PTTGC enhances investments under its strategic plan to add value from joint ventures project in response to Thai government policies

Stocks and Financial Services Press Releases Tuesday February 27, 2018 14:58
Bangkok--27 Feb--PTT Global Chemical Public Company Limited
Ready to spearhead support for PTT Group's mainline petrochemical business

PTT Global Chemical Public Company Limited (PTTGC), Thailand's largest integrated petrochemical and refining business, recently announced a positive contribution to its 2017 results by three subsidiaries it acquired last year to expand its petrochemical business: HMC Polymers Co., Ltd. (HMC); PTT Asahi Co., Ltd. (PTTAC); and PTTMCC Biochem Co., Ltd. (PTTMCC). The shares of these three companies were transferred to PTTGC from PTT PLC, which supports both PTTGC's vision and its shareholders. This approach coincides with PTTGC's greater emphasis on strategic planning while building a common platform to maximize synergies to drive increased growth through integration and sustainability. The three companies that were acquired last year all achieved impressive revenue performance in 2017.

Mr. Supattanapong Punmeechaow, President and Chief Executive Officer of PTT Global Chemical Public Company Limited, said that the priority following PTTGC's acquisition and joint administration of the three companies transferred from PTT PLC, which was completed on July 3, 2017, was to build a relationship of mutual trust and confidence with shareholders of HMC, PTTAC, and PTTMCC. As a new shareholder, PTTGC aimed for a common strategy to enhance business value.

PTTGC is assessing its plans to create further synergies in 2018, including an investment in the acrylonitrile butadiene styrene (ABS) sector. Acrylonitrile is a high-performance plastic and a key raw material used in electrical appliances and in the automotive industry. PTTAC is the sole manufacturer of acrylonitrile in Southeast Asia. PTTGC manufactures butadiene, another key raw material, in addition to ethylene and benzene, which are key raw materials in styrene monomer (SM) production. A project is currently in the study phase for the construction of an SM manufacturing plant to fill gaps in PTTGC's polystyrene (PS) business value chain and support expansion in the ABS sector, which will add to the company's integration, value, and competencies. The study's conclusions will be announced in the near future.

For HMC Polymers Co., Ltd., a leading company in the polypropylene (PP) sector, plans include increasing its sales capacity and expanding accessibility for PTTGC's customers, particularly in target markets including the highly-promising Cambodia, Laos, Myanmar, and Vietnam (CLMV) markets, as well as Indonesia. The company also plans to promote PP as a key raw material to enhance its High Value Products (HVP) business.

PTTMCC, which produces polybutylene succinate (PBS), is considered a newcomer that requires some time to discover potential markets and develop suitable products. Mitsubishi Chemical Corporation (MCC) and PTTGC, the key shareholders in PTTMCC, provide sales and marketing support targeting the United States and Europe, which have standard environmental requirements. The two PTTMCC shareholders also support product development, such as the experimental polylactic acid (PLA) project from NatureWorks to develop PBS blends that enhance flexibility and thermal resistance, and testing the performance properties of marine-degradable plastics. PTTGC is highly confident that PTTMCC will increase both its sales and its number of strategic customers as planned.

"In 2017, these three companies delivered an impressive set of financial results that exceeded our appraisal conducted prior to the acquisition. This was due to higher product prices, the seamless integration of operations that delivered production efficiencies as planned, and improved coordination between PTTGC and the shareholders of these three companies," concluded Mr. Supattanapong.


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