Investments: PTTGC/SCG agree to jv terms with saving benefits of US$200 mn; BPCL sets up subsidiary for greenfield petchem complex in India

Thailand-based chemical firms SCG Chemicals (SCGC) and PTT Global Chemical (PTTGC) have agreed the principal terms of a proposed joint venture combining their Thai olefins and polyolefins businesses,

The proposed combination is expected to generate recurring annual benefits of approximately US$150-200 million, with completion targeted for the second half of 2027.

Thammasak Sethaudom, President/CEO of The Siam Cement Public Company Limited (SCC), reported the progress to the Stock Exchange of Thailand. SCGC, SCC’s chemicals subsidiary, and PTTGC have reached agreement on the substantive terms and main framework for establishing the strategic joint venture.

SCC described the proposed combination as a means of building a regional petrochemical leader and strengthening Thailand’s competitiveness in global markets.

PTTGC would become the majority shareholder with a 56% interest, while SCGC would retain a significant holding of 44%.

Following completion, SCC would account for its interest in the combined business as an associate using the equity method, reflecting the inclusion of SCGC’s Thai olefins and polyolefins assets in the venture.

SCC expects the arrangement to increase its share of profits and support future earnings before interest, tax, depreciation and amortisation, or EBITDA.

The expected annual benefits would come from strengthening the downstream business, improving feedstock and supply-chain management, and coordinating operations and maintenance more efficiently.

PTTGC would contribute its upstream production capabilities, access to competitively priced feedstock through refinery integration, and integrated infrastructure.

SCGC would bring downstream manufacturing expertise, a diverse product portfolio, proprietary technology and capabilities in high-value-added products.

The proposed integration is intended to connect those complementary strengths throughout the production chain and improve the competitiveness of the combined operations.

The proposed asset package covers production facilities and investments held by both companies in Thailand.

SCGC has olefins plants operated by Rayong Olefins (ROC) and Map Ta Phut Olefins (MOC), PE facilities under Thai Polyethylene (TPE), and investment stakes in Siam Polyethylene (SPE), Siam Synthetic Latex (SSLC), Bangkok Synthetics (BST) and Thai MMA (TMMA).

PTTGC has five olefins plants, PE production facilities and its investment in HMC Polymers (HMC).

The transaction timetable provides for an extraordinary general meeting on 3 December 2026, to consider approval, followed by regulatory applications in the first half of 2027.

The proposed venture’s dividend policy calls for distributions of at least 60% of consolidated net profit after tax and statutory reserves. Additional dividends may be considered from remaining profits after allowing for necessary investment and working capital.

SCC will continue pursuing its wider growth strategy in Southeast Asia alongside the petrochemical transaction. Priorities include increasing the use of ethane feedstock at Long Son Petrochemicals (LSP) in Vietnam, low-carbon cement, packaging and the Cleanergy business.

SCGC also intends to maintain its regional leadership in vinyls and recycling.

In other news, India’s Bharat Petroleum Corp. Ltd. (BPCL) says it has approved setting up a wholly owned subsidiary in India as a dedicated project company for its proposed greenfield refinery and petrochemical complex and associated facilities at Ramayapatnam, Andhra Pradesh. The move is subject to government, statutory and regulatory approvals.

BPCL said the subsidiary will provide a dedicated legal and governance structure for project activities, with an initial authorised share capital of up to Rs 4,900 crore. The new entity is intended to support due diligence, engagement with lenders and potential partners, and the development of an optimal financing and partnership structure.

Detailed feasibility reports for the project are being finalised.

BPCL said the financial investment decision and financial commitments will be considered separately by the competent authorities at the appropriate stage, and that further details of the subsidiary will be disclosed later.

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