SCG staking out Indonesia petrochemical complex
Siam Cement Group (SCG), the industrial conglomerate, is setting its sights on developing a petrochemical complex in Indonesia.
President and chief executive Roongrote Rangsiyopash said the company is conducting a feasibility study on the viability of launching the project with potential partner PT Chandra Asri Petrochemical Tbk (CAP).
The two companies have been traditional partners for years, as SCG has owned a 30.6% stake in CAP since 2011. That, in turn, has encouraged the two firms to join together in developing a petrochemical complex in Indonesia.
"CAP wants to expand its second petrochemical plant as well as develop a new petrochemical complex in Indonesia, so it has invited us to join the project, since we have been a good partner for many years," Mr Roongrote said.
He said the feasibility study for the petrochemical complex is expected to be completed in 2018.
But Mr Roongrote declined to give further details about the investment budget or the projected production capacity of the complex.
CAP is the largest vertically integrated petrochemical company in Indonesia and has facilities in Ciwandan, Cilegon and Puloampel, Serang in Banten province.
Regarding another petrochemical plant in Vietnam, Mr Roongrote said SCG would push forward with the US$4.5-billion project, of which the company holds a 71% stake, with Vietnamchem controlling the rest.
But the investment budget is likely to exceed $4.5 billion, as construction and other costs are expected to rise, he said.
"New investment at the petrochemical complex in Vietnam is expected to be finalised this year, possibly in the last quarter," Mr Roongrote said. "The construction and refinery facilities should be completed in 2022."
Chaovalit Ekabut, SCG's vice-president overseeing finance and investment, said the petrochemical complex in Vietnam would be designed to produce olefins from naphtha with annual capacity of 1.6 million tonnes a year. That contrasts with annual domestic olefin production of 3 million tonnes a year.
For 2017, Mr Roongrote said SCG will maintain its revenue growth target of 5-6% from 423 billion baht last year, largely due to the Thai government's massive investment in infrastructure projects that are expected to help boost demand for cement, one of the company's core businesses.
He said Thai domestic cement demand is expected to rise 1-3% this year to 39 million tonnes.
Mr Roongrote said SGC has set aside 100 billion baht for investment in 2016-17, 65 million of which is slated for this year.
SCG reported total revenue of 116.3 billion baht in the first quarter of this year, up 6% from the same period last year.
Net profit was 17.3 billion baht, up from 13.5 billion in 2016, Mr Roongrote said.
SCC shares closed yesterday on the Stock Exchange of Thailand at 548 baht, up six baht, in heavy trade worth 2.05 billion baht.