KUALA LUMPUR: Petronas Chemicals Group Bhd (PCG) will pump the bulk of this year’s US$1 billion (RM3.9 billion) capital expenditure (capex) into the Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor, and the Sabah Ammonia Urea (Samur) project.
The US$1 billion was part of PCG’s US$4 billion five-year capex until 2020, said PCG chairman Md Arif Mahmood after the company’s annual general meeting, here, yesterday.
The Samur project is 98 per cent completed and is expected to be operational in the second half of the year.
It is expected to have a production capacity of 1.2 million tonnes per annum (mtpa) in urea production when fully operational. The full capacity production target will be realised in a year.
In the initial stage of operations in the fourth quarter, Samur is expected to produce 150,000 mtpa.
PCG also has the Integrated Aroma Ingredients Complex project in Gebeng, Pahang, which is expected to come on stream in October. It will produce citral, citronellol and
L-menthol aroma ingredients for the fragrance and flavour industries.
PCG president and chief executive officer Datuk Sazali Hamzah said the aroma plant would start commercial operations next year.
“It is a small specialty plant, with capacity for 50,000 mtpa. Specialty plants are smaller but the margins are better,” he said.
The Samur and aroma plants will start contributing to PCG’s bottom line from the end of this year.
“For Samur, we are thinking of running 70-75 per cent of the plant’s capacity next year.”
He said PCG’s full plant capacity was 10.8 million mtpa and included products such olefins, derivatives, urea and methanol.
Of these, olefins derivatives are the most lucrative, contributing 70 per cent to PCG’s revenue.
On PCG’s performance last year, Sazali said it was a good year for the company.
“If you look at the market, the average price of all the products we sell came down 27 per cent. But we made it up through very reliable plant operations. We made up for the lower margin through an increase in production.
“Our profit-after-tax was RM3.1 billion. These are good numbers relative to what is happening in the market,” he added.