IRPC, the petrochemical arm of national oil and gas conglomerate PTT Plc, expects to see gross integrated margin (GIM) in its oil refinery and petrochemical businesses grow to US$13-14 per barrel on average this year as the petrochemical industry downturn has passed.
GIM is the difference between the total value of petrochemical products and the production cost. Last year GIM stood at $10.5 per barrel.
IRPC’s oil refinery produces refined oil for use as a fuel and a feedstock for the petrochemical industry.
The 2022 downturn, which stemmed from a sluggish economy caused by Covid-19, and made worse by the impact of the Russia-Ukraine war, caused a sharp drop in petrochemical prices to the lowest level in a decade, said Kanyamas Rithidej, IRPC’s senior vice-president for finance and investor relations.
Since the pandemic eased, prompting the reopening of many countries, the petrochemical industry is recovering.
The impact of lower petrochemical prices was earlier offset by more demand for refined oil.
Gas-fired power plant operators used refined oil to replace liquefied natural gas which became very expensive, said Kris Imsang, president and chief executive of IRPC.
The company is now focusing more on manufacturing high value-added products to avoid tough competition among producers of commodity-grade polymers in Asia-Pacific as well as price fluctuations of commodity-grade polymers, which have occurred frequently over the last several years, said Ms Kanyamas.
IRPC wants to make specialty polymers for use as raw materials in the manufacturing of medical devices, home appliances, auto parts for electric vehicles, energy storage equipment and floating solar panels.
Last year, the company announced it would produce products for medical purposes to serve the wellness industry.
IRPC also plans to launch a 3D printing filament as its new product in 2025.
In 2022, high value-added products accounted for 22% of total polymer sales. The proportion is expected to increase to 33% this year, 44% in 2024 and 52% in 2025.
IRPC has allocated 36.4 billion baht in capital spending for use between 2023 and 2027. More than half of the budget (52%) will go to high value-added product development.
