November 10, 2004 Vinythai
on the Doubling of the VCM Capacity Project
Vinythai PCL (VNT) announced on
November 10, 2004 that the Board approved the doubling of the
Vinyl Chloride Monomer (VCM) production capacity at its plant in
Map Ta Phut. The project, which is based on the latest Solvay
technology, is estimated to cost roughly Baht 2,300 million, and
would be debt-financed by local bank(s).
Construction will begin in 2005 with production expected to commence in September 2006. The expansion will double Vinythai's current VCM capacity of 200,000 tons per annum (tpa) to 400,000 tpa. VCM is the major feedstock for PVC production. Of the additional VCM capacity, the Company will sell 150,000 tpa under a long-term contract with a local producer of PVC, APEX Petrochemical Co., Ltd. (APEX) who currently imports VCM for its own PVC production. The remaining 50,000 tpa will be exported or sold domestically. The Company also has a tolling agreement with APEX on the production of 48,000 tpa of PVC. A relevant MOU has been signed between VNT and APEX.
Main raw material required for the expanded capacity, Ethylene Dichloride (EDC), will be sourced by imports from the international markets. The Company is pursuing the study of an upstream integration into chlorine and caustic soda production facility. The decision will be taken after finalizing whether ethylene would be sourced either from local or abroad.
By getting access to an additional 48 ktpa PVC without additional PVC investment, the Company is well-positioned to take advantage of a growing PVC export market. The expansion project is subject to the approval from the Company's bondholders, the Board of Investment, and the environment impact assessment authorities.
The Company's Board of Directors believes that this expansion will reinforce Vinythai's position as a key player in the regional vinyl industry and add significant value for the Company and its shareholders.
VNT is a listed company on the Stock Exchange of Thailand; the stock is included in the SET 50 Index. The major shareholders are Solvay, S.A of Belgium and Charoen Pokphand Group companies of Thailand, currently holding 46.4% and 25.9% respectively.
VNT is the third largest vinyls producer in South East Asia. It currently has a fully integrated PVC production capacity of 210,000 tpa, with the VCM capacity of 187,000 tpa (under current increase of capacity to 200,000 tpa), and Caustic Soda capacity of 125,100 tpa (under current increase of capacity to 133,000 tpa).
Vinythai PCL http://www.vinythai.co.th/
In 1989, the Thai
government, through the Board of Investment, granted promotional
privileges to Vinythai to operate as one of the nation's largest
petrochemical down streamers in the National Petrochemical
Complex (NPC-2), for the production of polyvinyl chloride (PVC),
vinyl chloride monomer (VCM), chlorine, and other co-products
such as caustic soda. Vinythai's production facilities are
located in the country's industrial capital - Map Ta Put
Industrial Estate on the Eastern Seaboard in Rayong Province.
With the Charoen Pokphan Group or CP Group as a major Thai shareholder, and the Solvay Group as a major Belgian shareholder, Vinythai is also part-owned by several other investors.