KUALA LUMPUR (Jan 23): Petronas Chemicals Group Bhd (Petchem) will be investing “roughly RM6 billion to RM7 billion” in new plants to produce derivatives and specialty chemicals over a 15-year period from 2020.
Chief executive officer Datuk Sazali Hamzah said the plants will be located at the Refinery and Petrochemical Integrated Development (Rapid) hub in Pengerang as well as in Kerteh, Kuantan and Sabah and Sarawak.
The investments are still at the stage of preliminary discussion, and the details have yet to be finalised, Sazali told reporters at InvestMalaysia 2018.
He said Petchem may use internal funds or borrowings to fund the plants, depending on the group’s cash position at that time.
Sazali said Petchem is positive about the group’s performance for the current year thanks to the rise in oil prices.
He said the outlook for oil prices this year is better than last year, adding that it is hard to make projections.
“Trend-wise maybe it’s up, fundamentally it is better than last year, but the exact numbers [will be] difficult to say,” he said.
Sazali said Petchem’s strategy for the current financial year ending Dec 31, 2018 (FY18) is to sustain its operational, commercial and innovation excellence.
“The main driver for FY18 is that [we expect] market demand [to] remain the same. The market still [has] hunger for [our] products and as long as our plants are running efficiently, we will still [stay] in the game,” he said.
With heavy plant turnaround activities from 2017 to 2019, Petchem is targeting an average of 90% utilisation rate from all its 17 plants.
As at Sept 30, 2017, Petchem’s plants were running at about 91% utilisation rate.
“The industry’s average [utilisation rate] is about 85%, so if we run at 90%, we are [still] ahead of the game,” said Sazali, adding that Petchem has set aside capital expenditure of RM100 million to RM300 million for plant maintenance.
Petchem’s share price rose three sen or 0.38% to RM8.03, with 6.58 million shares changing hands, for a market capitalisation of RM64.24 billion.