB10.20 per share came from book-building process among institutional investors. IVL’s dividend payment policy is to pay out no less than 30% of profit after taxes and legal reserves.

For more information about Indorama Ventures PCL, please see the company’s prospectus at the Securities and Exchange Commission (SEC) at www.sec.or.th and for general information at www.indoramaventures.com, and www.set.or.th.

PTT Chemical and GE sign gas turbine service agreement

2010-01-30T01:10:00.001-08:00

PTT Chemical Public Company Limited, Thailand’s largest chemical producer and a regional leader in the petrochemical industry, has signed a service agreement with GE (NYSE: GE) in Singapore to ensure the long-term reliability of nine GE gas turbines at PTT Chemical’s site in Map Ta Phut Industrial Estate, Rayong Province, Thailand.

The 13-year Contractual Service Agreement (CSA) worth US$46.1 million or approximately Baht 1,521 million covers the supply of parts, repairs and field services for planned and unplanned outages for gas turbine-generators and accessory equipment, along with performance guarantees.

Veerasak Kositpaisal, President and CEO of PTT Chemical said, “Through this agreement, GE guarantees the continuing reliability and efficiency of the gas turbines, which improves our efficiency and security as well as enables us to maintain our petrochemical production schedule. The CSA also helps us to effectively manage our maintenance budget over the life of the agreement.”

“While we have received equipment orders from PTT Chemical in the past, this marks our first CSA with the company,” said Kovit Kantapasara., GE Energy Country Executive for Thailand and Indochina. “We hope to build on this agreement to provide similar services to other companies in the PTT Group.” Overall, GE has supplied more than 20 gas turbines to the petrochemical business of the PTT Group.

PTT Chemical is a diversified and integrated chemical producer offering a wide variety of petrochemical and chemical products. Its product portfolio includes ethylene and propylene, collectively called olefins, downstream derivatives such as Polymers and Ethylene Oxide and Ethylene Glycol, and oleochemicals. The company’s gas-based plants have a total annual capacity of 2,888,000 tons of olefins, making it Thailand’s largest olefins producer and the second largest in all of Asia.

GE is a diversified global infrastructure, finance and media company that's built to meet essential world needs. GE Energy is one of the world’s leading suppliers of power generation and energy delivery technologies providing integrated product and service solutions in all areas of the energy industry including coal, oil, natural gas and nuclear energy; renewable resources such as water, wind, solar and biogas; and other alternative fuels.

Health Care, Telecommunications, And Chemicals Likely Will See More Upgrades Than Other Sectors In 2010, Article Says

2009-12-15T18:59:00.000-08:00

Credit quality is slowly beginning to stabilize across nonfinancial industries, though rating activity remains more negative than positive, said an article published today by Standard & Poor's, titled "Three U.S. Industries With The Greatest Potential To Improve Their Credit Quality In 2010 (Premium)." As the economy slowly rebounds in 2010, we expect to see areas of improvement, though upgrades likely will trail downgrades in most sectors.

"After reviewing the distribution of outlooks and CreditWatch listings, ratings trends, the performance of bond spreads, and recent operating results, we identified three sectors that we believe have the potential to see an upturn in creditworthiness next year," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "These three are health care, telecommunications, and chemicals."

Health care, which weathered the storm better than most sectors, has a relatively high positive bias (the proportion of issuers with a positive outlook or ratings on CreditWatch positive) and has seen relatively strong operating results.

The telecommunications sector also has fared well during the recession, despite having a number of highly leveraged companies. Improvement in economic and credit market conditions is supportive of continued stabilization and potential improvement in the credit quality of the telecommunications sector.

The chemicals sector has performed much worse than the other two sectors during the recession, though it has begun to show signs of stabilization. Given the cyclical nature of the sector, stronger economic conditions in 2010 could give credit quality a boost.

This article is part of our premium Global Fixed Income Research content, which is available to premium subscribers to RatingsDirect on the Global Credit Portal at www.globalcreditportal.com and to RatingsDirect at www.ratingsdirect.com. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.

PTT Chemical and SMC to join together for developing Thailand’s plastic industry through a strategic network

2009-12-15T05:15:00.001-08:00

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.

TETRA PAK AND BRASKEM SIGN AGREEMENT TO PILOT GREEN PLASTIC IN CARTON PACKAGING

2009-12-07T13:41:00.001-08:00

Tetra Pak, the world leader in food processing and packaging solutions, has reached agreement with the largest Brazilian petrochemical company, Braskem SA, to purchase limited volumes of high-density polyethylene (HDPE) derived entirely from a renewable feedstock. The agreement represents the first move toward using green polyethylene in the carton packaging industry.

Braskem expects the world’s first commercial-scale green polyethylene plant, located in the south of Brazil, to come on stream late next year and is targeting first deliveries to Tetra Pak early in 2011. The new facility will use ethanol derived from sugar cane to produce ethylene, which will then be converted into polyethylene, the world’s most commonly used plastic. It is estimated that the process will result in an overall reduction in greenhouse gas emissions when compared with the traditional process for manufacturing polyethylene.

Under the terms of today’s agreement, Braskem will begin supplying Tetra Pak with 5 Ktons per year of green HDPE from 2011, for use in the production of plastic caps and closures. The volume represents just over 5% of the company's total HDPE demand, and is slightly less than 1% of its total plastics purchases.

“While this pilot project is a small first step into green polyethylene, it marks another milestone in our sustainability journey … and underscores our commitment to finding new ways to use renewable materials in our carton packaging,” said Tetra Pak President and Chief Executive Officer Dennis Jönsson.

“We are very pleased to partner with Tetra Pak to supply a viable renewable alternative to traditional polyethylene. This is another step our longstanding partnership as a Tetra Pak global supplier and demonstrates both companies' commitment to sustainable development,” said Braskem CEO Bernardo Gradin.

As the world’s leading supplier of wood fibre based carton packaging, the concept of renewable feedstock is well established within Tetra Pak and the company is active in promoting the use of responsibly managed resources. Tetra Pak is actively involved with the Forestry Stewardship Council (FSC) and is supporting the development of a sustainability certification standard to guide the production of renewable raw materials to supply the green plastics chain.

Tetra Pak is also a partner in the WWF Climate Savers Programme and is on track to meet its commitment to reduce global carbon emissions by 10% in absolute terms between 2005 and 2010.

In 2002 Braskem issued a public commitment related to its contribution to sustainable development, and it was the first Brazilian company to endorse the UNEP International Declaration on Cleaner Production. Since 2005 it has been listed on the Brazilian Stock Exchange Sustainability Index (ISE Bovespa). All its industrial plants are ISO 14001 certified. This year, in support of the climate change engagement movement, Braskem signed the Copenhagen Communiqué on Climate Change.

“INDORAMA VENTURES” SUBMITS FILING FOR EXCHANGE OFFER TO BUY IRP SHARES

2009-12-07T13:40:00.002-08:00

Petrochemical producer Indorama Ventures Public Company Limited (IVL) has filed a registration statement and draft prospectus (the “Filing”) with the Office of the Securities and Exchange Commission (SEC) to offer IVL newly issued ordinary shares in exchange for shares of its subsidiary Indorama Polymers Public Company Limited (IRP) held by minorities of IRP shareholders.

The move is part of IVL’s shareholding and management restructuring plan, a significant step in preparation for being listed on the Stock Exchange of Thailand (SET). Bualuang Securities Public Company Limited is a financial advisor to IVL.

Under the shareholding and management restructuring plan, in preparation for initial public offering (IPO) and SET listing scheduled for early 2010. Concurrently, IVL will undertake the shareholding structuring between IVL and IRP. Once approved or waivers has been granted by concerned agencies, IVL will conduct a tender offer to exchange its newly issued ordinary shares for all IRP’s shares held by IRP minority shareholders. IRP will be subsequently delisted from the SET on the same day that IVL starts to trade its shares (including those under the tender offer and IPO) on the SET. IRP minority shareholders who accept the tender offer will be able to trade their shares simultaneously with IVL’s newly issued shares on the first trading date of IVL shares on the SET.

According to the shareholding and management restructuring plan, IVL will offer its newly issued ordinary shares as a consideration to IRP minority shareholders who accept the tender offer at a rate of 1.2320 IVL (Bt1 par value) shares for each IRP share (Bt1 par value) with no cash alternative. The total IRP shares that IVL will make a tender offer for are 424.48 million shares, accounting for 30.71 percent of total IRP’s paid-up shares. Such shareholding and management restructuring plan was approved by IRP extraordinary shareholders’ meeting on 27 October 2009.

