FY12 ANALYST MEETING INTERCONTINENTAL HOTEL...
Transcript of FY12 ANALYST MEETING INTERCONTINENTAL HOTEL...
FY12 ANALYST MEETING INTERCONTINENTAL HOTEL BANGKOK
FEBRUARY 21, 2012 – 10.30-12.00 hrs
Disclaimer
This presentation includes forward-looking statements that are subject to risks and uncertainties, including
those pertaining to the anticipated benefits to be realized from the proposals described herein. This
presentation contains a number of forward-looking statements including, in particular, statements about
future events, future financial performance, plans, strategies, expectations, prospects, competitive
environment, regulation and supply and demand.
PTTGC has based these forward-looking statements on its views with respect to future events and
financial performance. Actual financial performance of the entities described herein could differ
materially from that projected in the forward-looking statements due to the inherent uncertainty of
estimates, forecasts and projections, and financial performance may be better or worse than anticipated.
Given these uncertainties, readers should not put undue reliance on any forward-looking statements.
Forward-looking statements represent estimates and assumptions only as of the date that they were
made. The information contained in this presentation is subject to change without notice and PTTGC does
not undertake any duty to update the forward-looking statements, and the estimates and assumptions
associated with them, except to the extent required by applicable laws and regulations.
2
Agenda
FY12 Highlights
Strategy and Execution
FY12 Operating Results
Market Outlook
3
Macroeconomic View
4
Year 2012 is the year of challenge for many petrochemical
players due to shrinking demand from uncertainty in global
economy and volatility of oil prices
Year 2013, however, petrochemical industry expected to be
improving as a result of demand recovery and tight supply
especially in PX market for 1H13 and MEG market for FY13
FY12 Business Environment and Operations
5
Dubai price remained high throughout the
year, with FY12 averaged at 109 USD/bbl,
and 4Q12 averaged at 107 USD/bbl
Opening-closing Dubai showed the reflection
of inventory gain/loss • 2012 : 106 – 108 USD/bbl, 2011: 92 – 105
USD/bbl
Price/spread in mixed performance
compared to previous year • HDPE 1,380 USD/ton +1% YoY
• PX-Condensate 553 USD/ton - 11% YoY
• BZ- Condensate 263 USD/ton + 46% YoY
• Gasoil- Dubai 17 USD/bbl - 6% YoY
• MEG 1,179 - 10% YoY
THB appreciation of 1.05 THB/USD with
disciplined currency hedge contributed to FX
gained of THB 911 million
70.00
80.00
90.00
100.00
110.00
120.00
130.00
140.00
150.00
Jan 1
1
Feb 1
1M
ar-
11
Apr-
11
Ma
y-1
1
Jun-
11
Jul-1
1
Aug-1
1
Sep-1
1
Oct
-11
Nov-1
1
Dec-
11
Jan-1
2
Feb-1
2
Mar-
12
Apr-
12
Ma
y-1
2
Jun-
12
Jul-1
2
Aug-1
2
Sep-1
2O
ct-1
2
Nov-1
2
Dec-
12
Jan-1
3
Feb-1
3
Dubai 2011-2012 ($/bbl)
Poor US, EU and China
economic data Uncertainty of
stability in EU
Explosion in many
refinery plants
Unrest in MENA
29.50
30.00
30.50
31.00
31.50
32.00
THB against USD 2011-2012
Key Financial Highlights YoY Stronger on volume driven
6
2011 2012 % YoY 4Q/2012
Revenue 500,305 562,811 12% 144,595
EBITDA 54,423 55,879 3% 16,281
Net Income 30,033 34,001 13% 10,389
EPS (THB/share) 6.7 7.5 13% 2.3
Adjusted EBITDA* 48,920 55,045 13% 16,312
Note* Exclude impact of inventory value and commodity hedging
Unit in THB million
-56%
5%
-10%
1%
3%
46%
-13%
-6%
10%
13%
39%
26%
15%
2%
-1%
26% Refinery
Aro
(BTX)
Olefins
Polymers
MEG
Green
Phenol
Gas
Year-Over-Year Volume and Price Trends Volume driven, utilization rates improved while prices were in mixed performance
7
Diesel-Dubai
PX-Cond
BZ-Cond
Ethylene
HDPE
MEG
ME-CPO
Phenol-BZ
FY12 Key Sales Volume Indicators FY12 Key Product Price/Spread Indicators
PTTGC’s Plants Utilization Rate
Better gas flow from GSP – 3.1 Mton,
increased 10% from year 2011 at 2.81 Mton
Volume driven thus higher utilization rates
FY11 FY12
Refinery 90% 100%
Aromatics 88% 86%
Olefins 80% 88%
Polymers 80% 96%
MEG 65% 88%
Green - FA 81% 101%
Green - ME 62% 93%
Phenol 115% 119%
2012 Key Milestones
8
A Focus on
Integration
Building a
Strong
Fundamental
