Kuala Lumpur, April 27- PETRONAS Chemicals Group Berhad (PCG), which held its annual general meeting (AGM) yesterday to present the company’s performance to its shareholders for the financial year ended 31 December 2016, last year achieved its highest plant utilisation rate ever recorded since listing.
The Group’s plant utilisation rate of 96% far surpasses world class standards and is the result of its continuous efforts in reaching sustainable outstanding plant performance.
Describing the overall performance of the Group, Managing Director/Chief Executive Officer of PCG, Datuk Sazali Hamzah said, “2016 was a tough year for the oil and gas industry. But despite significant decline in Brent crude oil and petchem product prices, PCG delivered our best ever performance since its listing”
Sazali said that in 2016, correspondingly, its production volume grew by 11% to 9.2 million metric tonnes from 8.3 million metric tonnes, the highest level ever recorded since listing. This achievement is attributed to PCG’s reliable plant operation of its top-notch facilities.
Sazali further elaborated that the Group’s commercial excellence efforts have also enabled PCG to gain additional value for its products with the highest sales volume ever recorded at 7.3 million metric tonnes, despite it being a buyers’ market in 2016.
“Against the bearish environment, PCG continues to drive commercial excellence through better understanding of our customers’ needs, sustaining and augmenting our market position, as well as enhancing our marketing and sales capability,” he said.
Given the strong operational and commercial achievements, PCG’s revenue for 2016 rose by RM324 million or 2% to RM13.9 billion amidst challenging market conditions, due to a higher sales volume and complimentary foreign exchange.
PCG’s EBITDA for 2016 rose to RM5.3 billion from RM4.7 billion in 2015, while the Group’s EBITDA margin remained strong at 38%. This is due to PCG’s well diversified portfolio of products and competitive feedstock advantage that was further supported by the favourable effects of a strengthening US Dollar.
Briefing the media on PCG’s growth strategy, Sazali also reported on the progress of its five key projects.
1. Sabah Ammonia Urea (SAMUR) Project
Project Update: Currently, both ammonia and urea plants are running at 100% full capacity. As of April 2017, a total of 148,813 tonnes of ammonia and 187,300 tonnes of urea had been produced. Majority of SAMUR Products are exported to Thailand (51%), Australia (25%) and to other ASEAN countries.
2. Integrated Aroma Ingredients Complex
Project Update: The commissioning and start-up process of the Integrated Aroma Ingredients Complex is progressing well to meet the range of 2017 start-up schedule.
3. Two-Ethylhexanoic Acid (2-EHAcid) Project
Project Update: On specification 2-EHAcid was successfully produced and delivered to overseas customers in late 2016
4. Highly Reactive Polyisobutene (HR-PIB) Project
Project Update: HR-PIB is expected to be commissioned in the fourth quarter of 2017 as planned.
5. Pengerang Integrated Complex (PIC) Project
Project Update: As at end March 2017, the Pengerang Integrated Complex (PIC) development is around 62% overall project progress. This project is progressing well whereby to date the overall petchem project for polymer and glycol is more than 30% and slightly ahead of schedule. On 18 April 2017, PCG approved the Final Investment Decision for an isononanol plant at Pengerang Integrated Complex. This is yet another strategy of PCG to grow further in specialty chemicals.
Speaking of what lies ahead for PCG, Datuk Sazali Hamzah shared that the slight recovery of petrochemicals prices in quarter 1 of 2017 is driven by the improvement of the overall energy industry. With global oil & gas sector growth expected to improve slightly, PCG foresees that demand for petrochemicals will remain moderate.
Sazali said “PCG will continue to work on sustaining our world class operational excellence, while keeping health, safety and environment as our utmost priority. We will continue to optimise cost and improve customer experience. And as Southeast Asia remains our key market, we will continue to further expand our presence in this region”
He also mentioned that PCG will focus on the delivery of all its growth projects to ensure minimum disruption affecting timeline and cost. Key activities such as developing PIC products route-to-market is currently ongoing.
“The completion of PIC, as well as the current plants that we have, will provide a lot more opportunities to grow in the area of chemicals, derivatives and specialty. Moving forward, PCG is set to stay at the forefront of the industry with the ability, resilience and determination to overcome challenges.
“We continue to assess further opportunities beyond 2020 in downstream derivatives and specialty chemicals at Pengerang, Kertih, Gebeng and East Malaysia. This is part of our long term business positioning and sustainability,” he added.