IVL believes that the new shareholding structure will increase IVL’s transparency and eliminate any potential conflict of interest between IVL and IRP after IVL’s listing. In addition, IVL believes that the current minority shareholders of IRP will enjoy benefits from IVL’s integrated petrochemical value chain business through investments in its subsidiaries.
Editor’s note:

The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States of America. The materials do not constitute an offer of securities for sale in the United States, nor may the securities be offered or sold in the United States absent registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. There is no intention to register any portion of the offering in the United States of America or to conduct a public offering of securities in the United States of America.

The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration exemption from registration or qualification under the securities laws of any such jurisdiction.

CLSA appoints Head of Sales Trading in Thailand and strengthens sales offering, after sweeping 2009 Asiamoney Poll

2009-12-07T13:40:00.001-08:00

CLSA Asia-Pacific Markets, Asia's leading independent brokerage and investment group, has followed its impressive showing in Asiamoney’s annual Brokers Poll with the hire of two industry veterans to further augment the company’s sales and sales trading capabilities.

Michael Frost joins as Head of Sales Trading in Thailand, and institutional sales specialist Lilly Kulvanichpisit brings 17 years of experience to its sales team, both hires represent CLSA’s commitment to expansion in the country and ensuring excellence in execution and client management.

On his decision to join CLSA, Frost said, “CLSA's global reputation for dynamic sales trading, unparalleled product and unmatched growth is what attracted me to the firm. I’m excited to be part of the team."

The growing of the sales team comes just days after Asiamoney’s annual Brokers Poll results were published, with CLSA again voted Thailand’s top brokerage by global fund managers.

CLSA clearly leads Thailand for its research coverage, retaining the top position in Thailand for country research (No.1 in 2008), with CLSA Head of Research Andrew Stotz again ranking Thailand’s No.1 equity analyst (No.1 in 2008).

In addition to being recognised for its leading research, CLSA’s sales services and execution was named the best in Thailand, with the brokerage taking the No.1 place for Best Overall Sales Services for the third consecutive year, and Best in Sales Trading and Best Overall Execution for the second consecutive year respectively.

CLSA also took out the title of Most Improved Brokerage in the last 12 months for the second year running.

CLSA Thailand Country Head, Pekka Johnson, said the new hires were only going to strengthen the sales offering of CLSA Thailand, with both Frost and Kulvanichpisit bringing broad industry and market knowledge and expertise to the table.

“CLSA Thailand’s priority is offering our clients the absolute best in accurate analysis and unrivalled service, and we are committed to upholding the exceptional standards which they have come to expect.”

“I am delighted to welcome Frost and Kulvanichpisit to our team, and look forward to the contribution and enhancement they will offer.”

“The poll rankings are a reflection of a job well done by all at CLSA Thailand, and we intend to carry this momentum forward and continue our expansion into the coming year,” said Johnson.
About Michael Frost

Frost has spent the majority of the last decade in Asia having completed stints in both Bangkok and Singapore, where he was most recently working as Head of South East Asian Sales Trading at ICAP, before which he spent three years at Merrill Lynch as a Director of Sales Trading.

Frost not only brings with him extensive industry experience, but also energy, enthusiasm and leadership finesse that is sure to reinforce the already stellar performance of CLSA Thailand’s sales trading team.
He commenced his new role with CLSA Thailand on 23 November, 2009.
About Lilly Kulvanichpisit

Prior to accepting her role with CLSA Thailand, Kulvanichpisit was with Asia Plus Securities, where she served as Marketing Director since 2002. Prior to this she was with WI Carr, KGI Securities and Merrill Lynch in Institutional Sales.
Kulvanichpisit will start her new role in early December, 2009.
About CLSA Thailand

CLSA is one of the longest standing foreign brokers operating in Thailand and has been serving domestic and international fund managers from Bangkok since 1989.

CLSA Securities Thailand is a full member of the Stock Exchange of Thailand (“SET”) and in 2008 co-hosted with SET Thailand Focus, an investment forum for foreign and domestic Thai investors.

A dedicated team of award-winning analysts covers more than 40 Thai companies in the agribusiness, conglomerates, consumer, financials, healthcare, industrials, media, petrochemicals, oil and gas, property, telecoms and transport sectors.
About CLSA Asia-Pacific Markets

CLSA Asia-Pacific Markets is Asia’s leading, independent brokerage and investment group. The company provides equity broking, capital markets, merger and acquisition, and asset management services to global corporate and institutional clients.

Renowned for service excellence, product innovation and award-winning market intelligence, CLSA has built its reputation on unrivalled equity research and economic analysis which is consistently ranked the best in Asia.

CLSA is one of Asia’s largest independent equity brokers and one of the world’s largest agency brokers. The group’s investment banking services include M&A advisory, equity transactions and public offerings. Alternative asset management is offered through ten Asia-based funds under CLSA Capital Partners.

Founded in 1986 and headquartered in Hong Kong, CLSA has 1,350 dedicated professionals located in 15 Asian cities, plus Dubai, London, Port Louis (Mauritius) and New York. CLSA’s major shareholder is France's Credit Agricole, which merged in 2003 with Credit Lyonnais. CLSA enjoys substantial staff ownership which contributes to its independent stance and operations.

TRIS Rating Affirms Company Rating of “BCP” at “BBB+/Positive” and Affirms Issue Rating of “SIAMDR” at “AA/Stable”

2009-12-07T13:39:00.000-08:00

TRIS Rating Co., Ltd. has affirmed the company rating of The Bangchak Petroleum PLC (BCP) at “BBB+” with “positive” outlook. The rating reflects BCP’s satisfactory refinery operations, strengthened balance sheet, and integration and support from PTT PLC (PTT). The rating also takes into consideration the fluctuations in oil prices and gross refining margins as well as declining demand for refined petroleum products.

The “positive” outlook reflects the expectation that BCP’s new cracking unit will alleviate the existing refinery limitations and yield more high-value refined products. The flexibility in operating two crude distillation unit (CDU) trains will enable BCP to capture new opportunities to maximize gross refining margin and help BCP weather the down cycles of the refining business.

TRIS Rating reported that BCP was established in 1985 and listed on the Stock Exchange of Thailand (SET) in 1993. The company owns and operates an oil refinery located in Bangkok with a capacity of 120 thousand barrels per day (KBD). The company also operates approximately 1,000 service stations under the “Bangchak” brand. After a capital increase in May 2006, PTT became the major shareholder of BCP. As of April 2009, PTT held 29.7% of BCP, the Ministry of Finance (MOF) held 11.2%, and the remaining 59.1% was held by the public. As a simple refinery, BCP produces a higher portion of fuel oil, which is a lower-value product, than a complex refinery. The average product mix during 2005 to 2009 was diesel (35%), fuel oil (32%), gasoline (17%) and other refined products (16%).

TRIS Rating said about BCP’s operating performance that it has continuously improved. The refinery utilization rate increased from 48% in 2006 to 69% for the first half of 2009 as the company has been able to export premium-grade fuel oil to China and Japan. Cheaper domestic crude now makes up a larger portion of stock feed needs. Higher selling prices for premium-grade fuel oil plus a substantial gain from hedging pushed BCP’s total gross refining margin (GRM) to US$13.08 per barrel for the first half of 2009. The marketing margin of BCP improved continually in the second half of 2008 through the first half of 2009, after recording a negative margin in the first half of 2008. BCP could adjust retail prices in line with changes in the ex-refinery prices, resulting in a favorable marketing margin of Bt0.64 per liter in the first half of 2009. Combining the refining and marketing businesses, earnings before interest, tax, depreciation and amortization (EBITDA) improved to Bt7,094 million in the first half of 2009 from Bt4,384 million in first half of 2008.

The product quality improvement (PQI) project will enhance BCP’s refinery performance and gross refining margin. The refinery will be able to process more varieties of crude, especially heavy and sour crude. The proportion of gasoline and middle distillates is expected to increase from the existing level of 64% to 82%. In addition, two trains of CDU, operating at 80 KBD and 40 KBD, may enhance gross refining margin. The CDU with 80 KBD of capacity may be utilized as a complex refinery to maximize the amount of gasoline and middle distillates produced. The other CDU may operate as a simple refinery to produce very low sulfur fuel oil (FOVS) for export.

TRIS Rating said, BCP’s capital structure remained healthy, with a debt to capitalization ratio of 42.5% as of June 2009. The construction of the cracking unit and the bio-diesel plant have been completed and will be ready for the Commercial Operation Date (COD) in late 2009. BCP’s capital expenditures in the coming years will be moderate and the debt to capitalization ratio is expected to maintain at 40%-45%.

TRIS Rating sees the global economic slowdown has reduced demand for refined petroleum products. New refining capacity in the Asia-Pacific region during 2009-2011 would possibly lead to a regional over-supply situation and, in turn, put more pressure on gross refining margin.

