On November 1, SCG Group announced its business results for the third quarter and the first nine months of 2024, along with short-term strategies (including reducing organizational costs, suspending unprofitable business activities) and activating long-term strategies (such as investing in ethane gas in a petrochemical project in Vietnam).
In particular, SCG is enhancing flexibility in petrochemical production activities in Vietnam, through additional investment to implement the project to increase ethane gas feedstock, helping to save input material costs.
This is a move to be ready to respond and adjust SCG's strategy appropriately, in the context of global economic fluctuations, escalating conflicts, the recession of the petrochemical industry, and fluctuations in the Thai baht exchange rate.
Regarding the petrochemical complex project worth over 5 billion USD in Vung Tau City (Ba Ria - Vung Tau province) of Long Son Petrochemical Company Limited (LSP - a member company of SCG Chemicals, a petrochemical industry under SCG Group), the complex has temporarily suspended commercial operations to manage total business costs, with plans to restart when market conditions are more favorable.
According to LSP, the suspension of commercial operations is aimed at managing overall business costs and implementing a plan to re-evaluate operating procedures while waiting for positive signals from the market, similar to many petrochemical complexes in Asia.
In addition, LSP believes that it is necessary to optimize competitiveness through adjustments and business orientation in accordance with fluctuations in input material prices, product demand and the global economic situation. In order to respond to challenges in the petrochemical industry, such as increased production capacity of many suppliers and reduced demand for petrochemical products.
Currently, the group is working to enhance its long-term competitive advantage with a project to invest in and upgrade a plant using imported ethane gas; with a total investment capital of about VND17.5 trillion (US$700 million), mainly allocated to the construction of tanks and support facilities for receiving raw materials, expected to be completed by the end of 2027.
This will help reduce production costs (because ethane is a competitively priced raw material), while increasing the flexibility of raw material selection during the operating process.
