PTTGC to spend up to US$1.3 billion by 2030 to improve efficiency through decarbonisation

Singapore

THAI chemical company PTT Global Chemical (PTTGC) is aiming to spend US$1 billion to US$1.3 billion to improve efficiency and cut greenhouse gas emissions by 20 per cent by 2030, chief executive Kongkrapan Intarajang told The Business Times in a recent interview.

Some US$22 billion in capital expenditure has also been earmarked for PTTGC's portfolio adjustment strategy over the next 30 years. The company is striving towards net zero greenhouse gas emissions by 2050.

The company will do this by adopting cleaner fuels such as hydrogen, utilising digitalisation to improve processes and investing in new technologies.

PTTGC's "decarbonisation pathway" is not merely a "year-by-year approach", but is instead focused on improving efficiency, evolving its portfolio, and utilising compensation-driven initiatives through the company's low carbon transition framework, said Kongkrapan.

"As a global chemicals company, PTTGC recognised many years ago the urgency of responding, preventing, and finding solutions to the impacts of climate change," he added.

PTTGC, a unit of the Thai state-owned energy firm PTT, has a diversified portfolio that includes olefins, aromatics, polymers, refinery, ethylene oxide, green chemicals, phenol, and performance materials.

Kongkrapan said there has been a spike in demand for PTTGC's petrochemical products due to changes in consumer lifestyles on the back of the Covid-19 pandemic.

The company's olefins and derivatives business continued to deliver a strong performance as polyethylene products were supported by a wide range of applications, such as packaging and hygiene applications.

PTTGC also enjoyed higher contributions from the performance materials and chemicals segment, while the gas-based feedstock segment continued to provide a "competitive cost structure".

Amid threats of global warming and climate change, regulators and investors have put pressure on companies such as PTTGC to shift to cleaner and greener energy forms.

Kongkrapan said PTTGC has "plans and strategies" that align with environmentally friendly trends. For instance, the company has bioplastics such as polybutylene succinate, which decomposes into water and carbon dioxide; and polylactic acid, which is produced using renewable materials and is commercially compostable.

PTTGC also has "upcycled products", which are formed by adding value and quality to existing plastic products.

The company has invested in various green products - oleochemicals, bioplastics, and biocomplex ethanol - and will continue to review opportunities to drive growth.

Kongkrapan said PTTGC is also currently converting some 52 to 53 per cent of its feedstock crude to chemicals. "Depending on fuel demand, we will also consider increasing our conversion rates to improve efficiency on a needs basis in the future," he said.

In July, PTTGC acquired Allnex, a German industrial coating resins company, from Advent International for US$4.8 billion.

Kongkrapan said this acquisition was a "stepping stone" for PTTGC to diversify its business portfolio into specialty chemicals, and will help the company achieve its target of 35 per cent contribution from performance chemicals by 2030.

Looking ahead, Kongkrapan said PTTGC will continue investing in sustainable processes and initiatives, and continue to look for "like-minded global and high-value businesses" to continue the diversification of its portfolio by combining environmentally friendly innovations with advanced technologies.

"We execute organisational and digital transformation alongside one another," said Kongkrapan.

"We also need to adjust and strengthen our product portfolio and enhance the quality of earning, as well as overseas investment, whereby our long-term goal is to increase margin contribution from overseas investment(s)."

PTTGC's shares, which trade on the Stock Exchange of Thailand, have risen by 0.4 per cent this year to end at 58.75 baht on Dec 30.