Long Son Petrochemicals to Begin Commercial Production in Vietnam

SCG Chemicals-owned Long Son Petrochemicals will begin commercial production at its petrochemical facility in southern Vietnam in September, according to the CEO of Thai firm Siam Cement Group on Monday.

Siam Cement Group's Roongrote Rangsiyopash stated on the sidelines of an industry event that the company is in the process of testing each working unit at the complex.

SCG Chemicals is owned by Siam Cement Group.

Rangsiyopash expects commercial operations to begin in September after testing is finished in July or August.

According to him, the $5.4 billion plant in Ba Ria Vung Tau province will produce polyethylene, polypropylene, and basic chemicals.

"The total demand for the country is around 3.3 million tonnes of both polyethylene and polypropylene combined, our complex (production capacity) is about 1.3-1.5 million tonnes. So, I would assume that the majority of the products that will be consumed locally," he added.

He also said for the first year, some of the products will be exported to countries in Southeast Asia like Thailand and Indonesia to balance the supply and demand until Vietnam can fully absorb the supply.

Petrochemical demand has been struggling globally recently amid economic headwinds and poor demand in China. Refiners' profit margins on processing naphtha to make ethylene turned negative this month for the first time since October.

He said there is no recovery in sight in the second half of the year, as China consumption remains poor despite their reopening.

Because of slowdown in demand and lower chemical product price, 2023 revenue growth will be flat from last year, even with the increase in capacities from the LSP complex startup, he further said.