Expanding
Globally
PTTAR & PTTCH culture alignment
Work process integration - 1SAP system, IMO alignment
Synergy projects value expected of USD 80-150 million
Linear programming to optimize major plants operation (Refinery, Aromatics,
Olefins and major Olefins Derivatives)
Business restructure to streamline business operations and management i.e. TEA
to be combined with TOCGC (Others are in consideration)
3 Excellence Projects (Operation excellence, marketing excellence, CAPEX
excellence from 2012-2017
Completed transactions with Nature Works and Vencorex
MOU with Sinochem
MOU with partners in Petronas RAPID
USD 1 bn bond issuance
Footstep in Myriant to build a semi-commercial plant to be complete by mid
2013
Nature Works: Study possibility of constructing second PLA plant in Asia
Key Development
in Sustainable
Growth
48%
20%
21%
2% 3% 6%
Segmental Results – FY12 Olefins and Olefins Derivatives Business contributed greatly to EBITDA
9
204
141
105
11 16 23
270
114 116
13 16 33
Refinery Aromatics Olefins andDerivative
Green Phenol Others
FY11 FY12
6.6 4.7
29.6
0.8 3.1 4.1
8.2 8.8
31.6
0.8 1.0
4.6
Refinery Aromatics Olefins andDerivative
Green Phenol Others
FY11 FY12
Unit in THB billion Unit in THB billion
Adjusted EBITDA Margin by Core BU
Revenue Breakdown Adjusted EBITDA Breakdown
15%
16%
57%
2% 2%
8%
FY12 Revenue Breakdown (%) FY12 EBITDA Breakdown (%)
Refinery Refinery
Aromatics
Aromatics Olefins
Olefins
Phenol
Green
Green
Phenol Others Others
FY11 FY12
Refinery 3% 3%
Aromatics 3% 8%
Olefins and Derivatives 28% 27%
Phenol 20% 6%
THB
563 Bn
THB
55 Bn
FY12 Sales Portion by Business Unit
10
68%
32%
Refinery
Aromatics
31%
69%
Export
Domestic 8%
92%
Export
Domestic
Export Domestic
Olefins
Export
65%
Domestic 35%
Polymers
Export
Domestic 30%
70%
EO-Based
Export
Domestic 23%
77%
Green (ME, FA)
Total Sales
THB 563 billion
39%
22% PTTGC
Others 39%
34%
35%
31%
PTTGC
34% 33% PTTGC
Others
Others 33%
By Thailand’s Market Share
HDPE
LDPE
LLDPE
Import
Import
Import
Sales portion in quantity (ton)
Agenda
FY12 Highlights
Strategy and Execution
FY12 Operating Results
Market Outlook
11
PTTGC’s Strategies Overview
“In 2012, we achieved
EBITDA uplift of USD 87
million from operational
excellence, marketing
excellence, and synergy
projects”
12
We remain committed to:
1. Enhancing our core uplift
2. Creating long-term value via HVS growth
3. Emerging into green business models
A Focus on Execution
Operational Excellence
13
------- LAGGARDS-------- -------- LEADERS ------
To achieve 1st quartile of energy efficiency and reliability
Refinery
- Alternative feedstock
- Opportunity crude and
condensate
- Processed high tan crude
- Reliability Improvement
- Catalyst improvement
- Yield improvement
- Plant flexibility improvement
- New feedstock sourcing (Condensate)
- Yield Improvement
- Shutdown I-4/1 in Nov for Quench
Tower Modification
- Variable cost improvement
- Energy saving program for HDPE I-1
- Hexane/nitrogen recovery unit
installation
Aromatics
Olefins and Olefins Derivatives Major Activities in 2012
Benefit Expected per Year
2013-2017
~91 MUSD
2012 Achievement
EBITDA uplift
53 MUSD
CAPEX for Op Ex
2013-2017
~150 MUSD
Marketing Excellence
14
- Expanded domestic sales portion of - LLDPE product 34% (2012 target = 27%)
- LDPE product 34% (2012 target = 30%)
- Total PE product: 36% (2012 target = 32%)
- Increased portion of high value products
(HVP) from 7% to 10% of total
polymers revenue, and expanded 7
grades of HVP
Major Activities for Polymers BU in 2012
Benefit Expected per Year
2013-2017
~85 MUSD
2012 Achievement
EBITDA uplift
25.1 MUSD
CAPEX for Mkt Ex
2013-2017
~10 MUSD
Natural Gas
Crude
Condensate
Cracker
Aromatics Plants
Refinery
Reformate, Heavy
Naphtha
Pygas
Condensate Residue,
Hydrogen
Light Naphtha
C3,C4
OffGas
Cracker Bottom,
Hydrogen
Synergy Projects Update
15
Exchange Stream
Products
By-Products
2012 Achievement
EBITDA uplift 9.07 MUSD
Synergy Projects Expected
Investment (M. USD)
Expected
Benefit per
year (M. USD)
Target
Completion Progress
1.Product upgrade
1.1 Offgas 177.7 76.7 4Q/14
- BoD approved additional budget for
enclosed ground flare, pipe-rack and
pipeline around 35.7 MUSD.
