10/31/2012

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MALAYSIA: PetChem to stop vinyl business

In its filing with Bursa Malaysia, PetChem said the discontinuation of the business would result in a charge of RM560 million for the fourth quarter of 2012.

"The amount mainly relates to provision for decommissioning and site remediation expenses, provision for contract termination dues and impairment expense.

"The decommissioning and site remediation expenses as well as contract termination dues will result in future cash expenditure in phases, mainly from 2013 onwards,” it said, adding that the cash expenditure for the financial year ending Dec 31, 2012, was not expected to be material to the group's cashflow.

The performance of the vinyl business, PetChem said, had not been satisfactory compared with its other businesses as it was not as closely integrated within the group's product value chain.

The three plants manufacture and sell two key products, namely vinyl chloride monomer (VCM) and polyvinyl chloride (PVC).

Meanwhile, PetChem said the group would initiate a divestment process for the sale of its 93.1% interest in Phu My Plastics and Chemical Company Ltd, which runs the vinyl plant in Vietnam.

Source: Daily "The Star", Kuala Lumpur; 30 Oct 2012

(Syed Rashid Ali, Karachi, Pakistan)

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