The Siam Cement Public Company Limited (SET: SCC) has announced to the Stock Exchange of Thailand that Long Son Petrochemicals Company Limited (or LSP), a wholly owned subsidiary in Vietnam of SCG Chemicals Public Company Limited (or SCGC), which is a wholly owned subsidiary of SCC, is moving ahead with the Ethane enhancement project, with a budget at the 700 million USD (approximately 23,000 million Baht).
LSP is currently working with Vietnam authorities to acquire necessary certificates and permits. Funding of this project will preliminarily come from SCC’s internal sources. The project is expected to be completed by the end of 2027.
By utilizing imported Ethane from the United States of America as a raw material, LSP can significantly enhance its competitiveness through lower feedstock cost and flexibility, while also lowering carbon emissions.
LSP’s olefins process is designed for gas feedstock flexibility. As such, the majority of the investment for the project will go toward handling and storage of the Ethane feedstock, which requires a temperature as low as -90 degree Celsius. Once completed, LSP will be able to utilize Ethane as much as two thirds of the total feedstock, in addition to Propane and Naphtha.
LSP was completed at a 5.2 billion USD (approximately 170,000 million Baht) investment and began its commercial start-up (COD) on September 30, 2024, following its comprehensive test period earlier. In light of the existing petrochemical trough with historical low margin, and current volatile global economic environment, LSP is closely monitoring the market situation and will adjust the run rate of its operation during this challenging period for petrochemical business.
The size of this investment is 2.42% of the total assets in SCC in consolidated financial statements as of June 30, 2024, and when combined with other assets acquisition transactions in the past six months prior to the date of this transaction, the total size is 4.25%. Thus, the disclosure of this transaction is not required pursuant to disclosure rule for the acquisition and disposition of assets. This transaction is not a connected transaction.