At the same time, TRIS Rating has also affirmed the “AA” rating with “stable” outlook for the Bt4,000 million in depository receipts on BCP’s subordinated convertible debentures (BCP141A) issued by Siam DR Co., Ltd. (SIAMDR). The rating reflects the credit support, in terms of principal protection, provided by the Ministry of Finance (MOF) to buy back the issue at the original offering price should BCP be unable to make the scheduled payments on time. The rating also reflects the additional security elements embedded in the transaction structure and the credit quality of the underlying issuer, BCP. The “stable” outlook for the depository receipts is derived from the principal protection provided by the MOF and the credit quality of BCP.

PTT Chemical and SMC to join together for developing Thailand’s plastic industry through a strategic network

2009-11-19T05:33:00.000-08:00

PTTCH raises revenue goal to B150bn

2009-11-12T22:07:00.000-08:00

       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 VIEWS OF A PIONEERING BUSINESSWOMAN

2009-11-08T04:16:00.000-08:00

       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.

PTTCH sees volume lift driving sales

2009-11-04T05:11:00.000-08:00

       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.

CARBON-CREDIT FIRST

2009-10-28T19:28:00.001-07:00

       IRPC, a major petrochemical and energy firm, yesterday signed agreements with GE Energy and GE carbon in connection with its investment plan for a 220-megawatt combined heat and power plant worth about US$200 million (Bt6.7 billion) in Rayong province.
       The project will be the country's first carbon-credit trade as far as a largescale power plant is concerned, said IRPC president Pairin Choochotetavorn.
       IRPC's 20-year-old power plant is currently fuelled by bunker oil to generate electricity, causing a great deal of pollution due to the release of carbon dioxide into the atmosphere.
       This will be replaced by the new combined heat and power plant, which will use natural gas and generate 420 tonnes of steam per hour.
       Pairin said the 220MW plant, which will be operational in early 2011, will reduce CO2 emission by about 400,000 tonnes per year.
       As a result, the project is qualified to join the global carbon-trading scheme, as it will contribute to a reduction in global warming.
       At present, a tonne of CO2 is traded at around $15. The global credittrading scheme is expected to be operational in the next eight months.
       IRPC signed the del with GE Energy to buy gas turbines and other equipment for the new power plant.
       It also appointed GE Carbon as adviser for the project to sell its carbon credits in the international market as part of the Clean Development Mechanism.
       Given its scale, IRPC's project will contribute to getting on for a half of the reduction in CO2 releases targeted by the Energy Ministry, which aims to cut the Kingdom's emissions by an overall 1 million tonnes per year in the initial stage.
       Satish Kashyap, director of GE Carbon, said a total of 525 projects had been certified worldwide for the sale of carbon credits.
       Thailand currently has only 24 of these projects, while China has proposed more than 600 and India 500. Malaysia has 30 projects and South Korea, 33.
       Pairin said the IRPC facilities were not situated in the pollution-control areas designated by the Central Administrative Court, which recently issed an injunction on 76 industrial projects in Map Ta Phut and other parts of Rayong. However, the company would be affected if PTT were to revise its investment plans in the pollutioncontrol areas, he added.

IRPC invests $200m in plant efficiency

2009-10-28T19:27:00.001-07:00

       IRPC Plc will invest US$200 million to improve the efficiency of its power plant in Rayong, shifting from fuel oil to a gascombined cycle system to cut carbon emissions by 400,000 tonnes per year.
       The new 220-megawatt combinedcycle power plant is expected to start operating at the end of next year after a delay of nearly one year, said CEO Pailin Chuchottaworn.
       As the new technology allows the plant cut greenhouse gases, the company in-tends to register the plant under the UN's clean development mechanism (CDM) in order to sell carbon credits.
       IRPC has appointed General Carbon Pte, a unit of US-based General Electric,as its consultant on carbon trading and the registration process.
       The company expects to start selling carbon credits within eight months.
       "Upgrading our power plant will not only improve our production cost, but also will prevent damage from power disruptions that have happened quite often lately in Rayong," said Dr Pailin."We can also gain some revenue from carbon trading."
       In the past two years IRPC has had five power outages, each costing it 100 million baht."We couldn't stand losses like that anymore since every time the power drops we have to burn crude and chemicals that were in the production line. Otherwise these liquids could turn into bombs and then the damage would be even worse. But the burning creates bad smells that bother nearby communities," he said.
       The power plant is a part of the first phase of a $288.7-million, five-year investment plan that began in 2007. Other elements include downstream petrochemical product expansion and safety system improvements.
       IRPC is considering revising its $1.184-billion second-phase investment budget because of the global slowdown. This includes deep-sea port upgrading, improvements to oil-refining facilities and downstream chemical expansion.
       IRPC shares closed yesterday on the SET at 4.36 baht, down two satang, in trade worth 302.6 million baht.

TMB buyer loans for PTTPM dealers

2009-10-20T20:43:00.001-07:00

       TMB Bank has entered into an agreement with PTT Polymer Marketing, a PTT subsidiary manufacturing plastic pellets, to support PTTPM's dealers with buyer loans.
       The partnership is for TMB to provide PTTPM's dealers with its Maxi OD for Buyer, an overdraft facility that promises a high credit line at a low interest rate, for the purchase of plastic pellets. Maxi OD for Buyer offers dealers additional purchasing power at a lower cost.
       The dealers also benefit from OD's payment convenience and flexibility unmatched by other types of loans. Dealers also have good credibility since they can immediately make timely payment to PTTPM through TMB SME's Maxi OD for Buyer. And with TMB's introduction of a real-time online system combining order placement with supply-chain management in full circle, PTTPM and its dealers are able to carry out transactions and keep tabs on their progress all the time. Boontuck Wungcharoen, chief executive officer of TMB, said after the signing ceremony yesterday that Maxi ODfFor Buyer offered a new option for PTTPM's dealers. The product initiative was developed out of a realisation that efficient financing would increase liquidity and funds vital to business success in the current environment.
       The financial support is consistent with TMB's commitment to advancing all sizes of SMEs, he added.
       "I believe our service will be one of the factors strengthening Thailand's business sector, and we will never stop thinking and offering choices to meet the needs of all our customer groups in line with our customer-centric approach," he said.
       Pramin Phantaweesak, PTTPM's managing director, said Maxi OD for Buyer represented one of many financial initiatives the company had prepared for dealers and buyers of its products in and outside Thailand.
       It will help them accomplish their business mission of selling PTT brands of polymer products such as InnoPlus, for which PTTPM's production capacity will reach 1.6 million tonnes next year, said Pramin.

Magnificent seven

2009-10-13T04:00:00.000-07:00

       In the most important, most revered event since the invention of the brontosaurus trap,Microsoft shipped the most incredibly fabulous operating system ever made; the release of Windows 7 also spurred a new generation of personal computers of all sizes at prices well below last month's offers.The top reason Windows 7 does not suck: There is no registered website called Windows7Sucks.com
       Kindle e-book reader maker Amazon.com and new Nook e-book reader vendor Barnes and Noble got it on; B&N got great reviews for the "Kindle killer"Nook, with dual screens and touch controls so you can "turn" pages, plays MP3s and allows many non-B&N book formats, although not the Kindle one;Amazon then killed the US version of its Kindle in favour of the international one, reduced its price to $260(8,700 baht), same as the Nook; it's not yet clear what you can get in Thailand with a Nook, but you sure can't (yet) get much, relatively speaking, with a Kindle;but here's the biggest difference so far,which Amazon.com has ignored: the Nook lets you lend e-books to any other Nook owner, just as if they were paper books; the borrowed books expire on the borrower's Nook in two weeks.
       Phone maker Nokia of Finland announced it is suing iPhone maker Apple of America for being a copycat; lawyers said they figure Nokia can get at least one, probably two per cent (retail) for every iPhone sold by Steve "President for Life" Jobs and crew via the lawsuit,which sure beats working for it -$6 (200 baht) to $12(400 baht) on 30 million phones sold so far, works out to $400 million or 25 percent of the whole Apple empire profits during the last quarter;there were 10 patent thefts, the Finnish executives said, on everything from moving data to security and encryption.
       Nokia of Finland announced that it is one month behind on shipping its new flagship N900 phone, the first to run on Linux software; delay of the $750(25,000 baht) phone had absolutely no part in making Nokia so short that it had to sue Apple, slap yourself for such a thought.
       Tim Berners-Lee, who created the World Wide Web, said he had one regret:the double slash that follows the "http:"in standard web addresses; he estimated that 14.2 gazillion users have wasted 48.72 bazillion hours typing those two keystrokes, and he's sorry; of course there's no reason to ever type that, since your browser does it for you when you type "www.bangkokpost.com" but Tim needs to admit he made one error in his lifetime.
       The International Telecommunication Union of the United Nations, which doesn't sell any phones or services, announced that there should be a mobile phone charger that will work with any phone; now who would ever have thought of that, without a UN body to wind up a major study on the subject?;the GSM Association estimates that 51,000 tonnes of chargers are made each year in order to keep companies able to have their own unique ones.
       The Well, Doh Award of the Week was presented at arm's length to the United Nations Conference on Trade and Development; the group's deputy secretary-general Petko Draganov said that developing countries will miss some of the stuff available on the Internet if they don't install more broadband infrastructure; a report that used your tax baht to compile said that quite a few people use mobile phones but companies are more likely to invest in countries with excellent broadband connections; no one ever had thought of this before, right?
       Sun Microsystems , as a result of the Oracle takeover, said it will allow 3,000 current workers never to bother coming to work again; Sun referred to the losses as "jobs," not people; now the fourth largest server maker in the world, Sun said it lost $2.2 billion in its last fiscal year; European regulators are holding up approval of the Oracle purchase in the hope of getting some money in exchange for not involving Oracle in court cases.
       The multi-gazillionaire and very annoying investor Carl Icahn resigned from the board at Yahoo ; he spun it as a vote of confidence, saying current directors are taking the formerly threatened company seriously; Yahoo reported increased profits but smaller revenues in the third quarter.
       The US House of Representatives voted to censure Vietnam for jailing bloggers; the non-binding resolution sponsored by southern California congresswoman Loretta Sanchez said the Internet is "a crucial tool for the citizens of Vietnam to be able to exercise their freedom of expression and association;"Hanoi has recently jailed at least nine activists for up to six years apiece for holding pro-democracy banners. Iran jailed blogger Hossein "Hoder" Derakshan for 10 months - in solitary confinement.

