PTTGC plan for polymers set to pay off

published : 27 May 2022 at 04:00

newspaper section: Business

PTT Global Chemical Plc (PTTGC), Thailand's largest petrochemical producer by capacity, is looking forward to a rapid rise in earnings from sales of high-value polymers before 2030, part of its efforts to reduce risks from the commodity-grade polymer market.

The company earlier planned to increase the share of profit from high-value polymers in earnings before interest, tax, depreciation and amortisation (Ebitda) to 35% by 2030.

The proportion is expected to increase to more than 30% this year, up from over 20% last year.

The significant increase comes from new development projects and asset acquisitions in Thailand and overseas after the company decided to focus more on high-value polymers, including bio-based polymers, vinyl chloride, polymer for coating and other speciality-purpose polymers, according to PTTGC.

The company specialised for decades in making commodity-grade polymers, but faced uncertainties in the market caused by oil price fluctuations and the polymer business cycle.

Kongkrapan Intarajang, PTTGC chief executive, attributed the company's growth in the high-value polymer segment to two asset acquisitions in Germany and Thailand.

In December last year, PTTGC acquired Frankfurt-based Allnex Holding GmbH from Allnex Holdings Sàrl, a leading global coating resin maker which runs 33 manufacturing facilities, 23 research and technology support centres, and five joint ventures worldwide.

Eight months earlier, it acquired additional shares in Vinythai Plc, a polyvinyl chloride (PVC) maker in Thailand, through a delisting tender offer to buy a 16% share, which increased PTTGC's stake to 40%, up from 24%. The move was aimed at strengthening PTTGC's position in the PVC supply chain.

PTTGC also formed a partnership with Austria-based Alpla Packaging to build a recycling plant for plastic waste in Rayong with a budget of 1 billion baht.

Construction is expected to be completed soon, followed by a trial run.

Alpla is currently running a plastic packaging solution business in Prachin Buri.