Thailand’s SCG Chemicals Q4 net loss widens on LSP depreciation

Pearl Bantillo

30-Jan-2025

SINGAPORE (ICIS)–Thai conglomerate Siam Cement Group’s (SCG) chemicals operations incurred a wider Q4 net loss of baht (Bt) 3.40 billion ($101 million) on account of poor performance from its subsidiary Long Son Petrochemical (LSP) in Vietnam.

in million Thai baht (Bt) Q4 2024 Q4 2023 % change 2024 2023 Yr-on-yr % change
SCG Chemicals revenue 58,982 46,259 28% 210,298 191,482 10%
SCG Chemicals EBITDA 1,436 2,449 -41% 7,363 13,696 -46%
SCG Chemicals net profit -3,403 -2,560 33% -7,990 589
Group Sales 130,512 120,618 8% 511,172 499,646 2%
Group EBITDA   15,178 10,924 39% 53,946 54,143 0%
Group profit for the period -512 -1,134 -55% 6,342 25,915 -76%

LSP’s non-cash depreciation in Q4 was Bt3.27 billion, SCG said in a presentation to analysts on Thursday.

Operations at its petrochemical complex in Ba Ria-Vung Tao province in southeastern Vietnam were halted indefinitely from mid-October 2024 amid poor production economics.

Vietnam’s LSP is a wholly owned subsidiary of SCG Chemicals (SCGC), the petrochemicals arm of SCG.

For 2025, SCG estimates LSP’s monthly total expenses to be about Bt1.20 billion, of which 40% is non-cash depreciation.

SCG is working towards diversifying the feedstock of LSP’s cracker via an ethane enhancement project, whose estimated cost was reduced to $500 million, from $700 million previously, and will be funded internally.

The project is expected to be completed in end-2027.

It noted that ethane is about $250/tonne cheaper than naphtha, the main feedstock used in Asia for petrochemical production.

LSP is a flexible cracker which can run on up to 70% gas – either propane or ethane – in its feedstock mix, SCG said.

In line with the project, SCG has signed a 15-year deal with the US’ Enterprise Products Partners for supply of up to 1 million tonnes/year of ethane on a free-on-board basis.

A time charter of the same duration was also signed with Japanese shipping firm Mitsui OSK Lines for the transport of the gas feedstock.

LSP’s ethane enhancement project will include the building of two specialized tanks with specialized storage of minus 90 degree Celsius, SCG said.

With the addition of ethane as feedstock, “SCGC’s total feedstock pool will be more balanced and competitive”, it said, noting that gas – ethane, propane, LPG (liquefied petroleum gas) – will be for global competitiveness, while naphtha is for “operational ease and creation of HVA [high value-added] by-products”.

In the first half of 2025, SCG said that capacity additions, margin pressure and weak demand in the olefins and vinyl sectors will continue to weigh on the petrochemical industry.

($1 = Bt33.78)

Thumbnail image: Thailand Chonburi Laem Chabang Port – 24 January 2022 (Xinhua/Shutterstock)

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