Firm unveils $5.4bn petrochemical plant
Siam Cement Group (SCG) has reinforced its footprint in Southeast Asia with the launch of Vietnam’s largest petrochemical plant, aiming to make the country its major investment base in the region.
Subsidiary SCG Chemicals (SCGC) opened the Long Son Petrochemicals (LSP) complex, a fully integrated facility designed to support Vietnam’s economic growth.
Kulachet Dharachandra, executive vice-president and country director for Vietnam at SCGC, said the project highlights Vietnam’s strong potential in both domestic and export markets, buoyed by more than 60 free trade agreements.
SCGC operates petrochemical plants in Thailand, Indonesia and Vietnam, with LSP set to enhance competitiveness regionally and globally, he said.
The US$5.4-billion (173-billion-baht) project is SCG’s largest single investment in Vietnam, where the group has been active for 33 years, with $7 billion invested across 28 companies and 50 plants.
The LSP facility will produce 1.4 million tonnes of olefins-derived petrochemical products annually, feeding demand for plastics such as high-density polyethylene, linear low-density polyethylene and polypropylene, which averages 4 million tonnes a year in Vietnam.
Its flexible technology allows switching between naphtha and propane feedstocks, with propane currently accounting for 70% of input to cut costs.
SCGC has committed an additional $500 million to upgrade the plant under the LSP Enhancement Project, adding ethane storage and processing capacity.
Construction is 20% complete and expected to finish by 2027.
The company plans to use more ethane — a colourless, odourless, gaseous hydrocarbon — as a raw material to reduce its dependence on naphtha, which is a product of fossil fuels.
This can help to avoid the impact of crude oil price volatility, which affects naphtha prices, leading to expensive raw materials, chief executive and president Sakchai Patiparnpreechavud said earlier.
SCGC previously secured a 15-year ethane supply agreement from the US, he said.
The company forecasts LSP’s annual turnover at $1.5 billion, with a sales volume of 1 million tonnes, but has ruled out a second phase for now, citing a focus on sustainable growth.
SCGC also plans to earn 2 billion baht over 3-5 years from its new business offering digital solutions to customers across industries that want to improve factory operations.