Thailand’s SCG Group has released its Q3 and nine-month business results for 2024. Notably, the Group announced that it has temporarily halted operations at the Long Son Petrochemical Complex (Ba Ria-Vung Tau) to manage overall business costs and will restart when market conditions become more favorable.
The Long Son Petrochemical Complex has temporarily ceased commercial operations. Photo: LSP |
The Long Son Petrochemical Project (LSP) – Vietnam’s first integrated petrochemical complex, officially commenced commercial operations on September 30, achieving a production volume of 74,000 tons of resin during the trial period.
However, in Q3 2024, excluding the non-recurring financial income from the termination of the interest rate swap (IRS) at LSP valued at VND 1,560 billion (equivalent to USD 61.5 million), the petrochemical sector (SCG Chemicals – SCGC) recorded a net loss of approximately VND 2,630 billion (USD 105 million) due to foreign exchange rate impacts from the appreciation of the Baht and reduced equity income from affiliates.
LSP alone recorded a net loss in Q3 2024 (excluding IRS) of approximately VND 1,560 billion (USD 62.9 million).
In the first nine months of 2024, LSP incurred fixed costs for the operation of downstream production, mainly depreciation and interest.
In the last quarter of this year, fixed costs from upstream operations will be recognized once commercial operations stabilize.
However, given the global petrochemical industry’s downturn with supply exceeding demand and weakening demand for petrochemical products, LSP made the decision to temporarily cease commercial operations and will resume production when the market recovers.
“This strategic decision demonstrates the project’s adaptability to the dynamic and challenging market conditions and also presents an opportunity for LSP to prepare to seize opportunities when the market rebounds,” SCG stated.
Additionally, SCGC is implementing an investment project to enhance the production process at the Long Son Petrochemical Complex (LSP), aiming to strengthen long-term competitiveness by increasing operational flexibility.Â
With an investment budget of USD 700 million, primarily allocated for constructing ethane storage tanks and related infrastructure, the project is expected to be completed by the end of 2027. Once operational, LSP will produce olefins and polyolefins to meet the growing demand from Vietnam’s consumer goods sector.
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