Thailand’s construction material conglomerate Siam Cement Group (SCG) has set up a joint venture with Vietnam Oil and Gas Group (PetroVietnam) to build Vietnam’s first petrochemical complex with a total investment of 188 billion baht ($5.6 billion).

The Thai company owns 71 per cent through its wholly-owned subsidiaries Vina SCG Chemicals Co Ltd and Thai Plastic and Chemicals Pcl in the JV, while PetroVietnam holds the remaining 29 per cent.

Roongrote Rangsiyopash, president and CEO of SCG, told local media that it has already made the initial investment of 30 billion baht for purchasing the land. Construction is set to start next year and commence operation in the first half of 2022.

Located 100 kilometres from Ho Chi Minh City, the Long Son Petrochemicals project will develop a one-million-tonne ethylene cracker that can produce up to 1.6 million tonnes of olefins per annum.

The supply will help serve rising domestic demand and reduce Vietnam’s import of petrochemical products, Rangsiyopash said.

Since this project has been postponed for years, the cost has shot up by 20 per cent from its previous estimation of $4.5 billion. About 30 per cent of total investment will be used for the development of a deep sea port and other facilities to support the petrochemical plant.

The company’s filing cited that financing will be through a combination of foreign denominated debt and equity at 60:40.

Rangsiyopash added the project’s internal rate of return is expected to be at 13-14 per cent.

The post Siam Cement, PetroVietnam to invest $5.6b in Vietnam’s first petrochemical complex appeared first on DealStreetAsia.

DEALSTREETASIA Pte. Ltd. is a news and intelligence platform providing reports on investments, mergers, acquisitions, private equity, venture capital, investment banking and the business of startups across the Asian region.

About the author

DEALSTREETASIA Pte. Ltd. is a news and intelligence platform providing reports on investments, mergers, acquisitions, private equity, venture capital, investment banking and the business of startups across the Asian region.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Sign Up for Our Newsletter

Get notified of our weekly selection of news

You May Also Like

China Launches New Freight Train Services to Vietnam

The freight routes reduce the transportation time from an average of 20 days to between five and seven days

Reshoring China Production to Thailand: Key Sectors that Benefit

Thailand is benefitting from Sino-US trade tensions with several Chinese-based firms relocating part of their supply chain to Thailand, especially for electronics, chemicals, and automotive

Thai Airways drops to 46th position in 2022 Skytrax World Airline Awards

Qatar Airways has been voted the World’s Best Airline for a record seventh time at the 2022 World Airline Awards, winning the prestigious Airline of the Year 2022 title.