PetChem allocates RM4.3 billion capex for Pengerang’s petrochemical project

KUALA LUMPUR: Petronas Chemicals Group Bhd (PetChem) is allocating RM4.3 billion in capital expenditure (capex) over the next two years for the completion of its petrochemical project in the Pengerang Integrated Complex.

Chairman Datuk Md Arif Mahmood said the project, which was 74 per cent completed as at March, would be operationalised next year.

“The group is also allocating an additional RM600 million capex for the financial year ending Dec 31, 2018, which is the amount that we spend annually,” he told a press conference after the company’s annual general meeting yesterday.

Group managing director/ chief executive officer Datuk Sazali Hamzah said the RM600 million capex would be used for plant maintenance and turnaround activities this year.

“Five plant turnaround activities will commence this year. We have just completed one yesterday,” he said.

On the company’s growth outlook, Md Arif expected that 2018 would be a positive year for the company, on the back of firmer crude oil prices, improving global economy and increasing consumer demand.

“However, we have to ensure that we can sustain our plant utilisation rate of 91 per cent that we recorded last year, and maintain our petrochemicals production volume of 10.1 million tonnes that we achieved last year,” he said.

Md Arif also hoped to maintain the sales volume at around 8.1 million tonnes recorded last year, mainly due to contributions from its Sabah Ammonia Urea (SAMUR) project which began its commercial operation in May 2017.

However, he noted that the company had to take into account statutory turnarounds this year.

Md Arif said Petchem also planned to expand its specialty chemicals portfolio in the next 20 years.

“We hope to increase the revenue contribution from specialty chemicals segment to 15 per cent in the next 20 years from the current five per cent,” he added.

In a presentation earlier, Sazali said last year, the company recorded its best ever performance in terms of revenue, profit after tax (PAT), as well as earnings before interest, taxes, depreciation and amortisation ( EBITDA) since its listing in 2010.

Its revenue rose 26 per cent year-on-year (y-o-y) to RM17.4 billion from RM13.7 billion in 2016, PAT grew 37 per cent y-oy to RM4.4 billion from RM3.2 billion and EBITDA was 25 per cent higher y-o-y at RM6.6 billion against RM5.3 billion previously. — Bernama