PTT Global Chemical Plc (PTTGC), a petrochemical arm of national oil and gas conglomerate PTT Plc, has acquired some or all of PTT's shares in six subsidiary firms worth 26.3 billion baht, says president and chief executive Supattanapong Punmeechaow.
The move is aimed at bringing all petrochemical-related businesses in the group, ranging from upstream to downstream, under one umbrella to ease operations, add flexibility and improve efficiency, said Mr Supattanapong.
He said PTTGC's board of directors on Tuesday approved the acquisition plan for the six petrochemical subsidiaries in order to make PTTGC the main chemical arm.
Most of the firms are joint ventures with PTT because at the time when PTT formed the ventures, PTTGC was too small for such arrangements.
All transactions to acquire the six firms are expected to conclude by October.
"This will allow us to grow our business with greater flexibility and operations to make them to more efficient, as well as utilise our resources appropriately," said Mr Supattanapong.
The move is aimed at supporting PTTGC's plan to switch to producing high-value added polymers, including plastic compounds for the auto parts industry, building materials and speciality plastics, while the newly acquired firms will help facilitate the process.
The six firms are expected to generate up to 2.4 billion baht a year in extra revenue for PTTGC, said Mr Supattanapong.
PTTGC may also transfer one of the newly acquired companies and spin it off into a new company under Green Global Chemical Plc, which is due to be listed on the Stock Exchange of Thailand (SET) by the middle of this year.
The budget to acquire shares in the companies is part of its capital expenditure (capex) for five years (2017-21) worth 150 billion baht.
Of the total capex, some 40 billion baht has been allocated for its annual maintenance plan, a polyol production facility in Map Ta Phut and a retrofit project aimed at upgrading by-products such as naphtha into high-value products such as ethylene and propylene, with a combined production capacity of nearly 800,000 tonnes a year.
The capex excludes a chemical cracker complex in the US for which PTTGC is still holding talks on a potential partnership. That project, which would have cracker capacity of 1 million tonne a year, is expected to reach a final investment decision by year-end.
PTTGC's acquisitions in the six firms are as follows: 41.44% in HMC Polymer Co; a 50% share each in PTT Asahi Chemical Co and PTT MCC Biochemical Co; 40% in PTT Maintenance and Engineering (PTTME), up from 60%, giving PTTGC 100% control of PTTME; and an additional 50% each in PTT Polymer Marketing Co and PTT Polymer Logistics Co, giving PTTGC complete control of the two firms.
PTTGC predicts 2017 revenue growth of 25% to 500 billion baht.
PTTGC closed yesterday on the SET at 70 baht, up 2.5 baht, in trade worth 1.46 billion baht.