InterviewThailand's IRPC pursues growth plan despite merger delay

30 June 2010 12:46  [Source: ICIS news]

By Pearl Bantillo

SINGAPORE (ICIS news)--Thailand's Integrated Refinery & Petrochemicals Complex (IRPC) is proceeding with its own expansion plans as a proposed merger with its sister company under the PTT umbrella has stalled due to legal and technical issues, its top company executive said on Wednesday.

"It [the delay] is not really affecting our plan. Both companies have their own plans and since this is a friendly merger we are still following our respective plans," IRPC CEO Pailin Chuchottaworn told ICIS in an interview.

IRPC, which is 38% owned by southeast Asian energy and petrochemicals major PTT, was due to be merged with another PTT affiliate - PTT Aromatics - by the fourth quarter of this year, but the timetable was pushed back to early next year.

"We have our own grand scheme under the name Phoenix, which consists of 19 projects. Quite a few of the initiatives have been approved and sanctioned by the board, and the investment has been going on according to schedule," said Pailin.

IRPC has a four-year budget of $1.4bn for the projects, which includes expansion of its acrylonitrile, butadiene and styrene (ABS), propylene and lube base oil capacities, he said.

The company was currently in the process of bidding out the contractors for the ABS and propylene project. Construction works could begin this year, he said.

IRPC has petrochemical operations within Rayong province, but outside the controversial Mab Ta Phut site so it escaped the legal environmental problems hounding PTT and its other affliates.

Meanwhile, the company was pursuing the development of two green industrial estates in the province and should be able to sell land in the 7,000-rai (11.2m square meters) estates in six months' time, said Pailin, citing that inquiries from Japanese investors had started coming in.

Pailin said IRPC was looking at a "reasonable" performance in the second quarter after a strong financial showing in the first quarter, when net profit surged 49% year on year to Baht (Bt) 2.42bn, with sales doubling to Bt55.25bn.

"This year could still be a good year for us, like last year," he said.

The April-to-June performance may not come in as strongly as in the March quarter, largely due to a big decline in oil prices in May, Pailin said, adding that the volatility of oil prices could still mar the bright demand prospects for petrochemicals for the rest of the year.

"I think this [volatile oil prices] is going to be a big challenge for us. On the demand side, I think it's going to be okay," he said.

($1 = Bt32.39)

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By: Pearl Bantillo
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