PTT Group plans further consolidation of downstream petrochemical businesses

30-Mar-11

PTT Group will further consolidate its downstream petrochemical businesses later this year after completing the merger of its upstream units. The merger of PTT Aromatics and Refining and PTT Chemical should be finalized just before September, creating a new upstream petrochemicals unit. Later, PTT Group will go ahead with consolidation of its downstream businesses, namely the merger of HMC Polymers and PTT Phenol. HMC Polymers, which produces polypropylene, is 41.44% cent owned by PTT. PTT Phenol, which is 40% owned by the company, produces and distributes phenol and acetone. A new company will be set up as part of the consolidation process so that PTT Group can further boost its efficiency and competitiveness in the downstream sector. PTT's downstream units have combined annual sales of Bt1.3 trillion, accounting for 13% of the country's gross domestic product and creating jobs for more than 1.3 mln people. Pratya Pinyawat, chief operating officer of the downstream business, said mergers would increase economies of scale and help lower costs. PTT Group aims to further expand its downstream businesses in order to be a key regional player, and not just a local operator, he said. Sukrit Surabotsopon, another top executive of PTT Group, said the firm is conducting a feasibility study into investment in a joint venture with Mitsubishi Chemical, which hold patents on bioplastics production knowhow. Ownership of the joint venture would be split equally between Mitsubishi and PTT, with the factory being set up on a 1,500rai site at an industrial estate in Map Ta Phut, in Rayong province. Other biobased production plants would be set up within the same downstream industrial complex, said Sukrit.Biobased products are regarded as more friendly to the environment. The group's top executives yesterday attended the opening of "PTT Group Downstream Expo 2011", which runs until Friday and highlights the concept of "Power of Infinite Synergy". In addition, PTT is unveiling "Group Integrated Supply Chain Management & Optimisation (GISMO)", which aims to highlight the linkage of its various business strategies. The group has adopted six strategies, covering oil and petrochemical supplychain management, logistics optimisation, a group logistics master plan, and Indochina and group trading.