PetChem records resilient performance last year
KUALA LUMPUR: Petronas Chemicals Group Bhd (PetChem) has recorded a resilient performance in 2020 and is poised for sustainable growth going forward.
The chemicals group yesterday held its 23rd annual general meeting (AGM) virtually to present the company’s performance to its shareholders for the financial year ended December 31, 2020.
The AGM was chaired by chairman Datuk Md Arif Mahmood, who is also Petronas’ executive vice president and chief executive officer (CEO) Downstream.
Also, in attendance were all the Board members, PetChem managing director/CEO Datuk Sazali Hamzah and chief financial officer, Mohd Azli Ishak.
During the virtual AGM, Datuk Sazali shared the company’s performance, growth plans, sustainability strategy and outlook for 2021.
2020 was an extremely challenging year. The Covid-19 pandemic severely impacted global economy amid unresolved US-China trade war, compounded by the Organization of the Petroleum Exporting Countries and allies (OPEC+) fallout which led to the collapse of crude oil price.
Despite these challenges, the group remained focused on plant operations and safety, sustaining best-in-class plant utilisation rate at 94 per cent, well above the world-class standard of 90 per cent and maintained an excellent safety record.
The group achieved a record-breaking production volume of 10.7 million tonne per annum (tpa) and attained world-class level of order fulfillment reliability at 97 per cent, clearly demonstrating PetChem’s agility and resilience.
“Our achievement reflects our ability to capitalise on our strengths,” Sazali said.
“We have long-established strong fundamentals, capable of withstanding many challenges. With leading technologies, integrated facilities, logistical advantages, diverse portfolio, regional footprint and close customer relationship, we remained resilient.
Our achievement reflects our ability to capitalise on our strengths. Datuk Sazali
“As a result, PetChem closed 2020 with a profit after tax of RM1.6 billion. In line with the group’s dividend policy, for FY20, we declared a total dividend of 12sen or RM960 million, translating into a dividend payout ratio of 59 per cent of profit after tax and non-controlling interests (PATANCI).”
“We are focused on pursuing our two-pronged strategy, namely, to sustain our strength in basic petrochemicals and diversify into derivatives, specialty chemicals and solutions.”
The growth in specialty chemicals via Da Vinci Group (DVG) is progressing as planned. DVG, which PetChem acquired in 2019, is expanding its capacity with the construction of a silicone blending plant in Gebeng, Pahang and a new facility for lubricant additives and chemicals in Echt, Netherlands.
Upon completion of these facilities, PetChem will have wider access to highgrowth end markets such as personal care, automotive and healthcare.
PetChem’s growth journey is further accelerated with the formation of a joint-venture partnership with PT AKR to distribute chemicals across Indonesia. This partnership provides greater market access in Indonesia and enables PetChem to serve its customers more effectively.
“Our Pengerang Integrated Complex (PIC) provides another platform to strengthen our position in both basic and specialty chemicals. We are gearing for full start-up in the second half of 2021.
“With PIC, we expect to increase our production capacity from 12.8 million up to 14.6 million tonne per annum.”
Commenting on PetChem’s sustainability strategy, Sazali said that they see sustainability as a licence to operate.
“We focus on the 3Ps; People, Planet and Profit. On People, we will continue to invest in staff and community well-being.
“On Planet, our business will uphold environmental stewardship and resource efficiency and finally on Profit, we will ensure our business is sustained and continue to grow.
“Our growth will also include green initiatives such as investment in the world’s first bio-Mono Ethylene Glycol (MEG) pilot plant via direct conversion from palm biomass utilising in-house technology.”
“2020 closed with the positive development of the Covid-19 vaccine, along with indications of an economic recovery.
“Specifically, for the oil and chemicals industries, prices have shown improvements towards the end of 2020.
“As of now, market has started to recover, although its stability remains uncertain. While we are optimistic of the future, we remain cautious of potential disruptions.
“We will carry on with our operational and commercial excellence, cost optimisation efforts and pursue growth opportunities in 2021.
“We are confident that we will be able to navigate a post-pandemic world with stronger fundamentals, hence creating more value for all our stakeholders.”