Year 2010

 February

Stalled projects may derail PTTCH's growth target

Firm sets aside B14bn to expand abroad

By YUTHANA PRAIWAN

PTT Chemicals, the country's largest olefins producer, is unlikely to hit its revenue growth target of 20% this year because of the impact of the Map Ta Phut dispute, says president and CEO Veerasak Kositpaisal.

PTTCH, also the country's largest petrochemicals manufacturer in terms of capital value, at the end of last year set a 2010 revenue target of about 100 billion baht, up from 80 billion in 2009.

But lower-than-expected feedstocks, due to the suspension of its parent company's new gas-separation plant, will make such strong growth hard to achieve, said Mr Veerasak.

The company had planned to expand olefins production this year to 2.8 million tonnes from 1.8 million at the end of last year.

"However, we can only make 2 million tonnes at most despite the fact that our new cracker that will be ready to produce far more than that," he said.

"This is because PTT's sixth gas separation plant was ordered to stop its test-run by the Central Administrative Court."

Last September, the Central Administrative Court issued an injunction ordering 76 industrial projects in Rayong's Map Ta Phut area to cease operations for not meeting public health and environmental impact requirements set out in Section 67 of the 2007 Constitution. Sixty-four projects, worth a combined 300 billion baht, remain suspended, 18 of them belonging to the PTT group.

While the court did not order PTTCH's olefins cracker to halt operations, eight downstream production plants were told to cease activity.

PTT, the country's sole supplier of liquefied petroleum gas, would have supplied a wide range of petrochemical products to the group as part of its integrated development plan. But the court order means neither its upstream nor downstream olefins plants can operate.

PTTCH's olefins cracker was finished in December and was to run tests this month. The gas-separation plant was also due to run trials this month and start operating in March.

PTTCH has already paid its contractors and operations at two of the downstream plants should have started at the end of last year. Another plant is due to come online by midyear, but the court order has delayed all of the plans.

The delays will lead to high olefins prices in Asia due to the increased scarcity of supply, said Mr Veerasak.

PTTCH shares closed yesterday on the Stock Exchange of Thailand at 75.50 baht, 1.50, in trade worth 132.86 million.

By Bangkok Post

February 16, 2010

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