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NEWS UPDATES Asean Affairs        26  February 2011

PTTAR and PTTCH merge

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The merger of PTT's two petrochemical arms - PTT Aromatics and Refinery (PTTAR) and PTT Chemicals (PTTCH) - is expected to produce an immediate cost saving of US$40-48 million a year, rising to at least $80 million by 2015. It will also increase their present net value by an estimated $535 million over the next 15 years, to $1 billion in terms of sales and assets, PTT president and chief executive Prasert Bunsumpun said while announcing the merger yesterday.

He said the exact amount of any cost reduction would depend on crude and petrochemical prices but estimated it would range between $80 million and $154 million annually by 2015.

The immediate benefit of an integrated operation will be through the exchange of raw materials - including heavy aromatics and not just feedstock. Long-term benefits would include optimisation of facilities such as oil tanks, jetties, and steam and gas turbines, said Mr Prasert.

The near doubling of the enterprise value will increase PTT's worth to $14.5 billion. That would outstrip the $12.4 billion net value of Siam Cement's SCG Chemicals and make it the second-largest petrochemical operator in Southeast Asia, after Malaysia's Petronas Chemicals at $15.3 billion.

An analysts' consensus report pegs the current asset value of PTTCH at $8.5 billion and PTTAR at $6 billion.

The new entity will have a combined annual capacity of 8.25 million tonnes - 2.36 million tonnes of aromatics and 5.89 million tonnes of olefins - along with daily production of 228,000 barrels of refined oil.

The two units are forecast to achieve combined revenue of more than 400 billion baht this year from 375 billion last year. Their combined net profit last year was 16.6 billion baht, up from almost 16 billion in 2009.

PTT and the subsidiaries will hold separate extraordinary meetings on April 20 and 21 to seek shareholder approval. A creditors' meeting will be held in July and a new corporate name chosen.

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This year in Thailand-what next?

04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More

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