• 
• 

Published on January 3, 2008

 Petrochemicals manufacturer PTT Chemical has a new corporate-responsibility campaign, called "Shaping an Innovative Society".

"It will express how our business will grow in accordance with our partners' development in the future," says president and CEO Adithep Bisalbutr, explaining that "partners" does not begin and end with business partners, but rather covers all parties involved with the company, including academic institutes, customers and officials.

What is an innovation?

"In my opinion, an innovation is not necessarily the first occurrence of an idea for a new product or process - it's the first attempt to carry it out into practice," he says.

In the past, academic research and products developed in different directions, so manufacturers wasted a lot of money and time on research and development (R&D).

"If we want to create more innovations in Thailand, more academic research and technology is needed to boost commercial enhancement in a practical manner, in order to meet customer demand in the market," he says.

PTT Chemical has earmarked a Bt750-million R&D budget over the four calendar years from 2006-09.

It has collaborated with the Science and Technology Ministry, academic institutes and private-sector organisations to form R&D alliance networks it hopes will sustain the competitiveness of local petrochemical manufacturers.

"If we depend solely on the expertise of our in-house team, it will take a long time to develop products. Therefore, we decided to collaborate with academic institutes and other organisations," he explains.

Adithep points out that a difficulty in developing innovations in Thailand has been the fact that local researchers scarcely ever register their own patents. This represents a major difference between research in Thailand and that in developed countries.

He says the term "innovation" not only means a practical value-added product, but also refers to incremental changes to working processes or services.

"This year, we began developing supply-chain management as a new tool to manage our costs effectively. This is also an innovation," he says.

The petrochemical industry has a complicated management process, because it involves a variety of products, from upstream to downstream.

"That's the reason why a good management process is this industry's bloodstream, not advanced technologies," he says.

PTT Chemical's new supply-chain software is expected to be complete this year. It will be applied to each process, from taking products from upstream plants to crackers to plastic resin plants to packaging factories to warehouses and finally to end-users.

The software will help the company keep track of places and times for transferring goods to customers. It will not only reduce the company's logistics costs, but also boost its customers' confidence in receiving products on time.

The "Shaping an Innovative Society" campaign is not limited to issues within Thailand. Adithep says PTT Chemical plans to set up a global network to support its international expansion.

By 2010, Thailand's petrochemical commodity market will be hit by new production from upstream plants in the Middle East. Therefore, local manufacturers - PTT Chemical among them - are adjusting their strategies by seeking good partners and focusing more on value-added products.

PTT Chemical is looking for every good opportunity to invest in olefins, polymer and performance products around the world.

"We'll provide technical services and make speciality products that are more suited to our customers' requirements in each region," Adithep said.

"We'll probably go along with the PTT Group or joint ventures with other potential partner companies, because our investment projects require feedstocks based on oil and natural gas," Adithep says.

The company is also eager to seek a partner to invest in the oleochemical business, a new "green" product enjoying increasing popularity worldwide.

It has already invested in the establishment of an oleochemical plant in Thailand, which is due to commence operations soon. By 2011, it plans to introduce many innovative products on to the market. These will account for nearly 50 per cent of PTT Chemical's total revenue and bring higher operating margins.

"It's obvious we need our own innovations if we want to grow in the international market. Therefore, we'll position our company as the best partner in the business," Adithep says.

"We have a strong determination to establish a potential network domestically and internationally, in order to sustain our business and create an innovative society for our country's progress."

Chalida Ekvitthayavechnukul

The Nation