Thailand: Siam Cement Group to invest in new petrochemical complex.

(From Thai Press Reports)

Section: Corporate News - Olefins plant part of Bt60-billion plans, The Nation reports.

The Siam Cement Group (SCG) will invest Bt60 billion in a new petrochemical complex, its largest project since the 1997 economic crisis. The project was announced on Wednesday, when Thailand's largest manufacturing conglomerate reported a 30-per-cent year-on-year drop in its third-quarter net profit, largely on shrinking margins in its petrochemical business.

SCG executives said the large profit decrease was misleading, because in the same quarter last year, the company booked a Bt2.3-billion extraordinary gain from the sale of non-core assets. Also last year, the business enjoyed one of its best years ever.

Still, excluding the extra gain, the third-quarter results showed a year-on-year decline of 12-13 per cent.

Chief financial officer Roongrote Rangsiyopash said the petrochemical business was the biggest contributor to the group's profit decline. Margins were squeezed by rising prices in naphtha, the company's main raw material.

Group president Chumpol na Lamliang said the plan to invest in a second olefins complex reflected the group's confidence in the future of the petrochemical business and that it could pursue business competitively and profitably in foreign markets.