By AFIQ AZIZ / Pic By HUSSEIN SHAHRUDDIN
Petronas Chemicals Group Bhd (PetChem) is expected to maintain its production utilisation rate this year, similar to the 91% it achieved in 2017.
MD and CEO Datuk Sazali Hamzah said the result is due to its facilities statutory turnaround processes which prevent the group’s revenue and production from increasing.
“Despite the heavy turnaround at our five facilities last year, we sustained our plant utilisation rate just above the world-class standard, as a result of its rigorous operational practice and feedstock management,” he told reporters at the group’s AGM in Kuala Lumpur yesterday.
The minimum rate for the world-standard plant utilisation is 85%.
Despite the same utilisation rate to be recorded, the group hopes for more complex turnaround processes from now until 2019.
In 2015, PetChem’s plant utilisation rate stood at 85%, which increased to 96% in 2016 and in 2017 it dipped to 91%.
Its production volume increased from 8.1 million metric tonnes (MT) in 2015 to 9.2 million MT, and finally to 10.1 million MT last year.
Sazali said the company had also achieved product realisation from Petronas Chemicals Fertiliser Sabah Sdn Bhd, which was previously known as SAMUR, that contributed 10% to the production utilisation between 2016 and 2017.
According to him, PetChem has also registered a strong financial performance last year, where it saw 26% of its revenue rising, reaching RM17.4 billion compared to RM13.7 billion in 2016.
The company’s profit after tax for the year also grew by 37% to RM4.4 billion compared to RM3.2 billion in the previous year.
PetChem’s earnings before interest, taxes, depreciation and amortisation also increased by 25% to RM6.6 billion last year, compared to RM5.3 billion in 2016, while its sales volume increased from 7.3 million MT in 2016 to 8.1 million MT in 2017.
Chairman Datuk Md Arif Mahmood (picture) said for the completion of its petrochemical project in Pengerang Integrated Complex (PIC), the group has allocated a capital expenditure (capex) of RM4.3 billion.
He said the budget will be spent on the petrochemical project, which is scheduled to start operations in 2019.
The company has also allocated an additional RM600 million in capex for operational purposes, such as maintenance and statutory turnaround at its facilities.
“We will be doing major maintenance during the turnaround, however, we also need to do routine maintenance which costs about RM600 million, to ensure the plants remain operational,” Md Arif said, adding that the company presently runs 18 plants in the country.
The PIC project is expected to broaden its current product portfolio, while at the same time expands PetChem existing production capacity.