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Published on February 20, 2008

Nearly two years after taking the leadership of the debt-ridden Thai Petrochemical Industry (TPI) and changing its name to IRPC, president and CEO Piti Yimprasert says the company's debt has been reduced from Bt140 billion to only Bt18.1 billion.

He describes the past two years as the hardest of his working life, but says he has achieved his goals faster than expected.

Piti recalls that when PTT president Prasert Boonsampun first offered him the top job at IRPC, he turned it down. PTT had then just taken a major stake in TPI and Prasert asked him: "Who, then, has the ability to run Thailand's largest integrated refinery and petrochemical complex?" It was a difficult question that Piti eventually answered by taking the job and heading up a firm with a 10-year history of conflict between its owner and creditors.

"I knew I had to face pressure from existing shareholders who had lost their business, but that was not my problem," he says. "The main problem was how to manage the business so that it survived from a debt burden of Bt140 billion, following a debt-restructuring plan, and how to save the jobs of 9,000 IRPC staff."

Piti remembers his disbelief when he began to work at IRPC to find that the huge company had no management system. The company was operated by the top management alone, and they were the company's major shareholders in the period before PTT stepped in to buy a major stake and take over.

With long experience in state and private enterprises, including PTT, National Petrochemical, Alliance Refining, Star Petroleum Refining, Rayong Refinery, Thai Lube Base, Thai Oil and Thai Oil Power, Piti's first job at IRPC was a 360-degree reorganisation of business management by setting up staff career paths and shifting management authority from top-level to mid-level.

In reorganising the company by decentralising administrative power to lower levels, Piti decided to use an Enterprise Resource Planning programme to manage and improve the company's human resource system. The programme will be completed by the end of this year with total investment of between Bt300 million and Bt400 million.

"Another main problem was that our staff did not have enough potential because they were familiar with doing what their managers ordered. Therefore, we've tried to encourage them to change their way of thinking," he explains.

IRPC launched an early-retirement programme in an effort to trim both the company's workforce of 9,000 and its salary bill of about Bt400 million every month. So far, it has spent between Bt700 million and Bt800 million to reduce its workforce by 20 per cent.

Its process improvement also strengthened its credit line, which helped IRPC save between Bt700 million and Bt800 million when it issued bonds last year.

Just six months after he took over the company, Piti says the staff began to see their career paths and, recognising their life's goals, adopted a new attitude towards the company.

In 2006, Piti decided to change the company's name from TPI to IRPC (Integrated Refinery Petrochemical Complex).

"We had to change the corporate name to kill the bad old reputation and to change the negative feelings for the old name because of conflicts between the former owners and creditors," Piti says.

He was also concerned about the business overview and managing the company to generate higher income to deliver higher benefits to its partners, including shareholders, customers, suppliers and staff, as well as caring for the environment.

He set aside a five-year investment budget of US$1.4 billion (Bt45.54 billion) to improve IRPC's production efficiency and to upgrade the refining plant to meet Euro IV emission standards.

It is now considering investment of a further $600 million to participate in a by-product project with Thai Oil.

Boosting cooperation with PTT, its major shareholder, and with other companies under the PTT umbrella such as Thai Oil, allows IRPC to increase its bargaining power when buying raw materials. For example, cooperation with Thai Oil in purchasing oil is expected to save IRPC Bt1 billion this year.

Nearly two years down the track, Piti's business overhaul at IRPC has seen the big company's image change from one of constant conflict to efficiency and environmental friendliness. IRPC has also become the largest integrated refinery and petrochemical complex in Southeast Asia, with revenue of Bt165.14 billion and a net profit of Bt11.5 billion in the first nine months of 2007.

After the first nine months of last year, the company's debt was also down to only Bt38.4 billion.

Piti, 62, who plans to retire this year, says he has spent two years achieiving IRPC's recovery as a healthy integrated refinery and petrochemical firm. He believes he will now be able to pass on a healthy company for a new management team that will replace him.

"When I started work at IRPC, I faced more problems than ever before, especially the legal case filed by IRPC's existing shareholders. But that did not force me to leave the company. It challenged me to manage the business so that it could survive the crisis and become a healthy firm. I am now determined to pass IRPC on in as perfect a condition as I can, to whoever will manage it when I retire," he says.

Somluck Srimalee, Chalida Ekvitthayavechnukul

The Nation