- Tie-in works in each plant are on going.
1.2 C3/C4 Stream 5.5 35.1 End of
2012
- Completed.
- Benefit capture depends on economic
and supply availability of each feed
type. (subject to HDPE spread)
1.3 Heavy Aromatics 0.0 1.3 Jan. 1,
2012
- Completed.
1.4
Heavy Gasoline,
Light Cracker
Bottoms and
Cracker Bottom
5.7 28.8 End of
2012
- Completed.
- 1st batch of 3-stream was transferred
to refinery on Dec 20th, 2012.
1.5 Pure H2 via New
PSA 19.8 6.6 2Q/14
- Construction is 24%- on schedule
- Completed commercial negotiation for
PSA package.
- BOI approved PSA project to get
investment promotion.
2. Cost Saving from
share tanks and jetty 0.0 0.6 2Q/12
- Signed contract with Thai Tank Terminal
to maximize utilization of existing idle
facility – completed.
3. Stream cost
reduction
Under
Study
Under
Study 4Q/14
- Construction permit for box culvert is on
going to discuss with external related
parties, plan to get permit within
Q1/2013.
Total 208.7 149.2
16
1. Debottleneck - PTTPE Cracker and Polymer Plants Under study of plant configurations, expected additional capacity of 15-20%
Downstream debottleneck expansion to capture fully-integrated margin by converting additional
ethylene into downstream products
2. Debottlenecking - PX capacity Increases existing capacity at AROII from 655Kton to 770Kton
(total PX capacity from AROI and ARO II to increase from 1,195 Kton to 1,310 Kton)
Expects completion by 3Q/15
3. Quench oil tower modification project Under study on technical and planning
To reduce naphtha: gas portion (liquid/vapor ratio) from 0.95 to 0.60 at I4-1 (mixed feed cracker)
Additional gas of 18 ton/hour
Expects completion by end 2014
4. C4 Value Enhancement Investment of USD 262 mn
ST: Export mixed C4 to maximize value
LT: To complete BV Project (C4 upgrading to Butadiene (75 kton)/Butene-1 (25kton)
Expects completion by 2013 and starts commercial operation 1Q/14
Debottleneck/ By-Product Value Enhancement
2011 Target2017
Target2022
Operational Excellence, Marketing Excellence, Capital Expenditure Excellence
Continues to Strive for Strong Profitable Growth
17
Synergy Project Excellence
Debottleneck
563
HVS
Green
Sales in THB Bn
Phase 1: Foundation for Growth Phase 2: The Growth Mode
We aim to grow ~5 percent p.a. in the next ten years
HVS
Green
New Global Hub
Expected EBITDA Benefit
Uplift 15-30%
~ 620 - 650
Actual
2012
Based on constant Dubai crude year 2012 at USD 109 per bbl
~ 800 - 900
Agenda
FY12 Highlights
Strategy and Execution
FY12 Operating Results
Market Outlook
18
Performance Summary 2012 vs 2011
1. Refinery
Diesel spread decreased 6%; volume increased 26% - GRM down
2. Aromatics
BZ spread increased 46%, PX spread down 11%; BTX volume down
1% - however P2F better from efficient management of feedstock
sourcing
3. Olefins and Olefins Derivatives
Average prices went down; higher ethane feed (17% up) from PTT
4. Green (ME)
ME spread up 5%, higher volume 39% - u-rates improved
5. Phenol
Spread down 56%; volume increased 13% - U-rate 119% (from 115%)
19
4.0
-2.0
5.1
1.6
10.0
7.5
1.5 1.9 2.9
2.0
6.6
8.2
1Q/12 2Q/12 3Q/12 4Q/12 2011 2012
EBITDA Adjusted EBITDA
