PETALING JAYA: Petronas Chemicals Group Bhd (PetChem) says hiccups in China due to the Covid-19 pandemic-led shutdowns are not expected to dampen the performance of its key market.
Its managing director and CEO, Mohd Yusri Mohamed Yusof, disclosed that the group projects the world’s second largest economy to continue to grow at around 8% this year and its demand for PetChem’s products will remain.
“From the perspective of Covid-19 lockdown that is happening in China, we are managing this by distributing to other ports and to channel products to other areas outside the affected area,” he told the media in a virtual briefing following the group’s AGM yesterday.
“We believe China will continue to remain a key market for us.”
According to the group’s annual report, the Chinese market contributed 16% towards its top line last year.
On the ongoing Russia-Ukraine conflict, Yusri said the situation has created some instability in the feedstock prices, particularly gas. He noted that the prices of products derived from gas, such as urea, have skyrocketed since the first quarter of this year.
In 2021, the average price of the petrochemical stood at US$513 per tonne, more than double the preceding year’s average of US$251 per tonne.
However, the PetChem managing director/CEO believes the elevated prices will be temporary.
“Currently, we are benefiting but it will not be a norm and will stabilise over time.”
With regard to Malaysia’s transition to an endemic phase of the Covid-19 situation this year as well as its overall outlook for 2022, Yusri outlined that PetChem remains cautious in view of the rising oil and commodity prices as well as geopolitical tensions that may impact the global economy.
Yusri stated that the group will continue its operational and commercial excellence, cost optimisation efforts and pursue growth opportunities in 2022.
“We are confident that our solid fundamentals will enable us to maximise opportunities while navigating uncertainties in a post-pandemic world, while continuing to create sustainable value for all our stakeholders,” he said.
At the briefing, PetChem said its wholly owned subsidiary, BRB International, strengthened its presence in the region as a key silicone manufacturer with a new silicone blending facility in Gebeng, Pahang, which has an annual capacity of 8,000 tonnes. The facility will allow it to have a diverse product range, enabling it to enlarge its specialty portfolio and gradually expand its product offerings to its customers.
Additionally, PetChem recently achieved final investment decision to build a melamine plant in Gurun, Kedah, potentially making it the sole melamine producer in Southeast Asia.
As for the group’s Pengerang Integrated Complex (PIC), Yusri said it is now in the final stage of start-up readiness, which provides another platform to strengthen its position in basic and specialty chemicals.
“We expect to commence start-up in the second quarter of 2022. With PIC, we will increase our production capacity from 12.8 million up to 14.6 million tonne per annum.”
On the merger and acquisition front, which PetChem has disclosed is one of its growth levers for this year, Yusri stated that it has identified several targets and is working on them and will announce the progress once things have firmed up.
