Thailand Petrochemicals Report Q4 2009

Thailand Petrochemicals Report Q4 2009

Thai petrochemicals production is set to fall by 15-20% in 2009, but will make a quick recovery in 2010
when new capacity comes onstream, according to BMI’s latest Thailand Petrochemicals Report.
A number of new projects are nearing completion. PTT Chemical (PTTCH) is leading expansion efforts,
with PTT Polyethylene (PTTPE) – a joint venture (JV) between PTT Chemical and PTT Plc – awarding
a construction contract to Toyo Engineering Corp in mid-2006 to build a US$1.7bn ethane cracker
situated in Mab Ta Phut with a capacity of 1mn tpa. Construction on the cracker and an integrated PE unit
started in May 2007 and is slated for completion in 2010. The cracker will feed a 350,000tpa linear low
density polyethylene (LLDPE) plant and a 300,000 tonnes per annum (tpa) low density polyethylene
(LDPE) plant, as well as the production of ethylene vinyl acetate copolymer.
However, the economic downturn is having an impact on some projects that have yet to be started. IRPC
has announced that due to the economic slowdown it was delaying the expansion of its refinery from
215,000tpa to 258,000tpa as well as an expansion of its acrylonitrile butadiene styrene (ABS) unit from
117,000tpa to 200,000tpa. The US$158mn project was due to be completed by 2011 and would meet an
expected rise in demand from the automotive and electrical appliance industries. IRPC did not specify for
how long the expansion had been delayed.
Based on capacity utilisation trends in H109 and a forecast 10.1% drop in overall manufacturing output,
BMI forecasts a 15-20% year-on-year (y-o-y) decline in petrochemicals consumption and production
volumes for olefins and polyolefins in 2009, despite the petrochemicals industry being one of the main
beneficiaries of the government’s injection of THB1.52trn (US$44bn) three-year investment programme
in infrastructural developments. However, with the worst of the recession likely to have been passed in
Q209, the industry could see an upturn as early as Q409. The situation is not helped by the appreciation of
the baht, which is harming exports of petrochemicals and manufactured goods with a high level of
petrochemicals use; BMI forecasts a 15% drop in total exports in 2009, while the Ministry of Commerce
predicts a decline in the region of 15-19%. BMI believes that any stabilisation in the petrochemicals
industry will first be felt in sectors such as PVC and products with industrial applications.
Mab Ta Phut will remain the focus of petrochemicals developments. PTTCH is expected to start up its
new 1m tpa ethane cracker in September. Its new 400,000tpa LLDPE is due to start trial production in
August-September 2009 and its new 300,000tpa LDPE plant will come on stream in February-March
2010. The growth in cracker capacity will help supply feedstock to downstream plants, although planned
capacity expansion will also be delayed. Compared to 2008 levels, ethylene capacity in 2013 will be up
75% to 4.23mn tpa with an 80% increase in PE capacity to 3.96mn tpa and a 52% increase in PP to
2.05mn tpa.

Executive Summary ....5
SWOT Analysis.6
Thailand Petrochemicals Industry SWOT... 6
Thailand Political SWOT...... 7
Thailand Economic SWOT.... 8
Thailand Business Environment SWOT ...... 8
Global Market Overview.........9
Global Ethylene Capacities .. 9
Table: World Ethylene Production By Country, 2008 And 2013 (‘000 tonnes capacity) .......... 9
Polypropylene.......... 12
Global Oil Products Market Review......... 15
Table Global Oil Prices, 2003-2013 (US$ per barrel).... 19
Emerging Asia Petrochemicals Overview 20
Table: Asian Ethylene Projects...... 22
Thailand Market Overview...23
Table: Thailand’s Petrochemicals Sector – Cracker Data, 2006-2012 (‘000tpa)........ 23
Market Evolution ..... 24
Petrochemicals Business Environment....26
Table: Asia Pacific Petrochemicals Business Environment Ratings ...... 26
Limits Of Potential Returns. 26
Risks To Realisation Of Returns .... 27
Industry Trends And Developments .........28
Table: Thailand’s Petrochemical Projects 28
Olefins .......... 29
Table: Thailand’s Petrochemicals Sector – Ethylene Capacity (tpa)..... 29
Aromatics...... 30
Table: Thailand’s Petrochemicals Sector – Aromatics Capacity (tpa) .. 30
Polymers....... 31
Table: Thailand’s Petrochemicals Sector – Polyethylene Capacity (tpa) ......... 31
Table: Thailand’s Petrochemicals Sector – Polypropylene Capacity (tpa)....... 32
Table: Thailand’s Petrochemicals Sector – Polyvinyl Chloride Capacity (tpa) 32
Table: Thailand Petrochemicals Sector – Polystyrene Capacity 32
Financial Results ..... 34
Industry Forecast Scenario ..36
Table: Thailand’s Petrochemical Industry, 2006-2013... 38
Macroeconomic Outlook..... 39
Table: Thailand – Economic Activity, 2006-2013 41
Company Monitor......42
PTT Public Company Ltd.... 42
PTT Chemical (PTTC)........ 46
Siam Cement/Cementhai Chemicals Company (CCC).... 48
Shell ... 50
Indorama Polymers Public Company Limited (IRPC PCL)....... 51
PTT Aromatics and Refining (PTTAR)...... 53
Country Snapshot: Thailand Demographic Data 54
Section 1: Population.......... 54
Table: Demographic Indicators, 2005-2030........ 54
Table: Rural/Urban Breakdown, 2005-2030 ....... 55
Section 2: Education And Healthcare....... 55
Table: Education, 2002-2005 ........ 55
Table: Vital Statistics, 2005-2030.. 55
Section 3: Labour Market And Spending Power .. 56
Table: Employment Indicators, 2001-2006.......... 56
Table: Consumer Expenditure, 2000-2012 (US$) 56
Table: Average Annual Non-Agricultural Wages, 2001-2012.... 57
BMI Methodology ......58
How We Generate Our Industry Forecasts .......... 58
Chemicals And Petrochemicals Industry .. 58
Cross Checks 59
Business Environment Ratings....... 60
Table: Petrochemicals Business Environment Indicators And Rationale.......... 60
Weighting...... 61
Table: Weighting Of Indicators ..... 61