Tasco looking to Venezuelan crude oil
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Tasco looking to Venezuelan crude oil

A road surface finished with asphalt produced by Tasco. The company expects domestic asphalt sales to improve next year.
A road surface finished with asphalt produced by Tasco. The company expects domestic asphalt sales to improve next year.

SET-listed Tipco Asphalt (Tasco), a Thai asphalt manufacturer and supplier, expects to resume buying inexpensive heavy crude oil from Venezuela to deal with the company's raw material constraints, following the easing of trade sanctions imposed by the US on the Latin American country.

The US Office of Foreign Assets Control issued General Licence No.44 in October to ease the sanctions related to petroleum exports from Venezuela.

Tasco wants to acquire heavy crude oil, a feedstock for asphalt manufacturing, from Venezuela as prices elsewhere are higher.

The company contacted Petróleos de Venezuela SA, a state-owned oil and gas company in Venezuela, to discuss purchasing crude oil, said Chaiwat Srivalwat, managing director of Tasco.

It has not been revealed how much oil would be purchased. Before the sanctions, the firm usually imported 12 shipments of heavy crude oil per year.

Tasco needs to test the quality of the oil before making a purchasing decision because it has not bought oil from Venezuela for almost three years, said Mr Chaiwat.

To address the limited supply of this raw material, the company plans to keep buying sufficient quantities of crude oil to manufacture asphalt, from other vendors and purchase asphalt from oil refineries, he said.

Mr Chaiwat said he does not think the asphalt industry will resume growth next year at a rate equal to the level seen prior to the Covid-19 pandemic.

One factor is a delay in the government's spending on infrastructure development projects in the domestic market since the general election in May, but with the government working on a budget allocation plan, he believes the situation should improve by the end of the first quarter next year.

Internationally, fierce competition in the Chinese and Vietnamese markets resulted in a decrease in the price of asphalt, but this could be offset by sales in Thailand with demand estimated at 40,000 tonnes.

Mr Chaiwat expects Tasco's total asphalt sales in 2024 to be on par with this year's sales of 1.15-1.2 million tonnes due to the economic slowdown in the Asian market.

The company's previous record sales stood at more than 2 million tonnes.

In the third quarter of this year, Tasco's revenue dropped by 20% to 5.89 billion baht, down from 7.44 billion baht in the corresponding period last year.

Net profit also plunged by 60% year-on-year to 202 million baht, down from 509 million baht.

The decrease was attributed to lower sales in both domestic and international markets.

Overseas sales declined after the company became more selective in conducting asphalt sales by selling the products to customers that promise higher earnings.

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