4Q/11 3Q/12 4Q/12 2011 2012 +/-
Market GRM 3.73 5.94 4.66 4.96 4.71 -5%
Hedging Gain/(Loss) -0.40 0.02 0.63 -0.73 0.35 -148%
Stock Gain/(Loss) Net NRV 1.7 2.51 -0.63 2.50 -0.30 -112%
Accounting GRM 5.03 8.47 4.66 6.73 4.76 -29%
YearQuarter
Refinery BU Performance Market GRM softened QoQ, YoY upon lower spreads, however, sales increased from plant’s smooth run
20
13% 13% 14% 14% 14%
46% 52% 50% 48% 50%
12% 9% 8% 11% 9%
28% 27% 28% 27% 27%
4Q/11 3Q/12 4Q/12 FY11 FY12
Total Production Volume in %
Ref+LN+Others
Jet
Diesel
Fuel Oil
149 147 146 131 146
36 55 55
31
51
103% 101% 101%
90%
100%
65%
70%
75%
80%
85%
90%
95%
100%
105%
0
50
100
150
200
250
4Q/11 3Q/12 4Q/12 FY11 FY12
Crude CR+Other feed CDU Rate
Total Intake in KBD CDU Rate
CR+Other
feed
Crude
54 mbbl 69 mbbl
Unit in THB bn
2011 2012
Dubai in 4Q/12 started at 109 usd/bbl and ended at 108 usd/bbl
4Q/11 3Q/12 4Q/12 2011 2012 +/-
Dubai crude 106 106 107 106 109 3%
ULG95-Dubai 10 16 14 14 15 7%
Jet-Dubai 18 20 19 19 18 -5%
Diesel-Dubai 17 19 18 18 17 -6%
FO-Dubai -2 -2 -9 -6 -4 -33%
Quarter Year
1.9 1.0
3.4 4.1
6.9
9.6
1.0 1.3 2.3
4.2 4.7
8.8
1Q/12 2Q/12 3Q/12 4Q/12 2011 2012
EBITDA Adjusted EBITDA
4Q/11 3Q/12 4Q/12 2011 2012 +/-
Market P2F 121 243 387 181 257 42%
Hedging Gain/(Loss) 0 0 -5 0 -2 -900%
Stock Gain/(Loss) Net NRV 1 64 -2 35 13 -64%
Accounting P2F 122 307 380 216 268 24%
Quarter Year
21
22% 23% 22% 24% 23%
13% 14% 14% 15% 14%
23% 25% 24% 22% 24%
42% 39% 40% 39% 39%
80%
90% 91% 88% 86%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0%
20%
40%
60%
80%
100%
120%
4Q/11 3Q/12 4Q/12 FY11 FY12
Total Production Volume in % Total intake in %
LN+Others
CR
BZ+CX PX+Xylene
group
Aromatics BU Performance Strong BZ spread and higher discount on condensate contributed to high margins YoY
84% 89% 84% 84% 86%
16% 11% 16% 16%
14%
0%
20%
40%
60%
80%
100%
120%
4Q/11 3Q/12 4Q/12 FY11 FY12
Reformate+
Other feed
Condensate
Unit in THB bn
2011 2012
4Q/11 3Q/12 4Q/12 2011 2012 +/-
Condensate 923 918 925 926 946 2%
PX FECP-Condensate 560 426 604 615 538 -13%
BZ SPOT KR-Condensate 74 259 431 160 261 63%
Naphtha-Condensate -26 -3 19 12 -3 -125%
Quarter Year
1,360 kton
255 kton
5,082 kton
829 kton
Import
39% Import
30%
22
92%
86% 89%
87% 87%
8% 14% 11% 13% 13%
75%
80%
85%
90%
95%
100%
105%
4Q11 3Q12 4Q12 FY11 FY12
Gas NaphthaTotal intake
7.2 7.7 8.3 8.4
29.6 31.6
1Q 2Q 3Q 4Q FY11 FY12
Olefins and Olefins Derivatives Adjusted EBITDA in THB bn
Olefins and Olefins Derivatives BU Performance Better performance YoY thanks to higher gas feed while prices were in mixed performance
Price and Spread in USD/ton
Sales Volume in Kton and Utilization Rates
*External sales
+/-Sale Volume
(K Ton)
Utilization
Rate
Sale Volume
(K Ton)
Utilization
Rate
Sale Volume
(K Ton)
Utilization
Rate
Sale Volume
(K Ton)
Utilization
Rate
Sale Volume
(K Ton)
Utilization
Rate
Sales
Volume
Olefins* 172 77% 188 91% 169 88% 737 80% 748 88% 2%
HDPE 181 85% 198 92% 203 100% 758 95% 778 99% 3%
LLDPE 117 113% 111 113% 117 111% 337 89% 396 100% 18%
LDPE 33 59% 96 113% 63 71% 158 56% 273 88% 72%
MEG 87 78% 91 93% 101 96% 279 65% 350 88% 26%
4Q/11 3Q/12 4Q/12 20122011
