"We hope we do not have to extend construction again. However, it depends on many factors that we're closely monitoring," Aditheb Bisalbutr, president and CEO of PTT Chemical, said yesterday.

Work on the high-density polyethylene plant, with total capacity of 300,000 tonnes a year, is 30-35 per cent complete.

The Siam Cement Group and Itochu hold 50 per cent of the project, which is expected to cost a total of US$240 million (Bt8.34 billion).

The Iranian government holds 40 per cent and PTT Chemical the remaining 10 per cent.

While the half-year setback would force up construction costs, PTT Chemical has no plan to revise the project's budget at this moment, because it has remained within the original estimated figure, Aditheb said.

PTT Chemical plans to finance its Bt90-billion, five-year investment plan with Bt28 billion in funds raised last December, $800 million from bank borrowing or bond issues, with the rest coming from its internal cash flow.

Last year, PTT Chemical earned a net profit of Bt17.3 billion on revenues of Bt73.8 billion.

PTT Chemical will issue baht-denominated bonds worth $300 million in the fourth quarter, Aditheb told reporters.

The company has shut down its Olexflex Unit-plant II for 22 days, Plant I4-1 for 67 days and Plant I4-2 for 40 days since the beginning of this year for scheduled maintenance and debottlenecking.

Following the debottlenecking, its production capacity will increase from 1.58 million tonnes a year to 1.73 million tonnes.

However, the plant shutdowns will lead to a gradual decline in revenues this year.

PTT Chemical is also considering buying ethylene from abroad to produce downstream products, thanks to the stronger baht, which makes imports cheaper.

Ethylene is forecast to cost $490 a tonne, down from $525 per tonne last year.

However, high-density polyethylene was selling for $692 a tonne in the first quarter, up $100 year on year.

Chalida Ekvitthayavechnukul

The Nation