IRPC invests $200m in plant efficiency

2009-10-09T21:51:00.000-07:00

Ruling may cost PTT 10% of earnings

2009-10-05T23:25:00.000-07:00

       The earnings of PTT Group and its subsidiaries may fall 10% in 2010 due to court-ordered construction delays at its projects in the Map Ta Phut industrial estate in Rayong, according to Thanachart Securities.
       The court ruling, which affects 76 industrial projects, could also delay PTT's planned consolidation of its petrochemical units, the brokerage said yesterday.
       "If construction of PTT's sixth gas separation plant cannot finish by the first or second quarter of next year, the group's net profit in 2010 will be lower than the forecast," said Pichai Lertsupongkit, senior vice-president at Thanachart.
       The brokerage earlier forecast PTT's earnings would reach 78.13 billion baht next year, up from an estimated 54.88 billion this year.
       The 25 PTT projects affected by the court ruling in-B54.88bn clude PTTCH's one-million-tonne ethylene cracker, which was expected to start in the final quarter of 2009. In the worst-case scenario, PTTCH's new cracker and downstream businesses could be delayed from the original schedule to the end of 2010, slicing almost 36% from forecast earnings of 8.66 billion baht.
       Without its oil upgrading unit, PTTAR,an oil refining and petrochemical maker,could fall 5% short of its projected earnings of 11.6 billion baht, Thanachart said in its report released yesterday.
       The uncertainty continues to hang over the share prices of PTT, PTTAR,PTTCH and Siam Cement, another m-
       jor industrial conglomerate affected by the ruling, the report said.B78.13bn
       "It's highly likely the announcement of merger deals among PTT associates could be delayed further primarily due to the court order to suspend various projects of PTTAR and PTTCH."
       The suspension means the revision of valuations and swap ratios of these firms, the report added.
       "We believe the private sector should be protected as they have followed the government agencies' rules," it added.
       PTTAR executives yesterday declined to give a figure for the impact of the court decision, saying the affected companies could not evaluate the size of damages with the current information.
       "We don't even know what we can do, what we cannot do and what we have to do," said Chainoi Puankosoom,chief executive of PTTAR.
       "Each subsidiary of PTT is examining the court ruling in detail in order to evaluate the actual damages. We can't say anything otherwise we will be considered as bad guys. It's the government's responsibility to clear the issue."
       The company is considering how to cope with the effects of the operations'suspension, he added."We will talk with our contractors for the US$220-million upgrading project to consider our case as force majeure , as it was beyond our control. We hope they may understand and will not be to harsh in suing us," said Mr Chainoi.
       Construction on the upgrade was due to start by the year-end and operations were planned to start in 2011, he said.
       The Energy Ministry will also have to put off the new Euro 4 emission standard to 2011, since the upgraded oil refining units that could meet the standard cannot operate due to the court's ruling.
       "We are ready to do anything whether they [the environmentalists and the court] want us to go ahead, or make a new EIA (environmental impact assessment), health impact assessment or do both EIA and HIA, just say it. So far we are stuck. Everything seems very uncertain," said Mr Chainoi.
       PTT shares closed yesterday on the SET at 258 baht, down three baht, in trade worth 767.5 million baht. PTTAR fell 40 satang to 24.10 baht.

BIG INVESTORS SEEK WAYS TO MITIGATE PAIN OF INJUNCTION

2009-10-02T18:58:00.000-07:00

       Petrochemical companies are brainstorming to ease difficulties arising from the Central Administrative Court's injunction against 76 industrial projects, while the government has not yet filed an appeal to allow the projects to proceed.
       PTT chief financial officer Tevin Vongvanich said yesterday that the brainstorming session would also involve Siam Cement Group and the Federation of Thai Industries.
       "If the court does not accept the government's appeal, we as sufferers may ask the court for relaxation," he said.
       Surayuth Phettrakul, vice industry minister, said the Attorney-General's Office was completing the appeal, which could be submitted to the court today - or Monday at the latest.
       He said the Industry Ministry wanted to be thorough, but would do its best to file the appeal, or the ruling would further affect investor confidence.
       Executives of PTT and its subsidiaries yesterday expressed grave concern over the delay of their 25 projects - planned by eight companies and with a combined investment of Bt120 billion - particularly the sixth gas-separation plant and the project to meet the Euro IV emission standard.
       Most of the projects are slated for completion from late this year through to 2012.
       PTT president and CEO Prasert Bunsumpun said the injunction affected confidence, job creation and the pace of industrial development, as well as the overall economy.
       He insisted the group had done its very best to cooperate in controlling pollution in Rayong and had taken into account local communities' demands. He expects a win-win solution for all parties.
       To Tevin, the delay in the gas-separation plant, which is 90 per cent completed and waiting for an operating licence, will have a negative supply-chain effect on subsidiaries and creditors aside from delaying jobs related to the projects.
       Some subsidiaries, which are waiting for raw materials, would need to import the items instead.
       Meanwhile, the Euro IV project delay could prevent the group's refinery from meeting the 2012 deadline as prescribed by the Energy Ministry.
       As key subsidiaries like PTT Chemical and PTT Aromatics and Refining could be financially affected, the group may need to review their value and conclude its planned consolidation later than this month's original schedule, Tevin said.
       Chainoi Puankosoom, CEO of PTT Aromatics and Refining, said he would call for a meeting with refiners next week for a consensus in delaying the Euro IV deadline.
       The company's environment-upgrade project is slated for completion in December 2011, but the injunction means the project would never be able to meet the deadline.
       Stock analysts have revised down the earnings forecasts for listed companies that are affected by the order, particularly PTT Chemical and Siam Cement.
       According to Asia Plus Securities, on assumption that commercial operation would be delayed by a year, PTT Chemical is expected to be affected the most, with a 35-per-cent drop in its 2010 earnings projection. Siam Cement's earnings projection has been cut by 11 per cent.
       Veerasak Kositpaisal, president of PTT Chemical, which has eight of the projects, worth a combined Bt13 billion, said petrochemical prices were changing rapidly and this required fast adjustment. "Thailand's plastic-product export value is now Bt90 billion, against a Bt120-billion value for plastic-pellet exports. What we're doing now is to produce more added-value products, which could push the combined export value above Bt300 billion," he said.
       Veteran investment banker Kongkiat Opaswongkarn also urged speedy action on the government, saying that the injunction would damage the country's image and may affect its credit rating. He said it was a very critical issue, as the ruling went against Thailand's policy to attract investment and this confirmed the country's management failure over the past three years.
       Srisuwan Chanya, president of the Anti-Global Warming Association, which is one of the plaintiffs in the case against government units that led to the injunction, said the association would lodge a counter-appeal against the government's appeal as soon as the latter was filed. He said the government should instead speed up the establishment of an independent environment body and issue health-impact assessment guidelines.
       In the next two weeks, the group is also filing a charge against Industry Minister Charnchai Chairungrueng for putting only eight industries on the ministry's list of projects with serious impacts, against the proposed list of 19.