759 928 897 3,222 3,574
Unit: USD/Ton 4Q/11 3Q/12 4Q/12 2011 2012 +/-Naphtha 888 915 944 938 943 1%
HDPE 1,329 1,343 1,393 1,373 1,380 1%
HDPE-Naphtha 441 428 449 434 437 1%
LLDPE 1,217 1,341 1,399 1,339 1,354 1%
LLDEP-Naphtha 328 426 455 401 411 2%
LDPE 1,408 1,327 1,369 1,602 1,362 -15%
LDPE-Naphtha 520 412 425 664 419 -37%
MEG 1,362 1,065 1,247 1,314 1,179 -10%
MEG-0.65 Ethylene 672 285 411 542 379 -30%
81%
19%
Phenol Performance Weaker YoY from lower spreads and BPA unplanned shutdown
23
0.2 0.2 0.3 0.2
3.1
1.0
1Q 2Q 3Q 4Q FY11 FY12
Adjusted EBITDA in THB bn
Sales Volume in Kton and Utilization Rates
Phenol and BPA P2F in USD/ton
USD/Ton4Q/2011 3Q/2012 4Q/2012 2011 2012 YoY
Phenol-BZ 303 264 165 613 267 -57%
BPA-Phenol 241 212 189 384 205 -47%
Phenol and BPA Market Spread in USD/ton
P2F = PH + 0.62 AC – 0.872 BZ – 0.468 PY
P2F = BPA - 0.853 PH – 0.275 AC
YoY
4Q/11 3Q/12 4Q/12 2011 2012
Phenol Margin 378 401 366 721 435 -42%
BPA Margin 196 171 167 379 157 -56%
Quarter Year
Sales Portion of all Products in Quantity (%)
21 34 41
133 151
25 33 35
87
110
98%
128% 129%
114% 119%
73%
102%
83% 79% 74%
0%
20%
40%
60%
80%
100%
120%
140%
-
50
100
150
200
250
300
4Q/11 3Q/12 4Q/12 2011 2012
Phenol BPA Phenol U-Rate BPA U-Rate
Export
Domestic
Contract 76%
Spot 24%
Contract 86%
Spot 14%
Profit and Loss Statement
24
THB mn % THB mn % THB mn % THB mn %
1 Sales Revenue 562,811 100 500,305 100 62,506 12 144,595 100
2 Feedstock Cost -470,191 -84 -423,641 -85 -46,550 -11 -117,517 -81
3 Product to Feed Margin 92,620 16 76,664 15 15,956 21 27,078 19
4 Variable Cost -16,525 -3 -10,423 -2 -6,102 -59 -4,782 -3
5 Fixed Cost -15,871 -3 -12,256 -2 -3,615 -29 -5,064 -4
6 Stock Gain/(Loss) & NRV 175 0 6,778 1 -6,603 -97 -323 -0
7 Gain/(Loss) Hedging Commodity 659 0 -1,275 -0 1,934 152 292 0
8 Other Income 5,552 1 4,294 1 1,258 29 2,205 2
9 SG&A -10,731 -2 -9,359 -2 -1,372 -15 -3,126 -2
10 EBITDA 55,879 10 54,423 11 1,456 3 16,281 11
11 Depreciation & Amortization -15,358 -3 -13,608 -3 -1,750 -13 -4,152 -3
12 EBIT 40,521 7 40,815 8 -294 -1 12,129 8
13 Financing Expenses (Net Interest Earned) -5,523 -1 -5,576 -1 53 1 -1,387 -1
14 FX Gain/(Loss) 911 0 -724 -0 1,635 226 409 0
15 Shares of gain/(loss) from investments -44 -0 161 0 -205 -127 -127 -0
16 Corporate Income Tax -1,416 -0 -3,102 -1 1,686 54 -694 -0
17 Net Profit After Income Tax 34,449 6 31,574 6 2,875 9 10,329 7
18 Portion of Net Profit: 0%
19 Shareholders 34,001 6 30,033 6 3,968 13 10,389 7%
20 Minorities 448 0 1,541 0 -1,093 -71 -59 0%
21 Adjusted EBITDA 55,045 0 48,920 10 6,125 13 16,312 11%
FY 2012 FY2011 YoY 4Q/2012
FCF for Inv. 7,428
FCF for Inv. 9,908
FCF for Inv. 5,992
FCF for Inv. 24,346 2,003
8,146
26,795
30,532
9,431
18,054
32,787
54,878
-
10,000
20,000
30,000
40,000
50,000
60,000
1Q/12 2Q/12 3Q/12 4Q/12
FCF for Inv.Debt Service and DividendCash from Operation
34.6
240.5
238.0
100.8 136.8
60.0 61.2
Strong Financial Position
25
• Free Cash Flow for Investment
• Key Financial Ratios • Dividend – Solid Payout Ratio
As of Dec 31, 2011 As of Dec 31, 2012
THB 436 Billion THB 373 Billion
Cash
CA
PPE
Non CA
Share
holders’
Equity
Loan
Liab.
