Despite a downtrend of petrochemical due to an oversupply, slower demand and high interest rates in 2023, PTT Global Chemical Public Company Limited (SET: PTTGC) managed to book a billion baht of profit in 2023, marking a turnaround from a net loss a year prior due to the efficiency of its cost control, while eyeing gradual recovery in sales volume in 2024 as economy recovers.
In a press conference, Mr. Kongkrapan Intarajang, Chief Executive Officer of PTTGC, expected to see a better performance in 2024, following a positive trend in 2023 that the company was able to lower the overall costs by almost 10 billion baht, while the recovering trend is growing despite challenges from the global economy.
On the concerns over Allnex performance in the past year, the CEO noted that margin remained stable, but sales were weak due to slow demand, especially in Europe. However, he expected to see some recovery with a strong performance in Allnex China Hub that had been able to cut costs from combining all branches in China to only one main hub in Zhejiang. The volume is expected to return within a year or two, according to Mr. Kongkrapan.
Moving forward, the company laid out three steps to take on the global challenges and provide its business operations with resilience under the “High Value, Low Carbon Business,” ideal.
The first step is “Step Change” to improve performance and lower costs with strong partnerships. This step has been proven to be effective after the company partnered with WHA Corporation Public Company Limited (SET: WHA) to boost its logistics business. The company expects to build Thailand as the Southeast Asia hub for Allnex.
The second step is “Step Out” to look for more opportunities in a non-core business, while also looking for new partners. The company plans to expand its plastic segment to bio and circularity.
The last step is “Step Up” to create sustainable business as the company plans to cut carbon emission by 20% in 2030 and achieve Net Zero by 2050.
In 2024, Mr. Kongkrapan also expected to see an improvement in the polyethylene market, while its intermediate business performance should slightly improve following the global economy. Meanwhile, there are no plans for major maintenance this year, which should give its plant a full run-rate.
As market conditions improve, the CEO expected to see 7-10% growth in sales volume this year along with a recovery in petrochemical margin, which should be visible in 2Q-3Q24.
The company has a flexible investment budget for 2024 as it will shift according to the overall economic situations. Primarily, PTTGC sees about $100-150 million in CAPEX this year.
Lastly, from the present day until the middle of 2024, the company noted that it is looking for more bond buyback in dollar terms, which is one of the key strategies that yielded profit for the company last year due to higher interest rates.
At the end of the conference, the CEO also promoted the “Gen S” campaign for sustainability, saying that the generation to build a better world does not limit to only young people, but everyone can be a Gen S to make the world a better living place.
