Petronas Chemicals to boost specialty chemicals sales to expand markets and margins

17-May-17

The chemical manufacturing unit of Malaysia's state energy firm Petronas is looking to grow "aggressively" in specialty chemicals to meet demand in new regional markets and profit from higher margins, its CEO told Reuters. Petronas Chemicals Group Bhd, a subsidiary of Petroliam Nasional Bhd (Petronas), currently sees only 0.2% of its total sales volumes come from specialty chemicals but the company is aiming for 15% in the next 20 years, CEO Datuk Sazali Hamzah said in an interview. "Our game plan is to aggressively pursue it beyond 2020. We may partner, buy over companies or even do direct licensing," he said. The affordability of specialty chemicals in its key markets Southeast Asia, China and India is increasing as those economies expand, creating new demand opportunities, Sazali said.

Last month, Petronas Chemicals said it plans to set up a plant to produce specialty chemical isononanol in the Pengerang Integrated Complex (PIC) in the southern Malaysian state of Johor with a total investment cost of US$442 mln. Sazali said there could be more specialty chemicals plants in PIC as well. Isononanol is a building block for chemicals used in the auto, cable and construction sectors. The company is spearheading the petrochemicals component of PIC, which is Petronas' largest downstream project in Malaysia with an estimated US$27 bln total investment. Malaysia's Pengerang peninsula lies between the South China Sea and the Malacca Strait, through which almost all Middle East oil and gas bound for North Asia's industrial powerhouses China, Japan and South Korea is shipped.