PLASTIC FIRMS TO PROTEST I'NESIAN DUTY

2009-09-30T21:40:00.001-07:00

       The government and plastics producers will file a case to the World Trade Organisation complaining of an unfair investigation and imposition by Indonesia of a high anti-dumping duty on Thai-made BOPP plastic film.
       The Indonesian government had already imposed a provisional anti-dumping duty on Thai BOPP (biaxially oriented polypropylene) products of 21.86 per cent from May 8 to September 8 - against the normal duty rate of 5 per cent - citing that the products were being dumped and were therefore damaging its local industry.
       It is now imposing an effective anti-dumping duty of 21.86 per cent on Thai BOPP film from today, with the new rate scheduled to be in place for five years.
       Thai BOPP film exports to Indonesia plunged by 62 per cent to Bt355 million during the four months of the provisional anti-dumping duty.
       Komite Anti Dumping Indonesia (KADI) has unfairly investigated the Thai plastic products, as the organisation has not probed BOPP products from China, which is another major exporter to Indonesia, Nilsuwan Leelarasamee, secretary to the Federation of Thai Industries (FTI), said yesterday.
       He said the FTI and the Foreign Trade Department would soon file a petition to the WTO alleging an unfair ruling by the Indonesian government.
       "The Indonesian government has unjustly investigated and imposed an anti-dumping duty on Thai BOPP film. As Indonesian companies have been taken over by Chinese plastics firms, its government has not investigated China's BOPP film exports to Indonesia," said Nilsuwan.
       To impose a fair anti-dumping duty, Jakarta must also include the export value from China, he added, but only Thai BOPP film faced a provisional - and now full - anti-dumping duty. According to the FTI, the unfairly imposed duty will create a loss of Bt1.2 billion for Thai BOPP film exports per year.

Map Ta Phut ruling hits SET

2009-09-30T21:38:00.000-07:00

       Share prices of companies in the networks of PTT Plc and Siam Cement Group fell in a range of 1% to 7% during trading yesterday as the country's leading industrial conglomerates faced a new blow over unsettled pollution problems at Map Ta Phut.
       Among the 76 projects worth 400 billion baht ordered to halt construction by the Administrative Court on Tuesday,25 are being developed by subsidiaries and affiliates of PTT, said PTT chief financial officer Tevin Vongvanich.
       These ongoing projects include a sixth gas separation plant, due to be operational by the end of this year,petrochemical plants, and an upgraded refinery to meet Euro 4 emission standards.
       The court ordered the suspension of operating permits for new investments in Map Ta Phut Industrial Estate in Rayong, following an outcry from environmental activists and residents who claim the permits violated Section 67 of the 2007 Constitution.
       "The (temporary) suspension of these projects will affect our trading and contract partners, financial institutions, and related industries across the supply chain. Moreover, it will put at risk over 100,000 jobs, including hiring in [Map Ta Phut]," Mr Tevin said.
       "We are planning to hold talks with concerned government agencies to seek ways to soften the impact from the court's ruling, or we may lodge an appeal."
       Siam Cement said the court order would force its wholly owned subsidiary,SCG Chemicals, to halt nearly completed construction of its upstream naphtha cracker, as well as projects of its downstream subsidiaries and joint-venture units, expected to be completed between late 2009 to mid-2011.
       "In this regard, SCC will be working closely with all relevant government authorities to jointly conclude a solution for all concerned parties, while minimising any effect on SCG Chemicals'investment projects," president and chief executive Kan Trakulhoon said in a statement to the Stock Exchange of Thailand yesterday.
       Also affected is SET-listed Glow Energy, whose 660-megawatt power plant is likely to be postponed.
       Kim Eng Securities said the court was expected to review the case immediately when an appeal is lodged.
       "This issue cannot drag on for long because it will affect the sentiment of the stock market in general," said a Kim Eng spokesman.
       However, Bualuang Securities said the court ruling was unlikely to push the overall index down even though it caused a sudden shock.
       "This news represents a negative
       surprise and is certainly a near-term headwind against the stock of any company with facilities in or near Map Ta Phut," Bualuang said.
       Surong Bualakula, senior executive vice-president for the international business unit of PTT, said Thailand's competitiveness had been crimped by the Map Ta Phut case.
       The development could prompt PTT to look at neighbouring countries such as Cambodia, which has larger natural gas and oil reserves, as well as a pipeline network. The Cambodian government is considering a plan to build an energy complex in Sihanoukville, he said.
       "Map Ta Phut is the centre of Thailand's industrial development region with a competitive advantage in the gas-based petrochemical industry," Mr Surong said."What downstream manufacturers or automakers will invest in Thailand now because they cannot be sure if they will have enough raw materials in the future?"
       Shares of Siam Cement (SCC) closed yesterday at 222 baht, down 5 baht, in trade worth 1.11 billion. PTT shares rose 3 baht, but PTTAR fell 1.10 baht to 24.40 in trade worth 1.7 billion while PTTCH fell 4 baht to 73.25 in trade worth 844 million. GLOW fell 1.75 baht to 32.75 in trade worth 135 million.

BANGKOK KBANK HELPS PTTPM BOOST ASIA EXPOSURE

2009-09-30T21:37:00.001-07:00

       PTT Polymer Marketing (PTTPM), a petrochemicals marketing arm of the PTT Group, is going ahead with its plan to achieve Bt100 billion in annual earnings by 2015 through a financial agreement with Bangkok Bank.
       The deal, which was signed yesterday, binds BBL to provide financial and business support to PTTPM customers and dealers across Asia.
       "Customers and dealers in other parts of Asia can take advantage of this service, which will provide them with the liquidity they need to expand their sales of PTTPM products. This way, we can support PTTPM as it expands outside Thailand," BBL president Chartsiri Sophonpanich explained.
       Earlier, the bank had agreed to provide supply chain financing to PTTPM dealers within Thailand.
       Under the newest deal, customers and dealers will be given improved access to liquidity, a reduction in delivery time as well as lower fees. No letter of credit would be required and customers can choose to do their transactions in any currency, which would make the process even more efficient.
       PTTPM's marketing director Pramin Phantawesak said the company aims to raise its annual sales to Bt100 billion and hopes to become an international polymer trading house by 2015. PTTPM recently established representative offices in several Asian countries including Vietnam and China, as well as a sub-branch in Dubai. Bangkok Bank's branches in Thailand and overseas will help PTTPM achieve its growth target.
       To maintain a robust growth of its business, the company had earlier cooperated with Kasikornbank to develop what it claims is the world's first electronic letter-of-credit system, providing greater convenience and accuracy for customers. Through BBL's Bualuang iSupply system, dealers can access online dealer payments and financial service.
       PTTPM senior manager Narongchai Pisutpunya said earlier the electronic system would enhance productivity in these areas by up to six times and reduce operating costs by Bt25 million per year.

VNT plans new plant worth B8bn

2009-09-27T19:52:00.001-07:00

       The SET-listed vinyl and chlor-alkali producer Vinythai Plc (VNT) will invest 8 billion baht to build a epichlorohydrin plant in Rayong following its acquisition of Solvay Biochemical Thailand Co (SBT).
       The company's board has approved the buyout of SBT, the Thai unit of the Belgium-based Solvay group, in a deal worth 360 million baht, said Varaiporn Piphitpattanaprapt, vice-president for finance and accounting.
       The acquisition would strengthen Vinythai's position in the business of environmentally friendly chemical compounds, she said.
       The epichlorohydrin project was formerly planned by SBT but little work had been done. Vinythai will take over the project and build the new plant at its existing site. The 8 billion baht would cover production of epichlorohydrin and expansion of Vinylthai's hydrogen chloride and caustic soda capacity to ensure sufficient supplies of raw materials to the epichlorohydrin plant.
       The main feedstock for epichlorohydrin production will be glycerin derived from the production of biofuels such as palm oil and other vegetable oils.
       Ms Varaiporn said the new plant was scheduled to be operational in the first quarter of 2012, with an annual production capacity of 100,000 tonnes.
       Demand is growing rapidly in AsiaPacific for epichlorohydrin, an essential feedstock for epoxy resins used in such applications as corrosion protection coatings, as well as the electronics, automotive, aerospace and power-generating windmill industries.
       Vinythai views that the new project based on environmentally sustainable technology will raise its competitive advantage and enable the company to become a key player in the Asia-Pacific region in Epichlorohydrin business.
       "The project will also diversify Vinythai's product range and add significant value to the company," she noted.
       The investment is subject to approval from relevant governmental authorities and shareholders.
       Solvay Chemicals and Plastics Holding B.V. is among the major shareholders of Vinythai with ownership of 49.99%, along with PTT Chemical Plc (24.98%), and Charoen Pokphand Group (11.87%).
       VNT shares closed yesterday on the SET at 6.80 baht, up 10 satang.