• Balance Sheet
Dec 31, 11 Dec 31, 12 ROA 8.05% 7.80% ROE 14.41% 14.28% Net IBD / Equity 0.47 0.32 Net IBD / EBITDA 1.79 1.38
FY11 FY12
EPS (Baht/Share) 6.66 7.54
Dividend (Baht/Share) 2.98 3.40
Payout Ratio (%) 45% 45%
MTHB
32.4
235.3
208.5
82.6
120.2
22.6 44.3
2%
44% 54%
11.6 11.9
7.6 9.5
19.2
12.7
7.7
11.7
0.5
30.5
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
PTTGC PPCL Others
Diversified Debt Exposure and Repayment Schedule
26
Cost of long term debts ~ 5.0% (Include W/H Tax)
Average loan life after refinancing - 5.4 Years
Debt Profile as at Dec 31, 2012
Maturity of Financial Debt as at Dec 31, 2012
Treasury policy Net IBD to Equity ratio of ≤ 0.7x
Net IBD to EBITDA ratio of ≤ 2.4x
Debenture
ST Loan
LT Loan
63%
37%
THB
USD & Foreign
62%
38% Floated
Fixed
Agenda
FY12 Highlights
Strategy and Execution
FY12 Operating Results
Market Outlook
27
Key Trends for Petrochemical Industry in 2013
Oil prices slightly sees oversupply Global oil demand 90.5 MBD (+0.865 MBD) with high growth from Asia
Global oil supply 90.6 MBD from Non OPEC (US, UK, Brazil)
PX and MEG market strongly supported by outpacing derivatives demand of new PTA and polyester capacity, mainly from China PX demand growth of 10% as against supply growth of 9.8%
MEG demand growth of 7% against 5% supply growth
BZ supply remains pressured by feedstock shortage Demand growth 3.2% outpacing supply growth of 2.6%
Pygas and reformate are the main source of supply for BZ
Olefins market will be driven by derivatives demand mainly from PE Ethylene demand growth of 4% higher than supply growth of 3%
Propylene market slightly oversupply from new on-purpose units startup
PE market expected to recover with average global operating rates of 85% (from 84% in previous year) Total PE demand growth 3.8 Mton
Total PE new capacity 3.5 Mton from ME and China
28
PTTGC’s Way Forward
For FY13, PTTGC aims to exceed sales volume as achieved
in 2012, with higher gas feed flow from GSP
Continues to strive for strong profitable growth via
excellence programs and synergy projects, remains
committed to creating long-term and sustainable value
through HVS and green pathways
CAGR ~2-3% towards 2017 with expected revenue increase to THB 620-650 bn
CAGR ~5-7% towards 2022 with expected revenue increase to THB 800-900 bn
29
30
Market Outlook
31
85
86
87
88
89
90
91
92
93
94
95
-1,000
-500
0
500
1,000
1,500
2,000
2,500
2010 2011 2012 2013 2014 2015 2016
kbd Expected crude distillation expansion Africa
Middle East
Asia
FSU East
Europe
C&S America
North America
Net Addition
World Demand
Refining Capacity Additions 2013-2016
32
2010 2011 2012 2013 2014 2015 2016
North America -359 75 19 0 70 50 20
C&S America 70 0 -225 0 150 230 250
Europe -402 -45 -586 -170 40 60 214
FSU East 210 30 332 115 50 50 148
Asia 853 841 1,315 1,121 742 521 965
Middle East 20 261 0 145 817 510 146
Africa 0 20 93 36 48 0 0
World 393 1,182 948 1,247 1917.10 1421.00 1743.00
Net Addition 393 1,182 948 1,247 1,917 1,421 1,743
World Demand 88.33 89.15 89.77 90.88 91.94 92.89 93.75
MBD
Source: JBC Oct 2012 and PTTGC
398 408
287 300 349
414 357 335
933 872 843 842
1,331 1,280
1,130 1,142
1,282 1,287 1,200 1,177
0
200
400
600
800
1,000
1,200
1,400
1,600
1Q/13F 2Q/13F 3Q/13F 4Q/13F
Olefins Improved derivatives demand will affect Olefins market
USD/Ton Short-term Price Forecast
Short-Term
• Olefins prices were expected to remain high in 1H13
due to improving derivatives demand mainly from PE,
PP and MEG market - in line with the global
economic recovery
• However the market will be pressured from
1) Additional new supply in Middle East and Asia
(especially in China and Singapore) in the second
