Bangkok--Mar 3--Ogilvy Public Relations Worldwide
Thai Olefins Public Company Limited (TOC), the country’s leading ethylene and propylene producer, announced its long-term business plans with an important mission to increase maximum value to all shareholders, clients, employees and the entire society. The company also sets two goals to enhance its competitiveness and further upgrade its operation system to world-class standards.
TOC announced that in the year 2004, the company had a total net sales of Bt23,835 million and a total net income of Bt24,451 million, making a net profit of Bt6,482 million, an increase of 361% from 2003. The jumping sales income and net profits were due to the Higher Product to Feed Margin, which came from higher product prices. Mab Ta Phut-based Ethylene and Propelyne prices increased by 44.5 and 41.3% respectively from the year 2003. Prices of by-products such as Pyrolysis Gasoline and Mixed C4 also rose. In addition, the company had lesser burden in terms of lower interest expenses due to the issuance of debenture with lower interest rate to replace the bank loan with higher interest rate.
Mr. Aditheb Bisalbutr, President of TOC, said that the financial results of the year 2004 were highly satisfactory. The committee agreed to pay a dividend of Bt 3 per share to shareholders, or at minimum 30% of the net profits. In addition, the company has a policy to maintain the rates of net profit and sustainable growth by investing in related businesses to increase value added. The Board of Committee agreed on February 28, 2005, to invest in 20% of shares re-issued by Vinythai Public Company Limited, which will issue the warrant of 237.04 million shares to the company at an exercise price of Bt11.50 per share with the exercise period schedule in August-November 2005.
The investment in Vinythai is part of an expansion plan to PVC manufacturing and distribution. Vinythai will spend the capital from the share issuance in improving the manufacturing capacity of Vinyl Chloride Monomer (VCM), an important material for PVC plastic production, from the current 200,000 tons a year to 400,000 a year. The investment will enhance Vinythai’s competitiveness and TOC will benefit in selling Ethylene to Vinythai whose factories will need more 90,000 tons of Ethylene. In addition, TOC also gains access to the financial results of Vinythai via its financial statements. This increases TOC’s net profits.
Since 2003 the company has been continuously investing in businesses in line with its policy of maintaining its net profits and dividend to shareholders. TOC has expanded into new potential industries such as the setting of TOC Glycol Company to operate the first MEG plant in Thailand to produce materials for polyester used in garment and PET bottling industries. Currently, the construction of the US$210 million investment is 45% complete and commercial production expected to begin in the second quarter of 2006 with an MEG production capacity of 300,000 tons a year
In 2004, the company bought 50% shares of Bangkok Polyethylene Public Company Limited (BPE), its first step into the High Density Polyethylene (HDPE). Currently, BPE is in the process of improving its facility to increase its HDPE production capacity by 50,000 tons annually to a total of 250,000 tons a year. Meanwhile, TOC, together with PTT Public Company Limited, National Petrochemical Public Company Limited (NPC) and Aromatics (Thailand) Public Company Limited (ATC), set up the PTT Phenol Company Limited (PTT Phenol) to produce Phenol to enhance its business operations and to produce joint-facilities including electricity and steam to maintain competitiveness.
In January 2005, the company together, with Cognis Thai Limited (Cognis) established a joint venture named Thai Ethoxylates Co., Ltd, to produce Fatty Alcohol Ethoxylates to local producers of consumer and health care products, as part of a plan to promote Thailand as the region’s production base. The commercial manufacturing of the US$20 million facility will begin in the second quarter of 2006 with a capacity of 50,000 tons a year. TOC is also implementing two additional projects concerning EO Derivatives, comprising the production units of Chorine Chloride and Ethanolamines each with a capacity of 20,000 tons and 50,000 tons a year respectively. Both projects are expected to start operations in the first quarter of 2007. All the three projects will definitely boost TOC’s financial status as price fluctuation of products will be less, allowing the company to have a consistent expansion.
For this year, the company expects that sales of Ethylene and Propylene will increase by 300,000 and 50,000 tons respectively, due to the expansion of 60% capacity for Ethylene production to 385,000 and Propylene production to 190,000 tons a year respectively.
Mr. Aditheb added that worldwide Olefins business is expanding. As a leading manufacturer, the company needs to carefully plan its business operations in order to efficiently accommodate the growing market and enhance its global competitiveness. The company can increase its capacity using facilities of existing plants, diminishing capital per each investment unit. Therefore, apart from the expansion of the Olefins factory’s second unit, the company will expand the first production unit to increase the Ethylene and Propylene production by 130,000 tons and 120,000 tons a year respectively. The completion is due in the third quarter of 2007.
The company is committed to operation excellence to international standards as well as preparing itself to accommodate future growth. In the first two months of 2005, TOC received awards which indicated that it has succeeded in developing its operational management up to international standards. TOC has recently been awarded Thailand Quality Class Award from Thailand Productivity Institute, and Overall Most Improved Company for Best-Management Practices from Asia Money magazine. The awards mark the year of success for the company, which will officially celebrate its 15th anniversary on March 14, 2005 at the Grand Hyatt Erawan, Bangkok.
Thai Olefins Public Company Limited was established in 1990. It is Thailand’s leading producer of ethylene, propylene and other petrochemical by-products namely PYGAS, Mixed C4, Tail Gas, Cracker Bottom and Hydrogen. Its plant is located in Mab Ta Phut Industrial Estate in Rayong province and has a nameplate capacity of 685,000 tons per year of ethylene and 240,000 tons of propylene per year.
For further information:
Anong Charuskraisorn ([email protected])
Public Service Section Manager
Thai Olefins Public Company Limited
Tel. 0 2573 5411
Kovit Savangvareesakul
[email protected])
Ruanrudee Taweepol
([email protected])
Ogilvy Public Relations Worldwide Limited
Tel. 0 2632 8300-7 ext 29 End.