MALAYSIA: PetChem makes entry into Rapid projects

Petronas Chemicals Group Bhd (PetChem) has acquired three petrochemical firms, marking its entry into Petronas' Refinery and Petrochemical Integrated Development (Rapid) projects in Pengerang, Johor.

The deal made via a related party transaction with Petroliam Nasional Bhd's (Petronas) unit Petronas Refinery and Petrochemical Corp Sdn Bhd (PRPC) was for 100% equity interest in PRPC Glycols Sdn Bhd, PRPC Polymer Sdn Bhd and PRPC Elastomers Sdn Bhd.

PetChem president and chief executive officer Sazali Hamzah said the acquisition was expected to contribute positively to the group's future earnings and revenue as well as achieve its vision in becoming a petrochemical market leader in South-East Asia, aside from maximising shareholders' value.

He said the plants were involved in projects with a future investment cost of about USD3.9 billion, for the polymers, glycols and elastomers segments. These have a combined total capacity of about 2.7 million tonnes per annum.

"The deal supports PetChem's strategy in strengthening its market position as well as diversifying its product portfolio into differentiated and specialty chemicals.[…] It is also a competitive edge for the group to benefit from a high degree of integration within and across the Rapid project facilities," Sazali said in a statement.

The first petrochemicals production was slated to commence after the completion of the PRPC refinery, scheduled in 2019.

Noteworthy also is that the firms' assets and liabilities amounting to USD110 million (RM472.59 million) would be assumed by PetChem.

The transaction would not have any material effect on its earnings or net assets, nor impact its issued and paid-up share capital.

Source: Daily "The Star", Kuala Lumpur; 4 Nov 2015
(Syed Rashid Ali, Karachi, Pakistan)