half of the year
2) Lighter turnaround plan at Asia cracker in 2013
Long-term Supply/Demand
33
Additional (2012-2017) (Unit : MMT)
Supply Demand 36.13 32.67
America16%
Middle East20%
Europe2%
China40%
Other Asia22%
Source: CMAI January 2013
-2,000
0
2,000
4,000
6,000
8,000
10,000
12,000
2012 2013 2014 2015 2016 2017
America Europe Middle East China Other Asia Additional demand
Unit : KMT
Saudi Polymers Saudi 1,200 KMT Q3-11 to Q3-12
Reliance India 1,350 KMT Q1-16 to Q3-16
SINOPEC Wuhan CH 800 KMT Q1-11 to Q3-13
ExxonMobil SG 1,000 KMT Q3-11 to Q2-13
Shanghai PC China 600 KMT Q3-12 to Q1-14
Daqing PC China 600 KMT Q1-11 to Q3-12
Fushun PC China 800 KMT Q1-10 to Q3-12
Sichuan PC China 1,000 KMT Q3-11 to Q4-13
Ilam Iran 458 KMT Q1-15 to Q1-16
Kavyan PC Iran 1,000 KMT Q1-13 to Q3-15
CNOOC & Shell China 1,000 KMT Q1-16 to Q1-17
-5000
5001,0001,5002,0002,5003,000
2012 2013 2014 2015 2016 2017
America Europe Middle East China Other Asia Additional demand
519 519 456
525 507 449 441
497 489 496 439
485
933 872 843 842
1,452 1,392 1,298
1,367 1,440 1,377
1,283 1,339
1,422 1,368 1,281 1,327
0
200
400
600
800
1,000
1,200
1,400
1,600
1Q/13F 2Q/13F 3Q/13F 4Q/13F
Short-term Price Forecast USD/Ton Short-Term • PE prices will show the sign of recovery
according to the global economic
• However, new PE supply in Asia (Mainly
from China) and strong buying resistance
from end-use producers due to squeezed
margin will weigh on PE markets especially
in the second half of the year
Polyethylene The market will be recovered in the short term
HDPE Long-term Supply/Demand
34
Additional (2012-2017) (Unit : MMT)
Supply Demand 11.81 11.39
America19%
Middle East24%
Europe1%
China42%
Other Asia14%
Source: CMAI January 2013
Saudi Polymers Saudi 550 KMT Q3-11 to Q3-12
Ilam Iran 300 KMT Q1-14 to Q1-15 SINOPEC Wuhan CH
300 KMT Q1-11 to Q3-13
Saudi Polymers Saudi 550 KMT Q3-11 to Q1-13
BPCL India 110 KMT Q3-13 to Q4-14
Daqing PC China 400 KMT Q1-11 to Q3-12
OPAL India 350 KMT Q1-13 to Q3-14
Fushun PC China 575 KMT Q1-10 to Q3-12
Sichuan PC China 300 KMT Q3-11 to Q4-13
Sinopec Yanchang China 250 KMT Q3-14 to Q1-16
Unit : KMT
LLDPE & LDPE
35 Source: CMAI January 2013
LDPE Long-term Supply/Demand
LLDPE Long-term Supply/Demand
Additional (2012-2017) (Unit : MMT)
Supply Demand 10.81 8.27
Additional (2012-2017) (Unit : MMT)
Supply Demand 5.03 3.38
America19%
Middle East30%Europe
0%
China40%
Other Asia33%
America12%
Middle East30%Europe
13%
China36%
Other Asia8%
-500
0
500
1,000
1,500
2,000
2,500
2012 2013 2014 2015 2016 2017
America Europe Middle East China Other Asia Additional demand
Unit : KMT
SINOPEC Wuhan China 300 KMT Q1-11 to Q3-13
ExxonMobil Sing. 1,300 KMT Q1-11 to Q4-12
Fushun PC China 225 KMT Q2-10 to Q3-12
Sichuan PC China 300 KMT Q3-12 to Q4-13
OPAL India 350 KMT Q1-13 to Q3-14
Yulin Energy China 300 KMT Q2-13 to Q1-14
CNOOC & Shell China 300 KMT Q1-16 to Q1-17
-500
0
500
1,000
1,500
2,000
2012 2013 2014 2015 2016 2017
America Europe Middle East China Other Asia Additional demand
Unit : KMT
QAPCO Qatar 300 KTA Q1-12 to Q3-12
Borouge UAE. 350 KTA Q1-14 to Q3-14
Reliance India 400 KTA Q1-15 to Q3-16
Short-term Price Forecast USD/Ton Short-Term
• Buying sentiment is expected to be driven up
from stronger demand in the downstream
textiles and fabrics sectors in China due to
more new Polyester supply will start up in
year 2013
• However, more additional new MEG supply
in the second half of the year will affect the
market
432 501 542 548
933 872 843 842
1,331 1,280
1,130 1,142
1,297 1,333
1,277 1,290
0
200
400
600
800
1,000
1,200
1,400
1,600
1Q/13F 2Q/13F 3Q/13F 4Q/12F
