IRPC to overhaul production

IRPC Plc, one of the country's leading petrochemical makers, is planning a major overhaul in its production lines, administration and asset management, says the chairman of the executive board, Norkhun Sitthipong.

"We plan to submit the details for approval from the executive board [on July 21]," said Mr Norkhun.

The affiliate of PTT Plc is also considering resuming its olefins cracker production improvement plan, worth more than US$1 billion, which had been scrapped last year because of its cost.

"Production really needs to be enhanced to improve efficiency so we can boost our revenue. If we do this [improvement programme] when the industry is weakened, we will save a lot on expenses as construction costs have declined significantly," said Mr Norkhun.

The overhaul plan includes an environmental management system and a corporate social responsibility programme focused on creating understanding with local communities. This could prevent delays of its expansion plans in the future, he said.

The plan also focuses on cutting overall costs and maximising revenues from existing assets.

IRPC plans to provide services on its existing deep-sea port to other companies as it now uses only 50% of loaded capacity. Furthermore, with its vast 9,000-rai bank of land, it is considering diversifying into industrial land development in Rayong with 6,000 rai, while it may sell off its 1,700 rai in Songkhla and many plots in Chiang Mai if it deems them irrelevant to the business.

"We will probably develop an industrial estate in Rayong because the industrial land in the Map Ta Phut area is now congested," he said.

IRPC will co-operate with its sister company under the PTT umbrella, PTT Aromatics and Refinery Plc, by sharing facilities and raw materials procurement, with marketing a part of its plan.

IRPC also expects to use natural gas as the main fuel for its steam production, rather than the fuel-oil it used earlier, and this should cut fuel expenses by 150 million baht per year.

Still, Mr Norkhun pointed out that IRPC would focus on its core businesses including oil refining, petrochemicals, and its deep-sea port because property development is simply to raise revenue.

"Once the improvement program finishes, IRPC will be one of the strongest oil refiners and petrochemical producers in the region," he added.

However, Mr Norkhun stressed the plan would not affect its 7,000 employees.

"We will no longer be talking about either early retirement or layoffs. The current number of workers matches the workload," he said.

Layoffs have been the major concern of staff from the former Thai Petrochemical Industry ever since PTT and other state enterprises took the majority stake and management control three years ago.

IRPC shares closed yesterday on the SET at 3.10 baht, up two satang, in trade worth 71.7 million baht.

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