PetChem looks to solution-driven products for next stage of growth

The firm is looking to partner technology providers from North-East Asia, says expert


PETRONAS Chemicals Group Bhd (PetChem) is striving to shift from a pure-play commodity player, to a solution provider in the petrochemical industry by teaming up with technology partners in Asia.

Its head of strategic planning and ventures Akbar Md Thayoob said PetChem — which currently manufactures and retails petrochemical products, while providing relevant services — needs to move into solution-driven projects to tap into specialty chemicals and other niche market segments.

“Moving forward, we are not just going to be a service provider, but we want to graduate to be a solution provider where we sit down with our customers, understand their pinpoints and co-create solutions,” he told members of the press in Kuala Lumpur on Tuesday.

“In this way, we will forge a more lasting relationship (with customers) rather than just selling and providing services.”

He said PetChem is also looking to partner technology providers from North-East Asia, where most of the support for technology is coming from, but will also explore collaborations with China and Asean countries where technology advancement is growing.

The downstream manufacturing arm of Petroliam Nasional Bhd (Petronas) currently operates at a nameplate capacity of 12.7 million tonnes per annum with its key markets in the olefins and derivatives, and fertilisers and methanol segments.

Akbar was speaking at the 39th Asia Petrochemical Industry Conference which emphasised the theme of collaboration for greater value creation for petrochemical players.

Following the conference which ended on Tuesday, Akbar said Petronas is aiming to enter into preliminary agreements with technology providers over the coming days to move further into the specialty chemicals segment which is the next stage of growth for the industry.

He said this requires both parties bringing their respective value propositions to the table.

“What we bring is access to market, operational excellence and understanding of the business.

“The other partner will bring in technology and market reach — and together we will be able to create better value (for consumers),” he said.

Akbar represented the Malaysian Petrochemicals Association as its president during the two-day conference, which also saw Petronas president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin and Ministry of International Trade and Industry (MITI) Deputy Minister Dr Ong Kian Ming in attendance.

Wan Zulkiflee said the US$27 billion (RM110.97 billion) Pengerang Integrated Complex (PIC) in Johor will help the national energy company expand its presence in the specialty chemicals game.

The downstream facility is the largest of its kind undertaken by Petronas and will bring on stream an additional 3.3 million tonnes of commodity and differentiated petrochemical products annually when fully operational at end-2019.

With the PIC and other facilities such as Lotte Chemical Titan Holding Bhd’s petrochemical plant in Pasir Gudang, Johor, Malaysia’s pet rochemical product ion is expected to increase from 16.3 million tonnes per annum to 23.1 million tonnes per annum in 2020.

MITI secretary general Datuk Isham Ishak said the Pengerang project will be a real “game changer” for Malaysia’s petrochemical industry, since it will be a magnet for investors to invest in and use the complex as the supply chain to produce downstream products.

“Once the PIC is in full production, we expect to see more companies venturing into or having interest to come into Malaysia, because they can see for the first time the facilities are open and ready,” he said in a press conference during the event.

“They will also be able to measure the capacity (of the PIC) to provide them the necessary inputs to get into the development of downstream products.”

He said Malaysia has already recorded RM15.3 billion in approved petrochemical investments from four companies over the first four months of 2018. In 2017, a total of 10 investments amounting to RM26 billion were approved.

On a separate note, he said MITI will launch its National Industry 4.0 Policy Framework by the second week of September this year.

“This blueprint hopes to propel the manufacturing sector in embracing new technologies including artificial intelligence, cyber security, robotics and big data management,” he said.

He added that the framework will also include an ecosystem for small and medium enterprises to substantially increase the sector’s current productivity level.