Petronas Chemicals takes part in Rapid

> Buys three companies undertaking petrochem projects there for RM13,000

KUALA LUMPUR: Petronas Chemicals Group Bhd (PetChem) has acquired three companies undertaking Refinery and Petrochemicals Integrated Development’s (Rapid) petrochemical projects from Petronas Refinery and Petrochemical Corp Sdn Bhd (PRPC) for RM13,000.

However, based on current arrangements between PRPC and its existing partners, there may be potential dilution to PetChem’s equity in the project companies. With the acquisition, PetChem shall also assume the assets and the liabilities of the companies amounting to US$110 million (RM470.8 million).

The projects involved are in the polymers, glycols and elastomers segments. The three companies are currently undertaking projects with a future total investment cost of US$3.9 billion with a combined total capacity of 2.7 million tonnes per year.

The projects will benefit from the integrated feedstock supply from PRPC’s refinery and cracker, also located within the same complex. Work on Rapid has already commenced after the completion of the PRPC’s refinery, which is scheduled in 2019.

PetChem president and CEO Datuk Sazali Hamzah ( pix) said with Rapid’s petrochemical projects, it will be able to strengthen its petrochemical base and concurrently diversify into selective derivatives, specialty and solutions.

“We look forward to broadening PetChem’s products portfolio into key growth areas of differentiated chemicals and increasing the group’s total production capacity to cater to the growing Asean market,” he said in a statement.

Meanwhile, Petchem’s net profit for the third quarter ended Sept 30, 2015 rose 39% to RM916 million from RM661 million a year ago driven by higher sales volumes, favourable exchange rate movement and lower feedstock costs particularly for naphtha, propane and butane.

Its revenue increased 3% to RM3.64 billion compared with RM3.55 billion in the previous corresponding quarter as the higher sales volumes and favourable exchange rate movement offset the impact of lower average product prices.

For the nine months period, net profit jumped 6% to RM2.08 billion from RM1.96 billion due to higher sales volumes and favourable exchange rate movement as well as lower feedstock costs particularly for naphtha, propane and butane.

PetChem’s revenue declined by 6% to RM10.09 billion compared with RM10.7 billion in the previous corresponding period due to lower average product prices offset by the impact of favourable exchange rate movement and higher sales volumes.

The results of the group’s operations are expected to be primarily influenced by fluctuations in international petrochemical products prices, global economic conditions and utilisation rate of their production facilities.

“The utilisation of our production facilities is dependent on plant maintenance activities and sufficient availability of feedstock as well as utilities supply. With an improved plant maintenance programme and supplier relationship management, the group aims to achieve better plant utilisation for the year,” PetChem said.