IRPC to expand ABS production

IRPC, an integrated petrochemical arm of PTT Plc, will spend about $100 million to more than double its production capacity of acrylonitrile-butadiene-styrene (ABS) as part of its expanded $1.8-billion five-year "Phoenix" investment programme through 2014.

The ABS capacity increase is aimed at serving growing demand from the automotive and electronics industries, said Atikom Terbsiri, IRPC's senior executive vice-president for corporate planning and business development.

Last year, IRPC launched green ABS, an environmentally friendly product which replaces synthetic rubber (butadiene) with natural rubber in ABS manufacturing. The product has since attracted a good response from customers, he added.

The new investment will increase the ABS capacity by 70,000 tonnes per year from 2012. Currently, IRPC produces around 40,000 to 50,000 tonnes annually at its petrochemical complex in Rayong.

"We are going to add three to four more projects under the Phoenix programme including the ABS capacity expansion," said Mr Atikom, adding that IRPC aimed to double revenue contribution from specialty products to 40% by 2014.

The Phoenix programme aims to turn IRPC into one of Asean's most fully integrated petrochemical companies when the investments are completed.

Together with petrochemical projects, IRPC has planned to develop a green industrial estate in Ban Khai, Rayong, on an area of 2,500 rai. The project will be constructed in phases over three years starting with about 700 rai.

"Now we are in the process of receiving licences from concerned agencies and are working closely with the Industrial Estate Authority of Thailand and the National Economic and Social Development Board for the green estate development," he said.

The green estate especially targets environmentally friendly projects such as those in the software and knowledge-based industries, Mr Atikom added.

Meanwhile, chief executive Pailin Chuchottaworn said the recent sharp rise of oil prices had helped IRPC earn a better-than-expected gross integrated margin (GIM), at about $10 a barrel.

Protests in Egypt and high oil demand during the winter have pushed the price of Brent crude to exceed $100 a barrel. "It depends on how soon the situation in Egypt is resolved or whether the change will spread to more countries like Syria, Jordan and Libya, which have similar situations and are oil-producing countries," he said.

But overall, Dr Pailin said the oil-refining business remained competitive with an overcapacity as demand has been shrinking due to the increasing popularity of biofuels.

In November, IRPC will have a maintenance shutdown of its refinery resulting in a 7-8% loss of revenue this year. For 2010, the company expects to post total revenue of 200 billion baht.

Since 2009, IRPC has invested 8 billion baht in a combined heat and power (CHP) project. The first unit of the 220-megawatt gas turbine power plant started late last month, with full operation expected in the second quarter.

By transforming from bunker oil to gas fuel, the power plant was able to lower carbon dioxide emissions by 420,000 tonnes a year. The company has been recognised as the country's largest clean development mechanism project by the Thailand Greenhouse Gas Management Organisation.

"We are in the process of getting approval from United Nations Framework Convention on Climate Change (UNFCCC) to sell the carbon credits," he said.

Shares of IRPC closed yesterday on the Stock Exchange of Thailand at 5.35 baht, up 15 satang, in trade worth 1.03 billion baht.