In a bid to meet rising demand, Thai major IRPC Pcl plans to invest US$1.4 bln in the next five years on expanding capacity. With annual capacity to produce 728,000 tons of olefins products and 367,000 tons of aromatics, IRPC is operator of Southeast Asia's biggest integrated petrochemical complex. It plans to upgrade facilities to be among the top quartile of integrated petrochemical complexes in Asia within four years.
By 2014, the company aims to boost return on invested capital (ROIC) to 22% vs last year's 9%, by focusing on diversification rather than size.
Under its five-year "Phoenix projects", IRPC will focus on maximising asset utilisation and 70% of its budget would be spent on capacity and product expansion, as its olefins capacity will rise significantly. The company plans to raise fund via bonds to refinance debt and finance expansion under the Pheonix scheme.
Petrochemicals should contribute more than 50% of profit this year and is expected to rise at least 8-10% in 2010, due to rising capacity as it had no major shutdowns this year. Its 2010 gross integrated margins, which includes both petrochemical and refinery operations, should be stable at around 2009's $9.9 a barrel given sustained demand for petrochemical products helped offset weakness in the refinery business.
IRPC expects its run rate of its 215,000 bps refinery to be around 70% this year, up from 66% last year, while its petrochemical complex would continue to run at 100%.