Thai Union Petrochem delays 40,000 t/y etac project

12 December 2008 09:48  [Source: ICIS news]

SINGAPORE (ICIS news)--Thailand’s Union Petrochemical has put on hold plans for its 40,000 tonne/year ethyl acetate plant due to poor economic conditions but remains hopeful that construction will proceed late next year, the company said on Friday.

“Our project is not going ahead yet, maybe we need to [review] it soon. In the meantime we will try to calculate the project [costs],” said Union Petrochemical’s deputy managing director Perajed Suwannapasri.

“We are in a difficult situation of how the costs of the project will be and if we should start over [the feasibility study] again, but I don’t think it will be long-term stoppage,” he said.

Conducting another viability check on the plant’s set-up could be completed by mid next year, he said.

In addition, Suwannapasri said he is optimistic that plans for an ester plant would be renewed, with construction likely to begin at the end of 2009.

Union Petrochemical had initially planned to start constructing the Thai baht (Bt) 300m ($8.55m) plant early next year after completing a feasibility study in August

The decline in crude oil and raw material prices may serve to bring down the investment cost of building the plant.

“I think the cost of construction has already [dropped by] 25% because of raw material prices were [previously] very high and have dropped now,” Suwannapasri said.

“I believe there will be some decisions made for the project again by next year if we can get good stainless steel and iron prices,” he said.

Thailand’s political uncertainties have been hampering some business decisions, adding pressure on the domestic economy amid the global slump in economic activity, he said.

“We need things to be stable after we get the new prime minister… the political situation should be (re)solved,” Suwannapasri said.

Anti-government groups took to the streets and had seized control of Thailand’s two main international airports in the capital two weeks ago, demanding that Somchai Wongsawat step down as the country’s prime minister.

The eight-day siege only ended when a ruling by the Thai Constitutional Court forced the resignation of Wongsawat and dissolved his People Power Party (PPP).

“Most of the people are expecting things to be worse than this year. I agree on that. The full effect of the crisis [may] come to Thailand next year. The effect now is only in the financial sector so far,” said Suwannapasri.

Ethyl acetate prices may also see some pressure but could stabilize within the first half of 2009, he said.

“(In) this economic crisis, everything is going down very fast and I expect that when [the market] comes up, it will be just as fast,” said Sunwannapasri.

Union Petrochemical is a Thailand-based solvent and chemical importer and distributor for both Thai Mitsubishi Corp and Exxon Mobil Chemical (Thailand) Co Ltd.

($1 = Bt 35.08)

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By: Leon Toh
+65 6780 4359

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