PTT establishes subsidiary to handle marketing and distribution

06-Oct-05

PTT Plc has established a subsidiary- PTT Polymer Marketing Co. to handle marketing and distribution of almost 500,000 tpa of polymer products. PTT Polymer Marketing Co will distribute high density polyethylene (HDPE) manufactured by Bangkok Polyethylene Plc (BPE) and National Petrochemical Plc (NPC), two subsidiaries of the PTT Group. PTT holds half the shares in PTT PM while BPE and NPC each hold 25%. With this new development, PTT, BPE and NPC will have common production, marketing and sales projections, and will also give PTT the advantage of credibility with international clients who prefer dealing with a single large supplier. PTT PM's annual revenue is forecast to reach 40-60 billion baht in the next three years, based on PTT's decision to invest with NPC in capacity increase to 700,000 tons of low density polyethylene (LDPE) in 2008, as well as BPE's capacity expansion. Overall production capacity of polyethylene products by the PTT Group is projected to reach 1.6 million tons in 2008 compared with the current 500,000 tons. Current production capacity of polymers in Thailand is 1.1 million tpa. Siam Cement Group and Thai Petrochemical Industry Plc are PTT's main competitors in the domestic market. However, the competitive picture will change once PTT finalises its planned investment in TPI as part of the latter's debt-restructuring plan.