KUALA LUMPUR: Petronas Chemicals Group Bhd (PCG) has set aside RM4.3 billion in capital expenditure (capex) for the next two years which will be utilised for the completion of its petrochemical project at the Pengerang Integrated Complex (PIC) in Johor.
Its chairman Datuk Md Arif Mahmood said the petrochemical project is a significant growth development for PCG to broaden its product portfolio and further diversify into specialty chemicals and solutions.
“The petrochemical project at PIC is scheduled to be operational in 2019. As at March 2018, the project is at 74 per cent completion and on schedule,” he told reporters after the company's shareholders meeting today.
PCG will also allocate another RM600 million operation capex mainly for the company's turnaround activities at its five plants to maintain its operational efficiency.
“We plan to maintain the same level of production utilisation of more than 90 per cent.
“Margins will be dependent on the market condition. If the price remains strong, we should see a good performance this year,” he added.
Managing director and chief executive officer Datuk Sazali Hamzah said PCG has completed its first turnaround activity for its propane dehydrogenation plant, PC MTBE Sdn Bhd in Kuantan.
The plant mainly produces additives to boost octane level to improve burning of fuels and reduce emissions.
“This year's turnaround activities are more complex. We expect the year 2017, 2018 and 2019 will be heavy turnaround period," he said.
Sazali said the company would continue to carry out its operational and commercial excellence initiatives to achieve its target.
“The completion of PIC, as well as the current plants will provide a lot more opportunities to grow in the area of chemicals, derivates and specialty chemicals,” he said.
PCG would assess further opportunities beyond 2020 in downstream derivates and specialty chemicals at Pengerang, Kertih, Gebeng and East Malaysia for long-term business positioning and sustainability.
Arif said PCG plans to add value to its existing products and further explore opportunities for downstream projects.
“PCG's specialty chemicals revenue currently contributes about five per cent. We want to grow this segment to at least 15 per cent in the next 20 years,” he said.
The company's specialty chemicals products include addictive for automotive lubricant, perfume aroma and personal care products.
PSG is an integrated chemical producer and primarily involved in manufacturing, marketing and selling a diversified range of chemical products including olefins, polymers, fertilisers, methanol and other basic chemicals and derivates products.
On earnings, PCG net profit in the year ended December 31, 2017 (FY17) catapulted 37 per cent to RM4.4 billion from RM3.2 billion.
FY17’s revenue rose 26 per cent to RM17.4 billion from RM13.7 billion fuelled by improved product prices and higher sales volumes, as well as the impact of strengthening US dollar.
PCG’s stock closed four sen lower to RM8.41 per share with 8.79 million shares traded today, giving a market capitalisation of RM67.28 billion.