PTTGC expects 25% revenue increase next year
PTT Global Chemical Plc (PTTGC), the petrochemical business arm of national oil and gas conglomerate PTT Plc, expects 2017 revenue to grow by 25% to nearly 400 billion baht, driven by strong demand and higher profit margins.
President and chief executive Supattanapong Punmeechaow said the significant rise in revenue would come from full capacity utilisation at oil refineries and a rise in capacity from 90% to 93% at petrochemical plants.
Rising revenue is also expected to come from increased demand for petroleum products and petrochemicals next year, he said.
For the oil refinery sector, Mr Supattanapong said gross refining margins next year would average US$5.40 a barrel, up from $5 this year.
The price of aromatic products next year will average $183 a tonne, up from $177 this year, he said, while the price of ethane products will average $270 a tonne, up from this year's $240.
Spread margin between ethane and high-density polyethylene will be higher than this year's average of $750 a barrel.
Mr Supattanapong said the supply of petrochemicals next year would come on line at a huge volume and PTTGC will focus on strong demand, especially in the Mekong region.
Demand for petrochemical products in the Mekong region averages 2 million tonnes a year and demand is expected to rise significantly each year.
PTTGC is targeting sales volume of 2 million tonnes within 2021, equivalent to a sales value of around 100 million baht, which is double from the first nine months of this year.
In the first nine months, petrochemical sales volume in the Mekong region was 71,000 tonnes, worth 5 billion baht.
Sales volume for the year is expected to reach 102,000 tonnes, worth 5.1 billion baht, he said.
Mr Supattanapong said the company planned to switch focus to the Mekong region because it wanted to balance the sources of revenue as China dominates with 50% of export income.
With the company's performance expected to be better next year, he said PTTGC has lined up its MAX project, aimed at enhancing productivity and cutting losses.
Mr Supattanapong said the plan requires a small capital expenditure but it is expected to help boost the company's profit margin by almost $300 million over next year to 2019.
The MAX project is comprised of 800 small plans overseen by 50 petroleum and petrochemical experts.
PTTGC's sales for the third quarter were down by 4% to 89.7 billion baht, with net profit rising by 416% to 6.22 billion baht.
PTTGC shares closed yesterday on the Stock Exchange of Thailand at 59.50 baht, up one baht, in trade worth 541 million baht.