PetChem monitors impact of US-China trade war
KUALA LUMPUR: Petronas Chemicals Group Bhd is currently monitoring the impact of the escalating trade war between the United States and China on the petrochemical industry.
Managing director/ chief executive officer Datuk Sazali Hamzah pointed out that there is no serious threat to the industry at the moment.
“Our business is still as usual. But we are closely monitoring the situation, the trade war between China and the US. In the long term, it is not as good as it may impact some of the industrial growth in China. The industry will normalise at the end.
“Our customers in China are still actively pursuing strategic collaborations with us,” he told reporters on the sidelines of Asia Petrochemical Industry Conference 2018 (APIC 2018) yesterday.
On Petronas Chemicals’ exposure to the currency volatility in Turkey and India, Sazali said the company is quite stable in terms of cash generation.
“India is an opportunity market. Our base markets are still Southeast Asia and China. China represents 16 per cent of our total volume,” he
Our business is still as usual. But we are closely monitoring the situation, the trade war between China and the US. In the long term, it is not as good as it may impact some of the industrial growth in China. The industry will normalise at the end. Datuk Sazali Hamzah, PetChem managing director/chief executive officer
said, also noting surging demand for its petrochemical products from China.
Moving forward, the company is looking to strengthen its downstream activities in its plants such as RAPID and Kerteh.
“We are moving towards increasing our total capacity to 14.6 million tonnes from 12.7 million tonnes after the completion of the Pengerang Integrated Complex in Johor,” said Sazali.
Earlier in his special address, Sazali said the Asia Pacific region is seeing rapid economic growth supported by increasing urbanisation, contributing to a rise in demand for petrochemical products.
“The petrochemical industry is well-placed to leverage on its proximity to the pulse of urbanisation, with 90 per cent of global urbanisation expected to take place in the East such as Africa and Asia.
“A growing middle-income population will lead to higher consumption, driving the demand for chemicals in the packaging, construction chemicals, personal care, electronics and automotive sectors,” he added.
Sazali said consumption growth is expected to be driven by Asian millennials followed by American millennials, while the changing landscape brought about by mega-trends such as urbanisation presents a need for collaboration across the chemical value chain, particularly between manufacturers and end-users.
APIC 2018 is organised by the Malaysian Petrochemicals Association, with Petronas as the corporate supporting organisation. The two-day event ends tomorrow. — Bernama