SET-listed PTT Global Chemical (PTTGC), Thailand's largest petrochemical maker, is planning to acquire new assets related to specialty polymer production during the recession.
Chief executive Kongkrapan Intarajang said yesterday that the company foresees a decline in asset value in the coming year, so it will consider asset acquisitions around the globe.
He did not specify regions or name firms.
Many specialty polymer makers are suffering from a lack of liquidity during the coronavirus pandemic because purchase orders have dropped significantly.
"The new assets we plan to acquire will enhance our competitiveness and add value to existing downstream petrochemical products," Mr Kongkrapan said.
The company previously planned to add value to commodity-grade polymers used for aerospace and auto parts. Later it decided to adjust the plan by focusing on medical products, home and personal care items, as well as businesses related to the ageing society.
PTTGC set a budget of 200 billion baht to buy the new assets.
Part of the budget will come from a plan to raise a US$4-billion capital fund, which was approved by company shareholders yesterday.
Mr Kongkrapan said the fund will be also used for debt payment, worth $2.78 billion, in 2020-24, as well as development projects and asset acquisition, requiring $1.05 billion.
During the pandemic, PTTGC managed to offset a huge surplus of jet fuel production after a collapse in demand of 90%.
The company altered production methods by converting jet fuel into diesel and naphtha, a feedstock for petrochemicals for plastic products.
Purchase orders for polymer products, used for durable plastic, also dropped, so the company moved to producing plastic for medical equipment and food packages for home delivery.
The company since mid-May has begun to receive purchase orders from China after temporarily changing export markets to Asean and Australia after the outbreak.
Polymer exports to China usually account for 50% of PTTGC's total export volume. About half of the company's total polymer production is exported to overseas markets.
The company has been cutting operating costs by 10% since March. The reductions began with a 5% chop in January.
For the rest of the year, PTTGC plans to maintain high liquidity in business operations by obtaining 30 billion baht from creditors after earlier issuing debentures worth 15 billion baht in April, Mr Kongkrapan said.