15 January 1996 00:00 [Source: ACN]
NATIONAL Petrochemical Public Company (NPC) of Thailand said it is now in the process of selecting an adviser to conduct a feasibility study in its proposed merger with Thai Olefin Company (TOC). NPC said the selection will be finalised within 90 days.
The proposed merger which is expected to be implemented this year, is to help NPC and TOC reduce their production cost through joint use of management, maintenance, manpower, machinery and equipment.
The plan will also provide management an extra team to launch the NPC-3 project more efficiently.
NPC said the combined capacity resulting from the merger and NPC-3 will make Thailand Asia's biggest olefin producer.
'The planned merger will also help reduce the prices of the feedstock of both upstream and downstream petrochemical producers which will help strengthen Thailand's potential to compete in the world,' said NPC.
It is also part of Thailand's Ministry of Industry's plan to make use of economies of scale and increase the competitiveness of the country's petrochemical industry.
NPC, Thailand's largest producer of olefins, was established in 1984 as a joint venture between the public and the private sectors.
Petroleum Authority of Thailand (PTT), as majority shareholder, holds 37.9% in NPC. The company has just finished debottlenecking operations, bringing up its ethylene capacity to 401 000 tonne/year.
Recently, PTT and NPC created a new jointly owned company, PTT-PC, which will eventually form the basis of an integrated Thai petrochemical industry.
TOC, the country's second olefin producer, is also running its naphtha cracker at maximum ethylene capacity of 350 000 tonne/year. PTT, which holds a 49% stake, is also the largest shareholder of TOC.
With the planned merger, it is unclear whether TOC will still push through with its listing plans this year. TOC officials were unavailable for comment.
A PTT official told ACN that the proposed merger of the two companies has been in discussion since last year 'as the business of the two companies is quite similar'.
He said should the merger push through, 'PTT is still likely to maintain its majority stake in the merged company.'
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