Water crisis leads SCC petrochemical plants to cut output

23-Jun-05

Concerns about the impact of the water crisis has prompted Siam Cement Plc (SCC), Thailand's biggest industrial conglomerate to curb its production by about 40% by the end of this month in its drought-hit eastern region. The cut was prompted as water consumption needed to be reduced at the Mab Ta Phut industrial estate, where SCC's main olefins plant is located alongside other petrochemical plants and oil refineries. Anticipations are being held that others may follow suit until the rain showers favourably. About 60 plants operate at Mab Ta Phut, including Aromatics (Thailand), Thai Plastics and Chemicals and Vinythai Plc. Refineries there include PTT's Rayong Refinery and Star Petroleum Refining. Power firms include Electricity Generating and Glow Energy. Though enough water for the production is regarded to be available for the next two months, considering the government's launch of the artificial rain-making efforts and the Eastern Water Resources Development and Management's supply of water to its clients until September, industrial plants on the eastern seaboard are on their way to cut output. This is probably because they may not be able to operate at full capacity due to the shortage of water. SCC's petrochemical business Rayong Olefins, with an annual capacity of about 800,000 tons of ethylene and 400,000 tons of propylene, as well as Thai Olefins (TOC) and National Petrochemical (NPC) operating 3 ethylene plants with capacity of almost 1.145 million tpa are expected to deepen cuts in production to about 40% from probably next week if the situation does not seem to improve.