GC and SCGC Merge Olefins Units Targeting Global Top 10

PTT Global Chemical (GC) and SCG Chemicals (SCGC) have announced plans to merge their olefins and polyolefins businesses in Thailand, establishing a joint venture with a combined olefins production capacity of approximately 7.1 million tons per year. GC Chief Executive Officer Naranong Jiwakarn said the two companies expect to generate $150-200 million in annual synergies from the combined operations, with full benefits realized within about three years. The venture has the potential to become one of the world's top 10 polyolefins producers by capacity and aims to elevate Thailand as ASEAN's petrochemical center.

The integration leverages both companies' production bases, feedstock flexibility, technology, innovation, high-value products, and market networks to improve production efficiency, reduce costs, strengthen financial resilience, and withstand global petrochemical oversupply challenges. The partnership will build upon Map Ta Phut, Thailand's key petrochemical industrial estate, transforming it into an ASEAN production hub by linking manufacturing capabilities with both firms' R&D to create downstream products and solutions that support Thai entrepreneurs, especially SMEs, in adding value and expanding domestic and export market opportunities.

Since both companies' production facilities are located near each other in Map Ta Phut, Rayong, they can jointly manage feedstock and production processes while sharing infrastructure such as feedstock pipelines, utilities, and production support systems for maximum efficiency, along with exchanging knowledge and best practices. Synergy efforts will focus on three areas: optimizing feedstock and supply chain management, strengthening product portfolio leadership, and enhancing operational and production efficiency. Expected outcomes include cost reductions, improved asset utilization, greater business flexibility, and stronger profitability and cash flow to support future investments.

Under the transaction structure, GC will hold 56% and SCGC 44% of the joint venture through a share swap with no cash payment, covering olefins and polyolefins assets and businesses in Thailand, including stakes in related joint ventures, enabling efficient resource and asset management under a governance structure aligned with shareholding proportions. Naranong said GC expects to seek shareholder approval in December 2026 before proceeding with pre-conditions and regulatory approvals in the first half of 2027. If approved and conditions are met, the joint venture is expected to be established in the second half of 2027.

SCGC CEO Sakchai Patiparnpreechavud said the complementary strengths of both organizations will help create a competitive and sustainably growing business, spanning feedstock flexibility, production bases, technology, innovation, and high-value product development. The combined production capacity will enhance potential for...