In its 25th year of local investment, SCG goes in big
In its 25th year of local investment, SCG goes in big
SCG is developing a firmer foothold in Vietnam with the recent resumption of its Long Son Petrochemicals complex, first licensed in 2008.
The group has recently signed a memorandum of understanding (MoU) with Vietnam National Oil and Gas Group (PetroVietnam) to push forward a $5.4 billion project - Long Son Petrochemicals (LSP) in the southern province of Ba Ria-Vung Tau. Positioned as Vietnam’s first petrochemical complex, LSP will accommodate a flexible feedstock with olefin production capacity of 1.6 million tonnes per year.
The complex is equipped with proven processes from leading international licensors, while its business operations strictly follow international safety standards and are environmentally-friendly. LSP is scheduled to be completed and begin commercial operations in 2022.
“The petrochemicals complex in Vietnam will be among the largest investments for Siam Cement Group (SCG) in Southeast Asia,” said Roongrote Rangsiyopash, president and CEO of SCG, at a signing ceremony in Thailand with PetroVietnam on their MoU in August.
The ceremony was presided over by Vietnam’s Prime Minister Nguyen Xuan Phuc and Thai Prime Minister General Prayut Chan-o-cha. The project marks a high point in the relations of two of the biggest private investors in ASEAN – SCG holds 71 per cent of the project’s stake while PetroVietnam has a 29 per cent share.
According to Rangsiyopash, the complex will not only provide materials for domestic industries but also help reduce reliance on imports. LSP will set a foundation for Vietnam’s petrochemical and supporting industries, pushing forward the development of local industries in the Southeast Asian region.
Besides petrochemicals, other related industries such as rubber production and constructions could also develop from this project in the future. To facilitate this goal, the MoU is aimed to confirm the SCG PetroVietnam co-operation as a partnership for LSP investment.
Meanwhile, SCG Chemicals and PetroVietnam’s subsidiaries also inked an MoU to explore new collaboration opportunities in the petrochemical business.
Rangsiyopash noted that the petrochemical complex faces some issues, such as the withdrawal of its former Qatari investors due to a drop in oil prices. However, SCG is determined to pursue the project, and has prepared capital and technology to move forward.
The investment is said to represent SCG’s efforts to contribute to Vietnam as a good corporate citizen. LSP intends to not only produce important supply for the manufacturing industry, but also support Vietnam’s industry and economic development.
This is in line with the national development plan, which the government has foreseen high potential growth for over the past few years.
LSP is being designed to fit in a harmonious way with its community and the environment. Thus, the business will co-exist and sustainably grow in Vietnam like SCG’s previous investments in other businesses. The opening of the facility is expected to create employment opportunities for Vietnamese as well as play a supportive role in the ASEAN ecosystem.
As part of SCG’s plan to raise investment in Vietnam, LSP is strongly supported by the governments of both Thailand and Vietnam.
Vietnam remains one of SCG’s key markets after 25 years of local involvement. The group has developed a thriving business across three core sectors nationwide: cement and building materials, chemicals, and packaging industries. SCG has a total of 21 companies across the country, driven by about 8,300 employees.
In the second quarter of 2017, SCG’s domestic sales revenue amounted to VND6.613 trillion ($289 million), which includes sales from both operations in the country and imports from its Thai operations. This represents an increase of 17 per cent year-on-year, mainly from its packaging business.
In the first half of 2017, SCG’s Vietnamese market reported revenue from sales of VND12.3 trillion ($532 million), which is a 17 per cent increase year-on-year.
With its commitment for long-term investment in Vietnam, SCG is also active in many corporate social responsibility projects focusing on human development.
Some notable projects include the SCG “Sharing the Dream” scholarship programme, which has benefited almost 4,000 Vietnamese students over the past 10 years; the SCG “Sharing the Dream” playground at Hoang Van Thu park in Ho Chi Minh City; and the SCG International Internship programme for university graduates.
