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Published on November 22, 2007

An earlier report said SCG was planning to develop a US$3.7-billion (Bt125 billion) petrochemical complex in Vietnam. SCG will cooperate with local partners, including PetroVietnam and VinaChem, to develop the project. The complex, to be developed in Long Son in the southern province of Ba Ria-Vung Tau, is scheduled to be fully operational by 2013.

SCB Securities quoted SCG's Investor Relations Department as saying the cost of the project was not as much as quoted in the newspaper. Building a new naphtha cracker will cost about $1.5 billion, and investment in the downstream business (1 million tonnes of polyolefin products) will come to about $600 million. It will also have to invest in an infrastructure project, but the broker believes the total cost will still not reach the $3.7 billion stated in the report.

SCB Securities said the stock still provided a sustainable and attractive dividend of Bt15 a share, or a yield of 5.9 per cent. However, SCG's share price will be pressured in the short term by rising naphtha and coal prices, which follow crude oil, plus weak domestic demand for cement and building materials.