SIAM Cement Group (SCG) has invested Bt173 billion in the first integrated petrochemical plant in Vietnam on expectations of starting construction next year, with production to begin by 2023.
Pichai Limprapaipong, president of SCG Group’s TPC Vina Plastic & Chemical Corp Ltd, which has made petrochemical investments in Vietnam, said that SCG Group has raised its stake in Long Son Petrochemicals Co Ltd (LSP), Vietnam’s first integrated petrochemical project, from 71 per cent to 100 per cent.
The project has had investment of Bt173 billion, the highest in Vietnam, with annual olefin production capacity of 1.6 million tonnes for production of high-density polyethylene (HDPE), linear low-density polyethylene (LLDPE) and polypropylene (PP) to cope with annual demand of 2.3 million tonnes in Vietnam.
“The project is the second-largest petrochemical project of SCG Group after that in Thailand. There have been 10 years of negotiations,” Pichai said.
The LSP project is in Ba Ria-Vung Tau, about 100 kilometres from Ho Chi Minh City.
Pichai said that the company had rushed to prepare the area for the project’s construction and this process is expected to take about six months.
The first globally integrated petrochemical project in Vietnam will be highly competitive with advanced technology and flexibility for raw-material selection.
About 70 per cent of the raw materials will be gas, which will enable lower raw material costs than seen in most petrochemical plants in the region.
“Vietnam is a major market for SCG Group and its asset value accounts for a third of the total asset value of Bt170 billion in Thailand,” Pichai said.
The petrochemical business in Vietnam has been expanding continuously, reflecting growth in premature ventricular contractions (PVC) business of more than 9 per cent a year in the country. Thailand’s annual PVC growth is around 2-3 per cent on average.
Deputy Industry Minister Somchai Harnhirun said that Vietnam enjoys average growth in gross domestic product of least 7 per cent a year.
Thailand is the ninth-biggest source of foreign direct investment in Vietnam.