Thailand's SCG Chemicals and PTT Global Chemical Plan to Merge 7.1 Million Tons of Olefin Capacity

en.Wedoany.com Reported - On October 29, Thailand's SCG Chemicals (SCGC) and PTT Global Chemical (GC) finalized a plan to integrate their olefin and polyolefin businesses, proposing to transfer their relevant production facilities and joint venture equity interests in Thailand into a new company, combining approximately 7.1 million tons per year of olefin capacity. Under the proposed transaction structure, PTT Global Chemical will hold a 56% stake and SCG Chemicals will hold 44%, with the two parties planning to complete the restructuring and establish the joint venture in the second half of 2027.

This asset integration covers olefin cracker units and polyethylene and polypropylene production facilities at the Map Ta Phut petrochemical industrial base in Rayong Province, Thailand. The assets SCG Chemicals plans to contribute include the olefin units operated by Rayong Olefins and Map Ta Phut Olefins, as well as the polyethylene facilities under Thai Polyethylene, along with its equity interests in Siam Polyethylene, Siam Synthetic Latex, Bangkok Synthetics and Thai MMA.

PTT Global Chemical plans to inject its five olefin production units and polyethylene production facilities in Thailand, as well as its relevant equity interest in HMC Polymers. The assets to be integrated also cover feedstock processing systems for naphtha, liquefied petroleum gas, propane and ethane, as well as plant feedstock transfer pipelines, utilities and production support systems.

The two parties intend to complete the transaction through a share swap involving no cash consideration, jointly managing the relevant production assets and joint venture interests. The proposed integration will involve feedstock allocation, production planning and utility resource allocation for existing units at the Map Ta Phut industrial base. The two companies expect the integration to generate annual synergies of US$150 million to US$200 million, and plan to gradually realize the full expected synergies within approximately three years after the integration is completed.

Under the transaction arrangements, the two parties plan to seek shareholder approval in December 2026, complete approval procedures with the Thailand Trade Competition Commission and relevant regulatory authorities in the first half of 2027, and complete the asset restructuring after satisfying the conditions precedent to the transaction. The new joint venture is expected to be established in the second half of 2027.