PTTGC looking for new export markets

PTTGC looking for new export markets

PTT Global Chemical Plc (PTTGC), Thailand's largest petrochemical producer, wants to seek new export markets to offset declining volume from China as demand for petrochemicals from that country is bearish as a result of the Covid-19 outbreak.

Polymers exported to China account for 25-27% of total shipments. Roughly 50% of PTTGC's polymer production is for overseas markets.

President and chief executive Kongkrapan Intarajang said PTTGC is looking to Southeast Asia as a second option.

"We also want to shift export markets in the near future to reduce the impact from the government's ban of single-use plastic bags," he said.

"PTTGC already set up two subsidiaries in Southeast Asia since last November: GC Marketing Solutions Co in Vietnam and GC Logistics Solution Co in Indonesia."

Both new companies are seeking potential for single-use plastic markets, hoping to offset the impact from the Covid-19 situation in China.

Mr Kongkrapan said PTTGC has secured only 1-2% of export orders from China during the outbreak.

"The outbreak should ease in the second quarter and we expect shipments to China will resume or even increase during the second half," he said.

Mr Kongkrapan said 2020 sales volume is expected to grow by 10% to above 12 million tonnes because of the growth of the global petrochemical market.

Moreover, PTTGC is expanding new production capacity, scheduled to operate in the second half of 2020.

He said petrochemical products are expected to bottom out in 2020 after global prices reached their lowest level because of the US-China trade tensions and new production facilities of other producers in Asia.

Gross refinery margin is also expected to rebound to US$4-5 per barrel in 2020 from $2-3 per barrel in 2019.

PTTGC is conducting a feasibility study to develop a petrochemical cracker in the US, expecting to disclose a final investment decision in mid-2020.

The cracker is upstream production with an annual capacity of 1.5 million tonnes.

PTTGC plans to acquire downstream petrochemical assets in the US to make a fully integrated production facility.

PTTGC partnered with South Korean construction and chemical company Daelim Industrial to study the feasibility of development for the US complex.

"We have the financial capability to raise a budget of 200 billion baht from both loans and debenture issuance, excluding cash on hand at 300 billion baht, so when we find good deals, the US complex will not be a financial burden to expanding business," said Mr Kongkrapan.

He said PTTGC plans to improve the US petrochemical complex as a second production hub with a budget allocation of roughly $700 million over the past six years.

"The US has a lot of potential," said Mr Kongkrapan.

"It has abundant shale gas resources that could be separated for fundamental raw materials for petrochemicals at reasonable prices."


Do you like the content of this article?
COMMENT

Chinese cops intercept shipment of drug precursor

Chinese police have intercepted a shipment of hydrochloric acid bound for the Golden Triangle region, which will likely affect the production of 3.9 billion methamphetamine pills.

2 Apr 2020

US weekly jobless claims hit record once again

WASHINGTON: The number of Americans filing claims for unemployment benefits last week shot to a record high for a second week in a row — topping 6 million — as more jurisdictions enforced stay-at-home measures to curb the coronavirus pandemic, which economists say has pushed the economy into recession.

2 Apr 2020

Curfew imposed

All people in Thailand are banned from leaving home from 10pm to 4am starting Friday in the government’s latest move to contain the spread of coronavirus.

2 Apr 2020