PTT Global’s latest buy and Siam Cement’s Indonesia plan

Business, Company Strategy, Europe, Indonesia, M&A, Olefins, Projects, Thailand, US

By Malini Hariharan

There have been no headline-grabbing deals but bit by bit PTT Global Chemical is extending its business beyond Asia and entering new product areas.

Yesterday, PTT Global announced plans for a joint venture with Perstorp Holding France in toluene diisocyanate (TDI), aliphatic isocynates such as hexamethylene diisocyanate (HDI) and derivatives.

PTT Global will have a 51% share in the joint venture, which includes Perstorp’s coating additives group with manufacturing sites at Pont-de-Claix in France and Freeport in the US

The transaction, subject to approval, will also give PTT Global access to technology and is part of a strategic move into the ‘high volume specialty downstream business’.

The joint venture is likely to invest in new plants as well boost R&D spend to improve operations efficiency to strengthen the competitive position.

It has been a busy year for PTT Global, formed after the merger of PTT Chem and PTT Aromatics.

PTT Global successfully bought a 50% stake in US-based polylactic acid maker NatureWorks from Cargill for $150m. It also invested $60m US-based Myriant Corp which makes bio-based chemicals.

But it lost out to Siam Cement for a stake in Chandra Asri, Indonesia’s sole cracker operator.

Meanwhile, Siam Cement and Barito Pacific, the joint owners of Chandra Asri, are planning a public offering on the Indonesian stock market to raise funds for a cracker expansion. A borrowing from the banks is also being considered for the project which will raise ethylene capacity to 800,000-1m tonnes/year from the current 550,000 tonnes/year.

A final decision on the project is due next year.

“Only 5% of CAP’s shares have been floated in the Indonesia stock market. We’re thinking of increasing that to 20%,” said Cholanat Yanaranop, president of SCG Chemicals to a Thai newspaper.

And SCG is still waiting for a decision on its bid to acquire Indonesian vinyls producer Sulfindo Adiusaha.

Its cracker project in Vietnam is still alive with the government offering fresh incentives. The $4.2-billion project has been given a 30-year tax exemption on propane, butane, naphtha, industrial salt and coal, as well as a 3% tax rate products such as polypropylene (PP) and polyethylene (PE) for 10 years.

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