PTT Global Chemical Plc (PTTGC), Thailand's largest producer of petrochemicals, says it plans to ask its business partners within the group to invest in the Eastern Economic Corridor (EEC), which spans Chon Buri, Rayong and Chachoengsao provinces.
"We've been assigned by the government to act as a spearhead in seeking prospective companies to invest in the much-touted EEC project, especially in the high-value and biopetrochemical fields," said president and chief executive Supattanapong Punmeechaow.
PTTGC has different types of strategic partners across its subsidiaries such as Asahi Chemical, Sunyo Corporation, Mitsubishi Chemical Crop, Kuraray and Toyota Tsusho, an advanced petrochemical firm.
Mr Supattanapong said Global Green Chemical Plc was the group's first subsidiary to invest in the EEC project with the construction of a second production facility for methyl ester in Rayong last month.
PTTGC alone plans to allocate 150 billion baht in capital expenditure for five years (2017-21).
Most of the budget is slated to be spent on constructing new facilities and expanding its production capacity of propylene oxide, polyols, naphtha cracker and other downstream petrochemical products.
"We can improve the value of our polymer products to tap into automotive, medical, and building materials," said Mr Supattanapong.
He also said PTTGC expects to reduce its production and operating costs by 3.2 billion baht this year, thanks to an effective cost reduction programme, which was implemented late last year.
PTTGC saw its net profit increase by 246 million baht in the fourth quarter of 2016, while net profit in the first quarter of 2017 surged by 652 million.
"We expect our cost reduction programme to trim 3.2 billion baht in 2017, 6 billion in 2018 and 9 billion in 2019," said Mr Supattanapong.
PTTGC reported a record-high net profit in the first quarter of 2017 -- 13.2 billion baht -- growing 35% year-on-year.
Its sales revenue rose by 33% to 107 billion baht.
He said PTTGC plans to tap into the high-growth plastic products area in Cambodia, Laos, Myanmar and Vietnam.
"We aim to triple export sales volume to 125,000 tonnes this year, up from 40,000 tonnes at the end of March."
Duangkamol Settanung, executive vice-president for finance and accounting at PTTGC, said even though global oil prices have rebounded to above US$50 per barrel on average, its average gross refinery margin this year has only slightly improved to $6.30 per barrel, up from $5.30 in 2016.
"Despite having fallen right into our comfort zone with higher margins in the petrochemical business, we have to push ahead with cost efficient measures in order to avert the possibility of petrochemical price fluctuations," said Ms Duangkamol.
PTT and its affiliates including PTTGC, PTT Exploration and Production Plc and Thai Oil (but excluding IRPC and Global Power Synergy Plc) reported strong net profits gains in the first quarter this year, driven by higher global oil and petrochemical prices.
PTT Plc alone reported a 95% year-on-year jump in net profit to 46.2 billion baht for the first quarter of this year. Sales revenue rose 31.9% year-on-year to 51- billion baht, mainly from international trading and petrochemicals and refining.
PTTGC shares closed yesterday on the Stock Exchange of Thailand at 73.75 baht, up one baht, in trade worth 797 million baht.