PTT execs say more buyouts in the pipeline
The PTT Group's spending to acquire oil fields, refineries, petrochemical plants and other businesses has totalled Bt55.7 billion over the past few years and the assets it has acquired are now contributing 12 per cent of the group's total net profits, company executives said yesterday.
Senior executive vice president for corporate strategy and development, Anon Sirisaengtaksin, told a PTT annual conference that among the major deals were the US$200-million acquisition of Thai Shell's upstream oil and gas assets, the Bt3.4 billion takeover of Bangkok Polyethylene, the Bt20.27-billion hostile takeover of Thai Petrochemical Industry (TPI), the $250-million acquisition of HMC Polymers and the $490-million buy-out of Pogo's upstream petroleum assets in the Gulf of Thailand. "The impact on PTT Exploration and Production (PTTEP) has been a 30 per cent rise in sales revenues, as a result of its acquisitions of Thai Shell and Pogo," Anon said. In terms of net profits, PTT's recent acquisitions have contributed 27 per cent of PTTEP's net profit and 12 per cent of the net profit of the entire group, he said. In the petrochemical industry, the group's acquisition strategy had helped it to expand more into the downstream sector and obtain a scaleable production, enabling it to compete on a regional level, he said. Anon said organic growth would not be sufficient for PTT's future, and the group would continue to use mergers and acquisitions to expand. "But it must be selective; taking into account opportunities and returns," he said. The head of PTT's petrochemicals and refining business, Prajya Phinyawat, said the recent acquisition of TPI had increased the group's share of Thailand's total downstream petrochemical output from 15 per cent to 40 per cent. However, the share still lagged behind PTT's dominant role in the upstream petrochemical sector, currently somewhere between 60 per cent and 70 per cent. "We will try to balance it," Prajya said, suggesting that PTT would keep looking to acquire more downstream petrochemical plants. He said the goal was to maintain the contribution made to the PTT group by its petrochemicals and oil refining businesses at 25 per cent to 30 per cent of the total, even though the industries are expected to suffer a downward cycle in the future. At present, they contribute 35 per cent of the group's total revenues.
Pichaya Changsorn The Nation
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