Siam Cement plans Thai petrochemical expansions


Cementhai Chemicals, part of Thailand's Siam Cement Group, is embarking on a $410 million investment plan to expand its petrochemical production capacities in Thailand. The investment forms part of the Thai firm's stepped-up strategy to capitalize on the recent rise in world petrochemical prices, which are expected to peak in 2003, and to become a leading Asia-Pacific chemicals producer. The move is also in line with the group's continuing shift to petrochemicals from a broader business base. It is shedding its paper business and suspending new investments in cement and construction materials.

Cementhai Chemicals' investment will comprise the first major expansion undertaken in Thailand in 3 years. Most petrochemical concerns in the kingdom have been hard hit by the economic crisis that begin in mid-1997. Thai Petrochemical Industry PLC, the country's largest petrochemical firm, was recently ruled insolvent by the Central Bankruptcy Court, as it was unable to repay its $3.5 billion debt.

Cementhai Chemicals Pres. Apiporn Pasawat says the expansion projects planned by the firm's subsidiaries and joint ventures involve seven products: ethylene, high-density polyethylene (HDPE), polypropylene, purified terephthalic acid (PTA), tert-butyl alcohol (TBA), polypropylene (PP) compound, and styrene monomer (SM).

The seven projects are:

Rayong Olefins Co. Ltd.�Boosting ethylene output to 800,000 tonnes/year in third quarter 2001 from 600,000 tonnes/year.

Thai Polyethylene Co.�Raising HDPE production to 600,000 tonnes/year in fourth quarter 2001 from 400,000 tonnes/year.

Thai Polypropylene Co. (two plants)�Increasing combined polypropylene output to 320,000 tonnes/year in fourth quarter 2000 from 260,000 tonnes/year.

Siam Mitsui PTA Co. �Doubling PTA production to 800,000 tonnes/year in third quarter 2003.

Thai MMA Co.�Stepping up TBA output to 95,000 tonnes/year in third quarter 2001 from 50,000 tonnes/year.

Grand Siam Composites�Boosting PP compound production to 19,000 tonnes/year in first quarter 2001 from 11,000 tonnes/year.

Siam Styrene Monomer Co.�Raising SM output to 300,000 tonnes/year in second quarter 2000 from 240,000 tonnes/year.

The Thai Board of Investment has already granted the PP compound and SM projects certain privileges, including tax holidays and a tax waiver on imported equipment. The other five projects are under consideration by Thai authorities.

Apiporn said the expansions would improve economies of scale and enhance Thailand's petrochemical industry. Most of the increased production will be exported, mainly to Southeast Asia, Japan, and China.

The expansion is expected to boost Cementhai Chemicals' revenue over the next 3 years by at least 10 billion baht ($263 million) to 50 billion baht in 2003 from 40 billion baht anticipated this year.

Sector recovery
The investment is geared towards taking advantage of improvements in petrochemical profitability.

"We foresee that demand for petrochemicals�especially olefins and polyolefins�will catch up with supply by 2002," Apiporn said. "The supply side is expected to begin to tighten by 2003 and then push prices to a peak again in late 2003 or early 2004," he added.

Although global prospects are promising, Apiporn predicts that petrochemical supplies will exceed demand for the next 2 years, as at least four major operators will start production in the last quarter of this year. Those operators include Formosa Plastics group in Taiwan, ExxonMobil Corp.'s in Singapore, and two producers in the Middle East.

According to Apiporn, the price of polyolefins is projected to rise to $1,200/tonne by 2003-04 from the current $660. The price of styrene monomer is expected to triple from the current $400/tonne. And prices for ethylene and propylene are expected to rise from $400/tonne and $700/tonne, respectively, to $1,200 each.

The price upswing will spur another round of investment in the Thai petrochemical sector soon, he noted. In the next few years, producers in Malaysia, Singapore, and the Middle East will be Cementhai Chemicals' main competitors, he says.

Related Articles

Second ExxonMobil crude tanker nears service

01/12/2015 The second of two new US-flagged crude oil tankers belonging to SeaRiver Maritime Inc., the marine affiliate of ExxonMobil Corp., has been built an...

ExxonMobil forecasts 35% higher world energy demand by 2040

12/15/2014 A significantly bigger global middle class, expanded emerging economies, and 2 billion more people will contribute to 35% higher world energy deman...

ExxonMobil forecasts 35% higher world energy demand by 2040

12/10/2014 A significantly bigger global middle class, expanded emerging economies, and 2 billion more people will contribute to 35% higher world energy deman...

Firms' third-quarter earnings climbed amid lower crude oil prices

12/08/2014 A sample of 58 oil and gas producers and refiners based in the US recorded a combined 38% jump in profits for this year's third quarter compared wi...

Chapman to succeed Pryor as ExxonMobil Chemical president

11/24/2014 Neil A. Chapman is expected to assume the roles of president of ExxonMobil Chemical Co. and vice-president of ExxonMobil Corp. following the retire...

Induced seismicity research effort identifies information gaps

11/10/2014 A federally coordinated effort to determine whether oil and gas activities are related to growing reports of induced seismic activity has identifie...

ExxonMobil, Linn to make second asset exchange this year

10/06/2014 ExxonMobil Corp. has agreed to trade interest in 500 net acres from South Belridge field near Bakersfield, Calif., to Linn Energy LLC, Houston, in ...

ExxonMobil 'winds down' Arctic well, obeys sanctions

09/29/2014 ExxonMobil Corp. released a statement that it is complying with all US sanctions on Russia after news reports that the operator had halted operatio...

AAPG ICE: ExxonMobil outlines international approach to unconventional development

09/22/2014 Global energy demand is expected to increase 35% to 2040, translating to 120 billion boe/year, or nearly 350 million boe/d, stated Rocky Becker, vi...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected