Thailand's PTT Global Chemical (PTTGC) and Siam Cement Group Chemicals (SCGC) have finalised the proposed joint venture (JV) for their olefins and polyolefins operations and expect to obtain regulatory approvals by the second half of 2027.
PTTGC and SCGC will hold 56pc and 44pc stakes, respectively, in the JV company following the completion of the merger, according to a filing with the Stock Exchange of Thailand on 28 October.
The strategic JV aims to "bring together PTTGC's strengths in upstream production, access to competitive feedstock with refinery integration and integrated infrastructure with SCGC's downstream manufacturing capabilities, diversified product portfolio, proprietary technology and expertise in high-value-added and differentiated products," the statement said.
PTTGC operates five crackers at the Map Ta Phut and Rayong industrial zones, with combined ethylene capacity of 2.88mn t/yr. Its downstream assets include 850,000 t/yr of high-density polyethylene (HDPE) capacity, a 300,000 t/yr low-density polyethylene (LDPE) plant and two 400,000 t/yr linear low-density polyethylene/high-density polyethylene (LLDPE/HDPE) swing units.
The company is also a major shareholder of HMC Polymers and supplies propylene through local pipeline transfers.
Meanwhile, SCGC operates two crackers in the same industrial zones, with total ethylene capacity of 2.1mn t/yr. Its affiliated polyolefins companies include Thai Polyethylene and Siam Polyethylene.
Thai Polyethylene operates 980,000 t/yr of HDPE capacity, a 152,000 t/yr LDPE unit, a 140,000 t/yr LLDPE/HDPE swing line and three PP lines totalling 890,000 t/yr. Siam Polyethylene owns two LLDPE plants with combined capacity of 650,000 t/yr.
The firms first announced in late April that they were studying a potential partnership. Both companies will continue to operate independently until the JV obtains regulatory approvals, according to a 29 October statement to customers from PTTGC and SCGC.
The JV comes southeast Asian petrochemical market participants turning to rationalisation and restructuring to manage the persistent production losses in the petrochemical sector over the past few years.
In recent developments, Thailand has imposed a three-year safeguard measure on selected PP imports into Thailand as a move to protect its domestic industry. The safeguard duties ranging from 7.63-7.73pc will be phased in over a three-year period, effective from 28 December this year.
