11:54 (GMT +7) - Wednesday 15/08/2018

Business

SCG keen to acquire Long Son project

Released at: 18:19, 28/01/2018

SCG keen to acquire Long Son project

Photo from cafef.vn

Thai Group asks government to allow it to increase its current 71% holding in long-stalled petroleum complex project.

by My Van

The Siam Cement Group (SCG), Thailand’s largest cement maker, may become the only investor in the $5.4-billion Long Son Petroleum Complex.

It sent a request to the government on acquiring the entire project to accelerate progress, which had been delayed for some time. SCG currently holds 71 per cent of the complex and PetroVietnam the remainder.

SCG CEO Mr. Roongrote Rangsiyopash said the company is negotiating with the government on investment and construction details.

Mr. Chaovalit Ekabut, SCG’s Chief Financial Officer, said the project could be delayed for six more months. It is scheduled to begin operations in the first half of 2022, and construction could begin in the first half of this year.

Since 2008, when the project was approved, many investors have been involved but not actually invested. Vietnam’s largest petrochemical complex has stagnated for many years, and was originally slated to come online last year.

Qatar’s State-owned Qatar Petroleum acquired a 25 per cent stake in the project in 2012. It withdrew in 2015, however, because of falling oil prices affecting the company’s operations. SCG, which already held a 46 per cent stake, decided to purchase Qatar Petroleum’s holding after finding a new partner.

The project plays an important role in the growth of SCG. “We can clearly see that with the Long Son project, our petrochemicals sector will expand and our business in Vietnam will also grow stronger,” Mr. Rangsiyopash said.

In order to diversify production activities, SCG is seeking opportunities to expand to other countries in the region, building factories in Cambodia, Indonesia, Laos, and Myanmar.

It has bolstered its investment in packaging production, buying a 68.3 per cent stake in Malaysia’s Interpress Printers Sendirian Berhad for $26.5 million earlier this week.

SCG’s net income in the second quarter of 2017 fell 2 per cent to $1.73 billion, with revenue rising 6 per cent, revealing the serious competition found in the cement and building materials sectors.

Cement and other construction materials accounted for 39 per cent of total group sales, with petrochemicals accounting for 46 per cent. Revenues from Southeast Asia, excluding Thailand, increased 9 per cent, accounting for 24 per cent of total sales.

SCG is the largest and oldest cement and building materials company in Thailand and Southeast Asia.

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