Thailand's SCG Group has just announced its business results for the third quarter and the first nine months of 2024. Notably, the Group said it has temporarily suspended operations at the Long Son Petrochemical Complex (Ba Ria - Vung Tau) to manage total operating costs and will restart when market conditions are more favorable.

Long Son flower box.jpg
Long Son Petrochemical Complex has temporarily suspended commercial operations. Photo: LSP

Long Son Petrochemical Project (LSP) - the first integrated petrochemical complex in Vietnam, officially went into commercial operation on September 30, achieving an output of 74,000 tons of plastic pellets in the testing phase.

However, in the third quarter of 2024, excluding the non-recurring financial income from the termination of the interest rate swap (IRS) at LSP worth VND 1.56 trillion (equivalent to USD 61.5 million), the petrochemical group (SCG Chemicals - SCGC) recorded a net loss of about VND 2.63 trillion (equivalent to USD 105 million), due to the impact of exchange rates from the appreciation of the Baht and the decrease in equity income from associates.

LSP alone recorded a net loss in the third quarter of 2024 (excluding IRS) of about VND 1.56 trillion (equivalent to USD 62.9 million).

In the first nine months of 2024, LSP recorded fixed costs for downstream production operations, mainly depreciation and interest.

Fixed costs from upstream operations will be recognized in the final quarter of this year once commercial operations stabilize.

However, in the face of a global petrochemical industry slowdown with oversupply and declining demand for petrochemical products, LSP has made the decision to suspend commercial operations and will restart production when the market recovers.

"This is a strategic decision, demonstrating the project's ability to flexibly adapt to changing and challenging market conditions, and is also an opportunity for LSP to prepare to seize opportunities when the market recovers," SCG said.

In addition, SCGC is implementing an investment project to improve the production process at the Long Son Petrochemical Complex (LSP), aiming to enhance long-term competitiveness through increased operational flexibility.

With an investment budget of USD 700 million, mainly for the construction of ethane gas storage tanks and related infrastructure, the project is expected to be completed by the end of 2027. Once officially put into operation, LSP will produce olefins and polyolefins to meet the growing demand of the consumer goods industry in Vietnam.

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