VINYTHAI TO BUY SOLVAY THAI UNIT IN EPI PRODUCTION EXPANSION

2009-09-27T19:50:00.000-07:00

       Vinythai has earmarked Bt8 billion to expand production of epichlorohydrin (EPI)
       Of tha,t Bt5.75 billion will be used to acquire Solvay Biochemicals (Thailand), a manufacturer of EPI and other chemical and plastic products.
       Solvay, an international chemical and pharmaceutical company headquartered in Brussels, is a shareholder in both companies. It has operations worldwide, with annual revenus of US$9.2 billion (Bt309 billion)
       In a filing with the Stock Exchange of Thailand, Vinythai said its board had approved the acquisition of the unit from Solvay Chemicals and Plastics Holding and the Solvay Group. Vinythathai said its board had approved the acquisiton of the unit from Solvay Chemicals and Plastics Holding and the Solvay Group. Vinythai will use the Solvay's Epicerol process, which can produce 100,000 tonnes of EPI a year.
       The EPI project will be managed by a new subsidiary to be set up after Vinythai finishes acquiring Solvay Biochemicals (Thailand), the company said in the statement.
       Under the capacity-increase plan, the compamy's board approved expenditure of Bt 2.25 billion to increase annual production fo chlorine by 90,000 tonnes and caustic soda by 100,00 tonnes, in order to support the EPI project.
       Vinythai expects a rate of return of 15 per cent on the project. The company sees this investment as a way of redcuing the cyclical effects in the petrochemical industry, especially the PVC business.
       Twenty per cent of the output will be sold domestically and the rest exported. Vinythai will finance the project with cash flow and bank loans.
       Vinythai is now awaiting Board of the project.
       The company's board approved expenditure of Bt2.25 billion to increase annual production of chlorine by 90,000 tonnes and caustic soda by 100,000 tonnes, in order to support the EPI project.

"FORBES ASIA" SHOWS WEALTHIEST THAIS HAVE WEATHERED THE STORM

2009-09-27T19:49:00.000-07:00

       Thailand's wealthiest appear to have been quite resilient to the global economic downturn and political instability as beverage tycoon Chaleo Yoovidhya gets named the Kingdom's richest person for the third consecutive year, while millionaires in the food and agriculture businesses also enjoy boosts in their net worth.
       The latest Forbes Asia's Thailand Rich list showed that the combined wealth of Thailand's 40 richest people remained unchanged at US$25 billion (Bt838.92 billion), with the net worth of 77-year old Chaleo, who co-founded Red Bull, also stayed flat at $4 billion.
       The second man on the list was Dhanin Chearavanont, head of the agribusiness conglomerate Charoen Pokphand Group, one of the world's biggest feed and poultry companies. Dhanin, who moved up the ranking by two notches, is also the biggest gainer in dollar terms - his net worth rose by $1 billion to $3 billion.
       Other tycoons in the food and agriculture businesses also enjoyed a boost in their net worth. Among them are sugar barons - Mitr Phol Sugar's Isara Vongkusolkit (eighth with $900 million) and Khon Kaen Sugar Industry's Nantha Chinthammit (18th with $360 million) - as well as seafood tycoon Kraisorn Chansiri (28th with $175 million).
       Bucking the trend, however, was Charoen Sirivadhanabhakdi of Thai Beverage, whose net worth fell to $2.8 billion from $3.9 billion last year. Ranked fourth on the list, he also suffered the largest decline among his fellow tycoons.
       The third richest in Thailand are descendants of the founder of Central Group, Tiang Chirathivat, including families of his three wives and 25 children. Their combined wealth rose by $100 million to $2.9 billion. Their shared net worth is largely derived from their ownership of Central Retail and their 60 per cent stake in listed developer, Central Pattana.
       Still firmly in the limelight is Thaksin Shinawatra, who is the 16th richest with a net worth of $390 million, down from $400 million last year. The fugitive former PM is the 19th on the list who saw their net worth drop this year.
       Also poorer is hospitality tycoon William E Heinecke who dropped five places to No 20 as his wealth of $350 million dropped by $110 million this year. Political turmoil and the global recession seem to have taken their toll on his business empire and personal net worth, but the irrepressible optimist moves on.
       "You learn through every crisis, every challenge," Heinecke said in the latest issue of Forbes Asia.
       This year's list has four new faces led by long-time Thai resident Aloke Lohia, who has the highest ranking at 19th with a net worth of $355 million. The 50-year old tycoon started Indorama Polymers, which earned $1.2 billion in sales last year.
       Other newcomers include Worawit Weeraborwornpong of Siamgas and Petrochemicals (30th with $165 million) and lingerie magnate Virot Thanalongkorn (35th with $130 million). Both made their companies public last year before the markets tanked.
       The fourth newcomer is Pongsak Viddayakorn, board member of Bangkok Dusit Medical Services, who was ranked 36th with $125 million.
       When compiling the list, public assets were calculated using share prices and exchange rates as of September 10. For privately held wealth, Forbes Asia estimated what they would be worth using information from the Commerce Ministry and other sources. This ranking, unlike the Forbes' billionaires list includes family holdings shared by individuals and their children, grandchildren and siblings.

IRPC, PTTAR IN JOINT UPGRADE OF REFINERY TO MEET EURO 4

2009-09-24T20:46:00.000-07:00

       Local integrated oil and petrochemical producer IRPC will co-invest with PTT Aromatics and Refining to upgrade the latter's refinery to meet the Euro 4 standards.

       The new standards will be implemented by the beginning of 2012.
       "We'll swap oil products among the subsidiaries of the PTT Group and co-invest in the upgrading project of PTTAR's oil refinery. We've not yet finalised the form of the co-investment, but we are expected to make a minor investment in this project," said IRPC chief executive Pailin Chuchottaworn.
       He declined to disclose the exact investment budget for the project.
       Pailin said it would not be worth it to upgrade all of the facilities to meet Euro 4 standards, because then the remaining premium oil output, which would also be produced at high cost, would only be sent to other countries.
       Thai Oil and Bangchak have already upgraded their facilities to comply with Euro 4 standards.
       Meanwhile, IRPC has targeted revenue of Bt180 billion this year, down from Bt245 billion last year, due mainly to lower prices for oil and petrochemical products.
       Seventy per cent of revenue will come from oil refining and the rest from petrochemicals.
       Pailin said the third quarter would be better for the company than the second quarter, thanks to rising prices of oil and petrochemical goods.
       He said the price of plastic pellets was about US$1,200 (Bt40,300) per tonne, up 20 per cent from the average in 2008, when oil and petrochemical prices fluctuated wildly.
       He said the price for plastic pellets could remain at the $1,200 level next year.
       "The price may tend to soften, due to greater supply from new production plants in the Middle East. But there's a chance demand will spike from the Shanghai Expo and the Asian Games in China," he said.
       IRPC yesterday introduced an electronic transaction system, in cooperation with Kasikornbank, to boost customer satisfaction and the efficiency of its plastic trading system, since it exports to more than 100 countries.
       He said the company was trying to improve its office system, which would play a significant role in enhancing business performance and helping achieve the goal of being in the top 25 per cent of Asian petrochemical complexes by 2014.
       The new system will reduce operation costs by Bt30 million per year, he said.

IRPC to beat goal with B180bn sales

2009-09-24T20:44:00.000-07:00

       SET-listed IRPC Plc expects to beat its previous target for the year and top 180 billion baht in revenue due to strong petrochemical demand from China.
       The country's leading petrochemical manufacturer and oil refiner now predicts its revenue will drop by 26% this year from the 244.7 billion baht earned in 2008.
       But the company has performed much better in the current quarter as plastic resin is now priced at US$1,200 per tonne, up from $1,000 earlier, chief executive Pailin Chuchottaworn said yesterday.
       "Our performance is obviously good in the current quarter and better than the second quarter. The business outlook is now brighter than what we saw earlier," said Dr Pailin.
       IRPC, which is 37% owned by PTT Plc, now projects revenue of 180 billion baht this year based on oil at about $70 per barrel. In the quarter to June,the company posted a net profit of 2.42 billion baht, down from 5.12 billion in the same period last year, in line with a decline in revenue of 45% to 40.3 billion baht.
       The petrochemical business will account for about 54 billion baht of this year's estimated revenue. The figure is expected to be maintained in 2010.
       "Plastic prices will stay at $1,200 per tonne at best next year. The demand from China will remain strong but the outlook remains uncertain, depending largely on additional petrochemical capacities to come on stream next year,"he said.
       IRPC is now utilising 75% of its refining capacity of 215,000 barrels per day.
       The petrochemical spread has improved slightly in the current quarter from the previous quarter, while the refining margin has weakened marginally. The company's gross integrated margin is in double digits, said Banlue Chantadisai, senior executive vicepresident for corporate accounting and finance.
       Average refining capacity is expected to stay at about 150,000 to 160,000 barrels per day in 2009, compared with 180,000 barrels last year. The existing output is enough to serve IRPC's petrochemical business.
       Executives also said that IRPC was likely to go for a product swap option with PTT Aromatics and Refinery Plc,another PTT petrochemical and refining unit, to upgrade its refineries to meet the Euro 4 emissions standard.
       The Euro 4 project is part of IRPC's $1.2 billion five-year investment plan to become a top integrated petrochemical producer in Asia by 2014.
       PTT Plc, Thailand's largest energy company, has studied a merger of its petrochemical and refining affiliates including IRPC and PTTAR. The plan is expected to be finalised next month.
       IRPC yesterday launched its "Ideal Solution" service to enable petrochemical trading transactions on personal digital assistants (PDA) worldwide. The system will help reduce operational costs by 30 million baht per year.
       Shares of IRPC closed yesterday on the Stock Exchange of Thailand at 4.48 baht, down six satang, in trade worth 1.69 billion baht.

