Supattanapong Punmeechaow, president and CEO of PTTGC said the spread from aromatics products are expected to continue performing well, while the margin on olefins products are likely to become stable after softening earlier. Based on these projections, the firm expects its EBITDA (earnings before interest, tax, depreciation, and amortisation) margin to stay at 12 per cent this year, unchanged from 2015.

But thank to the start-up of three expansion projects – Aromatics unit 2, Phenol unit 2, and Vencorex (Thailand)’s hexamethylene diisocyanate project – this year, the company will have a 7 per cent higher sales volume and can generate higher revenue and profit, if prices and spreads are the same as last year.

The statement showed an improved view of the PTTGC’s CEO who about three months ago said he expected the firm’s performance to be on par with last year’s.

The prospect for olefins and derivative products are expected to be good in 2017, thank to the postponement of new capacities from the United States from the middle to the end of next year. However, to prepare for the huge additional capacity of 4-5 million tonnes from the US, which has a cheap feedstock cost, PTTGC has striven to expand its sales to other Asean markets, especially the CLMV (Cambodia, Laos, Myanmar, and Vietnam) countries, from 6 per cent of total sales at present to 10-15 per cent in the next 1-2 years. “Many people may worry that in the next two years, there will have to be a lot of new capacities from the US which will hit the markets in this region. Nevertheless, we’ve found the AEC [Asean Economic Community] is growing by 8 per cent per annum,” he said.

Supattanapong said PTTGC was in a “transformation stage” and was preparing to spend its cash for fuelling its future growth. It is expected to conclude by the end of this year or early next year whether to go ahead with new major investment projects, which include the 500,000 tonnes-per-year naphtha cracking project in Map Ta Phut, and the ethylene complex project in the US.

“We’re a company awaiting growth,” he said.

After cutting its expenses by Bt630 million last year, PTTGC targets to slash them by a further Bt1 billion next year. Furthermore, the company is working with a consulting firm to conduct a comprehensive review of five areas: production, marketing, assets utilisation, efficiency improvements and procurement, and investment projects. With the objective to strengthen the firm’s sustainable competitiveness, the programme will take 18 months to implement after completing 12 weeks of study.

“We should be able to provide more details in the next three months,” he said.

PTTGC reported a 16-per-cent decrease in net profit in the first quarter, chiefly due to the maintenance shutdown of its 1-million tonne ethylene cracker in the period. EBITDA |also declined 9 per cent and sales revenue was down 19 per cent year on year.