MEG The market will be robust due to strong derivative demand
MEG Long-term Supply/Demand
Additional (2012-2017) (Unit : MMT)
Supply Demand 13.61 9.03
America7% Europe
8%Middle
East7%
India6%
China65%
Other Asia7%
36 Source: CMAI January 2013
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2012 2013 2014 2015 2016 2017
America Europe India Middle East
China Other Asia Additional demand
PetroChina China 380 KTA Q1-12 to postpone
Tongliao Jinmei China 400 KTA Q1-13 to Q3-13
Tongliao Jinmei China 400 KTA Q1-13 to Q4-12
Qianxi Coal Chem China 400 KTA Q3-13 to Q1-14
Heyuan Chem China 500 KTA Q4-12 to Q2-13
Unit : KMT
Short-term Price Forecast
Short-Term • PX demand in year 2013 will be supported
from new PTA plants in Asia (especially in
China) will start up in and high
manufacturing season in textile and fabric
sectors in China
• However, additional new supply in Asia and
squeezed PTA margins and high inventory
levels among downstream Polyester market
will affect the PX market
USD/Ton
716 748 714 708
933 872 843 842
1,648 1,620 1,557 1,550
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1Q/13F 2Q/13F 3Q/13F 4Q/13F
Paraxylene Tight supply will affect PX market
PX Long-term Supply/Demand
37
Additional (2012-2017) (Unit : MMT)
Supply Demand 21.43 13.93
Source: CMAI January 2013
America2% Europe
4%
Middle East30%
India15%
China17%
Other Asia32%
0
1,000
2,000
3,000
4,000
5,000
6,000
2012 2013 2014 2015 2016 2017
America Europe India Middle East China Other Asia Additional demand
PetroRabigh Saudi. 1,400 KTA Q3-15 to Q3-16
Sinopec Hainan Ref. China 600 KTA Q1-15 to Q4-14
Unit : KMT
Tenglong Aromatics1 China 800 KTA Q2-12 to Q3-12
Tenglong Aromatics2 China 800 KTA Q3-12 to Q2-13
Short-term Price Forecast USD/Ton
Short-Term
• Supply continue to be short due to many
refineries and Aromatics plants in Asia will
shutdown for maintenance
• In addition, Benzene market will be
depend on volatile crude and feedstock
prices and derivatives demand 505 553 580 549
933 872 843 842
1,438 1,425 1,423 1,391
0
200
400
600
800
1,000
1,200
1,400
1,600
1Q/13F 2Q/13F 3Q/13F 4Q/13F
Benzene the market will still be driven by the main products
Additional (2012-2017) (Unit : MMT)
Supply Demand 8.61 8.28
BZ Long-term Supply/Demand
America
1%
Middle East6% Europe
2%
China
35%
Other Asia55%
38 Source: CMAI January 2013
-500
0
500
1,000
1,500
2,000
2,500
2012 2013 2014 2015 2016 2017
America Europe Middle East China Other Asia Additional demand
Daqing PC China 150 KTA Q1-13 to Q3-12
Anqing PC China 54 KTA Q3-12 to Q1-13
Samsung Total PC S. Korea 422 KTA Q4-14 to Q1-15
Nghi Son Vietnam 246 KTA Q1-15 to Q1-16
ExxonMobil Sing. 340 KTA Q1-13 to Q2-13 Unit : KMT
Short-term Price Forecast USD/Ton
Short-Term
• Phenol market would continue to face
rising cost and weak supply/demand
balances
• Additionally, Phenol market will be
pressured from new additional supply in
Asia, mainly from China and S. Korea in
2013 219 188 189
316
1,438 1,425 1,423 1,377
1,484 1,442 1,441 1,527
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1Q/13F 2Q/13F 3Q/13F 4Q/13F
Phenol Will be pressured from high feedstock prices and new additional supply
Additional (2012-2017) (Unit : MMT)
Supply Demand 3.14 1.91
Phenol Long-term Supply/Demand
America
1%Europe
2%
China68%
Other
Asia55%
39 Source: CMAI January 2013
-500
0
500
1,000
1,500
2012 2013 2014 2015 2016 2017
America Europe Middle East China Other Asia Additional demand
Unit : KMT
Lihuayi Group Taiwan 217 KTA Q1-13 to Q4-12
SSMC China 300 KTA Q2-13 to Q4-13
Changchun PC China 400 KTA Q3-13 to Q4-13
INEOS/Yangzi PC China 400 KTA Q3-14 to Q1-15
CEPSA Quimica China 250 KTA Q3-14 to Q1-15