A slew of new petrochemical plants are due to come on stream in 2011 after a court order suspending 76 industrial projects at Map Ta Phut was lifted on all but two, according to BMI’s latest Thailand Petrochemicals Report.

Many of the projects are at least a year overdue, although BMI believes it may have been difficult to operate them at full capacity if they had opened in 2010 due to volatile market conditions and the impact of Gulf-based petrochemicals expansion on Asian petrochemicals prices. Despite a strong recovery in the Thai economy, domestic petrochemicals operating rates fell to 50-60% in mid-2010 before recovery towards the end of the year.

PTT industrial estate
Despite a strong recovery in the Thai economy, domestic petrochemicals operating rates fell to 50-60% in mid-2010 before recovery towards the end of the year.

Extra capacity would merely have exacerbated the situation. With more stable markets predicted for 2011, the plants will be opening in a more favorable economic climate. The resumption of activity at Map Ta Phut has boosted investor sentiment, although any similar action in the future is bound to knock confidence further and undermine Thailand’s hopes of future significant petrochemicals expansion.

As a result of the court decision to give the go ahead to projects at Map Ta Phut, PTT’s olefins capacity alone will increase from 1.8mn tonnes per annum (tpa) to 2.8mn tpa and polymer capacity will increase from 500,000 tpa to 1.5mn tpa. Based on current petrochemicals projects, Thailand was set to see new capacities of 1.9mn tpa ethylene, 1.27mn tpa propylene, 1.45mn tpa polyethylene (PE) and 200,000tpa benzene coming onstream by the beginning of 2011, mostly in the controversial industrial zone.

Soon after the lifting of the order, Siam Polyethylene Company began operations as its new 350,000tpa solution phase linear low-density polyethylene (LLDPE) train (SPE II). Ube Chemicals Asia also began commercial operations at its new nylon-6 facilities at Map Ta Phut in Q410, with combined capacity of 50,000tpa. Asahi Kasei Chemicals also resumed construction of its 200,000tpa acrylonitrile and 70,000tpa methyl methacrylate plants at Map Ta Phut, which are now likely to begin operation in mid- 2011.

PTT Chemical will also double its high-density polyethylene (HDPE) capacity at Map Ta Phut to 500,000tpa. Also beginning operations in 2011 are the expansion of Integrated Refinery and Petrochemicals Company’s (IRPC) acrylonitrile butadiene styrene (ABS) unit from 117,000tpa to 200,000tpa and its increase in capacity at its propylene unit by 100,000tpa to 432,000tpa.

In 2010, Thailand had olefins production capacities of 4.43mn tpa ethylene, 2.53mn tpa propylene and 295,000tpa butadiene. Aromatics and intermediates included 2.07mn tpa benzene, 220,000tpa ethylbenzene, 785,000tpa ethylene dichloride, 545,000tpa styrene, 900,000tpa vinyl chloride monomer and 3.06mn tpa xylenes. Resins capacities include 1.43mn tpa HDPE, 260,000tpa low-density polyethylene (LDPE), 770,000tpa LLDPE, 860,000tpa polyethylene terephthalate (PET), 1.58mn tpa polypropylene (PP), 405,000tpa polystyrene (PS) and 960,000tpa polyvinyl chloride (PVC).

BMI believes that Thai olefins producers are productive and competitive enough to deal with the challenges ahead. Generally, Thailand’s polymer manufacturing industry enjoys high operating rates, with production consistently at 90% of capacity and exports performing strongly, although this is dependent on export demand, with the domestic market too small to soak up output. In BMI’s Asia Petrochemicals Business Environment Rankings matrix, Thailand scores 66.9 points, up 2.0 points due to an improvement in market risks following the court approval of a range of petrochemicals projects at Map Ta Phut. It is in sixth place, 5.0 points behind Taiwan and 3.4 points ahead of India.

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.
BMI offers three main areas of expertise: Country Risk BMI’s country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including Daily Alerts, monthly regional Insights, and in-depth quarterly Country Forecast Reports.

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