BASF BUILDS CENTRE TO HELP KARENS

2009-09-23T21:57:00.001-07:00

       BASF, a global chemical company, will provide Bt3.7 million to the Karen Kids Society to construct a youth centre for young adults in Ban Pa Deng, Petchaburi province.
       The contribution, provided via the BASF Social Foundation, is aimed at improving the standard of living of local residents.
       The Karen Kids Youth Centre will provide educational opportunities for young adults from the ethnic minority along with Thai residents, focusing on income generating activities such as handicraft skills.
       The centre will also provide separate living and sanitation facilities. The construction of the 390-square-metre centre began last month and should be completed by the middle of next year.
       Karen Kids Society president and founder Juergen Strafe said: "When we first discovered the children, they were living in a rat- and insect-infested hovel with a leaking roof.
       "The dirt and smell were unimaginable. Today, they enjoy clean, healthy accommodation, with proper sanitation, freshly laundered bedding and a hygienic kitchen.
       "The next step is to build a youth centre where older kids can learn a trade. Within a few years, they will be able to leave the camp and make a life for themselves using these new skills."
       To Pracha Chivaporntip, chairman and managing director of the BASF Group in Thailand, the project in Ban Pa Deng is one of many the company has sponsored over the years as part of its sustainable development efforts.
       With its existing education centre, Karen Kids provides shelter, education, clothing and food to more than 80 children aged 10 months to 14 years now living as displaced persons.
       With a three-pronged plan focusing on education, health and self-reliance, the centre provides a place to meet, play, and study.
       It also provides "child safe" Internet access. Each Saturday, the camp offers Thai-and English-language classes for children and adults.
       A vaccination schedule is maintained, and children will be taught ways to improve their immune system.
       A weaving programme, vegetable garden and a fishpond.
       The first phase of the construction, together with a sleeping area for volunteers and camp managers, was completed last year.
       Its second phase, with a two storey centre, will include training facilities for sewing, weaving and carpentry.

EXCLUSIVE INTERVIEW: MELAMINE GIANT'S PASSAGE TO INDIA

2009-09-23T21:55:00.000-07:00

       Srithai Superware, the world's largest manufacturer of melamine tableware, plans to invest Bt200 million in its first melamine factory in New Delhi and will be pondering investments in other Indian cities such as Mumbai and Chennai.

       "We see India as a potential market enjoying strong growth. Setting up the melamine factory in New Delhi will help us expand our distribution more easily," Sanan Angubolkul, the company's chairman, said.
       "We expect to open at least four factories for melamine and other plastic products in India over the next 10 years," he added.
       He told The Nation that the firm had recently opened its first trading office in New Delhi, which would be responsible for selling the products via direct-selling channels. The first lot of melamine products has already been shipped to New Delhi and will officially enter the market next month through a direct-selling network.
       Srithai has been exporting melamine tableware to India for nearly three decades now through local importers and wholesalers, but this is the first time that it is directly penetrating the market.
       The factory in New Delhi scheduled to open next year will produce 100 tonnes of melamine products per annum. Srithai owns 70 per cent of the business and local agents hold the rest.
       Srithai has been operating a plastic factory in Vietnam's Ho Chi Minh City for nearly 13 years now, and the plant started producing melamine last year.
       "We have big expansion plans for our manufacturing facilities for melamine and plastic products in both India and Vietnam, where we hold majority shares in the factories. In Ho Chi Minh, we own about 95 per cent of the stake," Sanan said.
       He added that Srithai currently exported melamine products to more than 100 markets around the world and aims to become a world-class manufacturer for plastic products and top five plastic producers in Asia over the next five years. It also plans to make the most of the Asean free trade agreement, to be signed next year, under which import duty would be reduced to zero next year from the current 10 per cent.
       Supporting this move is the new strategic initiative called "Change Management", which has been implemented for a year and a half now, and applied in all major development areas such as technology, productivity and innovation, both at the end product and manufacturing process. It also includes developing its employees into "world citizens".
       Srithai's production facility is now 40 per cent automated and will be fully automated in the next five years.
       At present, Srithai has four plants in Thailand manufacturing plastic and melamine products on Bangkok's Suksawad Road, Bangpoo Industrial Estate in Samut Prakan, Bangpakong Industrial Estate (Amata City) in Chon Buri and the Suranaree Industrial Estate in Nakhon Ratchasima.
       Last year, it invested Bt800 million in upgrading machines to reduce energy consumption as well as installing a robotic system and automatic moulding. About Bt400 million has been set aside for upgrading local plants per annum. Since its earnings before interest, tax, depreciation and amortisation (EBITDA) are about Bt500 million a year, part of it would be used to finance the upgrade, Sanan said.
       Srithai expects to achieve Bt5.1 billion in total sales this year, including export, which is a 35 per cent increase from Bt4.9 billion last year.
       "We expect to increase our gross margin from last year's 19 per cent year to no less than 21 per cent this year. We also expect our total sales to reach Bt10 billion within the next five years," Sanan added.

Indorama plans delisting

2009-09-23T21:54:00.001-07:00

       Indorama Polymers, the SET-listed PET resin maker will seek delisting once its Indian-based parent company, Indorama Ventures (IVL), has completed acquiring it through a share swap option.
       IVL will make an initial public offering of its new shares, make a tender offer for all shares of IRP held by other shareholders by swapping them with its new shares and subsequently delist IRP from the Stock Exchange of Thailand, according to the company's statement filed with the SET yesterday.
       Existing IRP shareholders will become IVL shareholders through the process.
       Under the restructuring plan, IVL share price is calculated by dividing the reference IRP share price of 14 baht per share by the swap ratio at one IRP share per 1.23 IVL shares.
       For the swap ratio, IVL will calculate the ratio by dividing the reference IRP share price of 14 baht per share by the IPO price with a 3% discount.
       The whole process should be finished by the end of October.
       IRP now has 1.38 million shares. IVL,its major shareholder with 69.29%, conducts business through petrochemicalmaking subsidiaries.
       The company's operations in 13 plants in five countries have increased significantly since 2003.
       IRP shareholders will meet on the restructuring plan on Oct 26, with the share register to attend fixed on Oct 5.
       Shares of IRP closed on the Stock Exchange of Thailand at 13.40 baht,up 90 satang, in trade worth 249.9 million baht.

Bayer names Dutchman as next CEO

2009-09-16T07:26:00.000-07:00

       The German chemical and pharmaceutical company Bayer AG announced yesterday that it had tapped Marijn Dekkers to take over as its chief executive in October 2010.
       Dekkers,51, who has both Dutch and US citizenship, is currently the head of Waltham, Massachusetts-based laboratory equipment maker Thermo Fisher Scientific Inc.
       Current CEO Werner Wenning, who extended his contract by eight months until next September, will step down shortly before his 64th birthday.
       The company said Dekkers would join its management board at the beginning of 2010. It said that in a transitional phase he also will be the chief executive of its Bayer HealthCare unit - succeeding Arthur Higgins, who is leaving the company during the first half of 2010"for personal reasons.

