This article first appeared in The Edge Financial Daily on May 17, 2017 - May 23, 2017

KUALA LUMPUR: The chemical manufacturing unit of state energy firm Petroliam Nasional Bhd (Petronas) is looking to grow “aggressively” in specialty chemicals to meet demand in new regional markets and profit from higher margins, its chief executive officer (CEO) told Reuters yesterday.

Petronas Chemicals Group Bhd (PetChem) currently sees only 0.2% of its total sales volume come from specialty chemicals but the company is aiming for 15% in the next 20 years, CEO Datuk Sazali Hamzah said in an interview.

“Our game plan is to aggressively pursue it beyond 2020. We may partner, buy over companies or even do direct licensing,” he said.

The affordability of specialty chemicals in its key markets of Southeast Asia, China and India is increasing as those economies expand, creating new demand opportunities, Sazali said.

Specialty chemicals are high-value raw materials used in the manufacture of consumer products such as high-performance tyres and LCD televisions.

Last month, PetChem said it planned to set up a plant to produce specialty chemical isononanol at the Pengerang Integrated Complex (PIC) in Pengerang, Johor, with a total investment cost of US$442 million (RM1.91 billion).

Sazali said there could be more specialty chemical plants at the PIC as well. Isononanol is a building block for chemicals used in the auto, cable and construction sectors.

The company is spearheading the petrochemical component of the PIC, which is Petronas’ largest downstream project in Malaysia with an estimated US$27 billion total investment. — Reuters