PTTGC signs thermoplastics JV

PTTGC signs thermoplastics JV

Output can serve several local industries

From left  Masaaki Ito, president of Kuraray, Masahiro Fujita, senior managing executive of Sumitomo Corp, and Supattanapong Punmeechaow, president and chief executive of PTTGC, celebrate signing a joint venture to develop heat-resistant plastics in Thailand.
From left  Masaaki Ito, president of Kuraray, Masahiro Fujita, senior managing executive of Sumitomo Corp, and Supattanapong Punmeechaow, president and chief executive of PTTGC, celebrate signing a joint venture to develop heat-resistant plastics in Thailand.

Japanese companies Kuraray Co and Sumitomo Corporation have agreed to build a production facility for engineering and thermoplastics in Thailand in a joint venture with PTT Global Chemical Plc (PTTGC), the country's largest petrochemical firm.

The agreement was signed yesterday in Tokyo for front-end engineering and design for the facility to make high-heat resistant polyamide (PA9T) and hydrogenated styrenic block copolymers (HSBC).

The project is expected to be located in Rayong's Hemaraj Industrial Estate, which is adjacent to its existing olefin cracker.

Supattanapong Punmeechaow, PTTGC's president and chief executive, said the company did a feasibility study for two years before the three partners reached an agreement.

He said the amount of capital expenditure will not be revealed until next year. Commercial operation is due to start at the end of 2020.

Production capacity per year of PA9T (high-temperature nylon) is expected to be 13,000 tonnes while that of HSBC is 16,000 tonnes.

Kuraray plans to conduct a feasibility study on a production facility of MPD (3-methyl-1,5-pentanediol) with output of 5,000 tonnes a year to feed PTTGC's other production facilities.

PA9T has thermal and mechanical properties that are appropriate for high-end engineering of plastics and could replace some metal used in the auto parts industry.

HSBC is appropriate for auto parts, building material, medical equipment and consumer products such as swimming equipment and toothbrushes.

Mr Supattanapong said the agreement is part of a plan to add value to commodity-grade polymer products to avoid intensified competition in Asia.

The project will receive a tax holiday for 15 years and a lengthy land title agreement, up to 99 years. It is part of PTTGC's capital expenditure plan for 2014-18 worth around US$4.5 billion.

PTTGC is expected to have earnings before interest, taxes, depreciation and amortisation of US$120 million from its expansion in Thailand and France.

This year PTTGC's new capacity expansion includes aromatics, hexamethylene diisocyanate (HDI) and phenol 2 in Rayong's Map Ta Phut and HDI in France's Lyon. He said the company is expanding capacity by 7% from 8.8 million tonnes per year, with the higher output available by the end of this year.

PTTGC is expected to finalise a plan to develop a shale gas-based ethane cracker project in Belmont County, Ohio, in the US early next year. The project has been delayed since the collapse of global oil prices in 2014.

PTTGC shares closed on the SET yesterday at 57.50 baht, up 1.50 baht, in trade worth 594 million baht.

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