TPC upbeat on 2010 earnings

2009-09-14T19:55:00.001-07:00

       Thai Plastic and Chemicals, Southeast Asia's largest PVC maker, said yesterday it was optimistic about 2010 earnings as demand should recover due to government stimulus measures.
       It should also expand its capacity once the transfer of some output to a Vietnamese plant is completed.
       "We're more confident about 2010,largely because we believe things such as volume and demand will rise after the economy has bottomed out this year,"said managing director Kanet Khaochan.
       But the market leader, which is 45%owned by top Thai conglomerate Siam Cement and whose main rivals are unlisted Indonesian firm PT Asahimas Chemical and number-three Vinythai,cannot escape the downturn this year.
       It expects lower net profit because product spreads have been squeezed and production has dropped as it moved capacity overseas, Mr Kanet said.
       "China is still playing a big part in terms of demand and this is also coupled with governments' spending efforts to stimulate all kinds of business activities,which, of course, are going to need PVC as a key material," he said.
       He gave no specific forecast, but five analysts polled by earnings tracker Thomson Reuters I/B/E/S forecast a net profit of 1.9 billion baht in 2010, down 2.8% from the forecast for this year.
       "Our business this year hasn't been as bad as we expected, but ... the overall picture is still not going to be able to compete with 2008," he said, referring to last year's 2.2-billion-baht profit.
       TPC, which has capacity of 750,000 tonnes a year in plants in Vietnam, Indonesia and Thailand, has been moving capacity of 90,000 tonnes a year to its existing Vietnamese plant, Mr Kanet said.
       Once completed, its capacity would approach 850,000 tonnes in 2009. The company expected capacity to reach one million tonnes a year within three to five years, which would put it on track to becoming the world's eighth-largest PVC maker, Mr Kanet said.
       In the PVC industry, Shintech of the US, part of the Shin-Etsu group, is the world's largest producer, followed by Taiwan's Formosa Plastics and Belgium's Solvay SA, which has a 50% stake in Vinythai.
       The average PVC price in 2009 is expected to be $780 a tonne, down from $1,000 in 2008. By year-end, the price should be about $900, assuming an oil price of around $70 a barrel.
       Shares of TPC closed on the Stock Exchange of Thailand at 18 baht yesterday, down 20 satang, in trade worth 8.06 million baht.

HIGHEST CLOSE IN 13 MONTH

2009-09-11T05:58:00.000-07:00

       Shares yesterday punched through the 700-psychological level to an almost 13-month high, propelled by the insatiable buying spree of foreign investors and the rally in Asian stock markets.The SET Index extended its sixday winning streak by starting the day with a gain before heading further north to close up 1.08 per cent at 703.09 points, off the day's high of 710.62. Turnover was brisk at Bt36.68 billion. The closing level was unseen since August 18 of last year.
       PTT and its subsidiaries were at the centre of the rally. PTT advanced 1.54 per cent to Bt264, PTT Exploration and Production (PTTEP) gained 1.03 per cent to Bt147, Thai Oil (TOP) surged 2.17 per cent to Bt47 and PTT Aromatics and Refining (PTTAR) edged up 1.92 per cent to Bt26.50, while IRPC dipped 0.04 per cent to Bt4.28, off the day's peak at Bt4.40.
       Mobile phone service providers also climbed up on a report that the telecom regulator will by the end of this year open bids for the 15year licences to provide longdelayed thirdgeneration services.
       Advanced Info Service (ADVANC) advanced 3.42 per cent to Bt98.25, Total Access Communication (DTAC) jumped 13.92 per cent to Bt45 and True Corp (TRUE) soared 11.11 per cent to Bt3.20.
       Foreign investors bought a net Bt3.8 billion of shares, bringing their total net purchases to Bt42.05 billion since the beginning of this year.
       Most other major Asian bourses gained on the day. South Korean shares closed 2.30 per cent higher, the benchmark Nikkei225 index moved up almost 2 per cent, the benchmark Hang Seng Index closed up 1.05 per cent and the Straits Times Index of Singapore added 1.05 per cent.
       The Shanghai Composite Index, which covers A and B shares, bucked the buoyant trend, losing 0.73 per cent.
       Pongrat Ratanataranananda, vice president at Bualuang Securities, said the continuing fund flow and stabilised oil price kept the Thai stock market - dominated by energy stocks at over 30 per cent of overall market capitalisation - on a upward trend.
       The absence of negative factor also boosted the stock market's euphoria.
       The upside, however, would be limited following the strong rally over the past six months, she warned.
       "The SET Index would reach 720-730 points in technical terms. Our house is upgrading the SET target this year from the previous estimate at 680 points," she said.
       Among the securities under PTT's umbrella, she recommends investors snap up PTTEP, as its price has yet to reach a new high, unlike its parent and its associated firms.
       Pichai Lertsupongkit, senior vice president of Thanachart Securities, took the same line.
       The bullishness would continue, thanks to capital inflows, he said.
       He could not estimate the overdue steep correction in the Thai stock market at the moment as investor appetite in risk assets is increasing following the emergence of economic recovery signs.
       "It's possible to see the stock market plunge around 40-50 points as it has never consolidated in six months," he said.
       Montree Sornpaisarn, CEO of Kim Eng Securities (Thailand), said his research house has upgraded the SET target this year to 750 points from 700.
       The heavy trading turnover also indicated higher confidence of investors.
       Margin loans extended by the country's largest brokerage by market share have risen significantly to Bt2.3 billion, compared with Bt1.3 billion under normal stock market conditions and Bt900 million during bear markets, he said.
       Sukit Udomsirikul, assistant managing director of Siam City Research Institute, said the stock market's trek above the 700 level could be ascribed to capital inflows after the US dollar hit a oneyear low.
       In the short run, the stock market's effervescence would be extended within a range of 730-680 points.
       The local political situation would be a depressing factor, as the red shirts will hold a rally on September 19 and the police chief's resignation raised concerns about a rift in the coalition government, he said.

Thai Caprolactam betters 2009 revenue prediction

2009-09-03T20:00:00.000-07:00

       The Thai petrochemical operations of Japan's Ube Group are expected to post slightly better-than-expected sales revenue of 18.5 billion baht this year, thanks to rebounding global demand.
       Thai Caprolactam Plc (TCL) provides 9.2 billion baht in revenue to Ube Group (Thailand), which includes Ube Nylon (Thailand) and Thai Synthetic Rubber Co, said TCL vice-president Suriyon Vonpen. In 2008, the group sold 21.7 billion baht worth of goods, with 13 billion generated from TCL, he added.
       "After last month's performance update, we are projecting revenue this year will be slightly better than the original forecast," said Mr Suriyon.
       The demand for caprolactam, the material for producing nylon, has improved since the second quarter after plunging in the final quarter of 2008. The downturn forced TCL to cut its production in the first quarter of this year - the first-ever reduction since the $400-million factory opened almost 12 years ago.
       "We have seen a V-shaped price rebound and we already ramped up production since the second quarter. Our plant in Rayong is now running at 95%of maximum capacity," he added.
       Caprolactam's price bounced back to $2,000 per tonne after halving from its peak of $2,400 last year. Ammonium sulphate has also improved to $120-130 per tonne, but still lower than $200 in 2008. TCL, the only manufacturer of its kind in Southeast Asia, has the capacity to produce 110,000 tonnes of caprolactam a year, together with 460,000 tonnes of ammonium sulphate as a byproduct.
       About half the caprolactam output is exported to Asian markets such as China and Taiwan, while ammonium sulphate serves the domestic fertiliser market only,as supply is short of annual demand of 700,000 to 800,000 tonnes, he said.
       But the industry's outlook depends on the global economy. TCL conducted a feasibility study on expanding caprolactam capacity to 130,000 tonnes a year for about 1 billion baht. The expansion would take at least two years,hopefully enough time for the global economy to fully recover, he said.
       Ube Industries controls 91% of TCL,set up by Prachai Leophairatana, the founder of Thai Petrochemical Industry (TPI) Group, now renamed IRPC Plc.

Srithai, PTTCH plan "water lillies"

2009-08-31T19:32:00.000-07:00

       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.

PROSPECTING FOR SUCCESS

2009-08-31T05:21:00.000-07:00

       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.

ALLIANCE WANTS HALT TO MAP TA PHUT PROJECTS

2009-08-27T19:11:00.000-07:00

       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.

Local plastics producers optimistic

2009-08-26T19:19:00.000-07:00

       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.

UKEM increases sales target to B2bn

2009-08-26T19:18:00.000-07:00

       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.

PTT embraces SCM system

2009-08-25T21:26:00.000-07:00

       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.

IRPC TO ADD VALUE TO LAND RESOURCES

2009-08-25T21:25:00.000-07:00

       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.

PTT TO SPEND BT1 BN ON SUPPLY-CHAIN MANAGEMENT

2009-08-25T21:24:00.000-07:00

       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.

IRP on course for revenue record

2009-08-22T17:38:00.001-07:00

       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.

PTT rig leaks off Australia

2009-08-22T17:37:00.001-07:00

       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.

INDORAMA SEES 20% GROWTH IN 2009 REVENUE

2009-08-22T17:35:00.000-07:00

       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.

Asean market faces hitch on chemicals

2009-08-20T21:38:00.000-07:00

       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.

FOUR PROJECTS GET LONG-AWAITED LICENCES

2009-08-19T19:47:00.000-07:00

       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.

PTTAR predicts H2 gain

2009-08-17T21:39:00.000-07:00

       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.

DuPont streamlines business

2009-08-17T21:37:00.000-07:00

       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.

EGAL HURDLE DELAYS PROJECT APPROVALS

2009-08-17T21:35:00.000-07:00

       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.

INDORAMA BANKING ON LAST YEAR'S ACQUISITIONS

2009-08-17T21:33:00.000-07:00

       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.