THAILAND: PTT finalises plant funding - Joint venture to make biodegradable plastic

PTT Plc says its investment plan for the first biodegradable plastic production plant at Map Ta Phut in Rayong province will be finalised over the next three months.

PTT and partner Mitsubishi Chemical Corporation (MCC) have started a joint feasibility study on polybutylene succinate (PBS) ventures at Asia Industrial Estate, where PTT has about 1,500 rai (one rai=1,600 sq m) of land.

PBS could replace plastic made from fossil fuel in many applications such as packaging, electronic parts, textiles and film, said PTT's chief operating officer Prajya Phinyawat.

Construction is likely by the middle of the year once the partners have completed the study.

The memorandum of understanding (MoU) signed recently by the companies calls for a PBS production plant with production capacity of at least 20,000 tonnes a year.

The move followed a MoU signing with Massachusetts-based Myriant Technologies for a joint study on research and development on upstream biodegradable plastics. The MoU with MCC will focus on downstream plastics.

Downstream plastics are in demand amid concerns over climate change.

As one of the world's major producers of cassava and sugar, Thailand has abundant supplies of the raw materials for bioplastics production, making it a competitive location.

Business diversification into bioplastics is the new challenges for PTT's downstream petroleum and petrochemical business.

The downstream segment last year generated 1.3 trillion baht of the company's sales totalling 1.9 trillion baht.

PTT's chief executive Prasert Bunsumpun said that PTT's revenue may rise 10% to 2.3 trillion baht this year.

Rising sales are being driven largely by full operation of its 26 projects, including an ethylene cracker plant, a liquefied natural gas terminal and a sixth gas separation plant that were delayed last year.

PTT expects sales to top 2.5 trillion baht next year and to reach 3.5 trillion baht by 2015 through investment expansion worth 1 trillion baht, half of which will be slated for upstream products in oil and gas over the period.(Syed Rashid Ali, Karachi, Pakistan)