The Long Son petrochemical project with a total investment of 5 billion USD had to stop commercial operations after a short time in operation. The investor has spoken out about the possibility of resuming operations of this plant.
Mr. Kulachet Dharachandra - General Director of Long Son Petrochemical Company Limited - said that Long Son Petrochemical Complex will be renovated to reduce production costs - Photo: DONG HA
On February 13, Mr. Kulachet Dharachandra - General Director of Long Son Petrochemical Company Limited (LSP), a member of SCG Group (Thailand) - spoke out about the reason for suspending commercial operations of the 5 billion USD Long Son petrochemical complex at the end of 2024 and the roadmap for re-operation of this project.
Mr. Kulachet Dharachandra said that Long Son petrochemical plant had to temporarily stop commercial operations after a short time of operation due to some unforeseen problems arising in the market.
The global economic recession has affected the demand for plastic resins, which are the main products of the petrochemical industry. Currently, the price of plastic resins has dropped sharply, 1,000 USD/ton lower than before, while the cost of input materials has increased with the price of crude oil, causing profits to decrease.
According to him, the difference between the selling price of plastic pellets and the cost of input materials has decreased sharply, down to about 300 USD/ton, much lower than the peak period (about 700 USD/ton), and at times this difference was even lower than the break-even point.
In addition, geopolitical tensions and trade wars also have a strong impact on the petrochemical industry.
"The regional and global petrochemical industry is currently in the 'winter' phase, which is the most difficult phase of the industry's downturn cycle with low prices and record profits. Therefore, LSP has decided to temporarily suspend commercial operations to preserve assets, ensure liquidity and prepare for restart when the market recovers," said Mr. Kulachet Dharachandra.
Long Son Petrochemical Complex, with a total investment capital of up to 5 billion USD, has had to temporarily suspend commercial operations - Photo: SCG
The investor representative said that the factory is always ready to resume operations when market demand increases again, profit margins improve and crude oil prices cool down thanks to the policies of the administration of US President Donald Trump.
The “game changer” for the $5 billion petrochemical plant, Kulachet Dharachandra said, is increased feedstock flexibility. The plant is designed to use up to 70% gas as its feedstock.
Therefore, LSP will convert input materials, increase the use of imported ethane gas from the US at a lower price than naphtha and propane, reduce production costs as well as reduce carbon emissions.
To renovate LSP, Mr. Kulachet Dharachandra said that this enterprise will invest an additional 500 million USD to build a specialized tank and renovate the factory with a construction time of 2.5 years, expected to be completed in 2027.
The Long Son Petrochemical Complex is invested by SCG Group with a total investment of 5 billion USD. Of which, domestic spending accounts for 33%, equivalent to 1.5 billion USD. From 2018 to 2024, this factory has paid 163 million USD in taxes and contributed 1.5 billion USD in revenue in 2024. The factory currently has 1,000 employees, of which 88% are Vietnamese.
Source: https://tuoitre.vn/chu-dau-tu-hoa-dau-long-son-5-ti-usd-tiet-lo-ke-hoach-tai-van-hanh-20250213231931769.htm
Comment (0)