Bangkok Energy Giant PTT: Efficiency Drive, Rejects Merger Speculation
Bangkok—State-controlled energy giant PTT Group has refuted rumors of an impending merger among its three key subsidiaries: PTT Global Chemical Plc, IRPC Plc, and Thai Oil Plc. Instead, the 51%-Ministry of Finance-owned company is exploring strategic partnerships and prioritizing operational improvements within these subsidiaries to navigate a challenging global petrochemical market. This announcement follows fluctuating global energy prices and shifting trade dynamics.
PTT Chief Executive and President Kongkrapan Intarajang addressed the speculation on Friday, stating that PTT will remain a major shareholder in all three companies. While he refrained from detailing potential partnerships, he emphasized that each subsidiary will continue pursuing its individual business plans and revenue targets.
Mr. Intarajang highlighted the focus on optimizing operations and strategically navigating the current global oversupply of petrochemical products, a situation expected to persist throughout the year. This oversupply is primarily attributed to increased exports from the Middle East and China, exacerbated by escalating US-China trade tensions, which have redirected more Chinese petrochemical output towards Southeast Asia.
This dynamic presents both challenges and opportunities. While a supply surplus is anticipated for paraxylene, a crucial hydrocarbon feedstock in textile manufacturing and other industries, olefins—another vital petrochemical building block—are expected to see a modest price increase. Mr. Intarajang attributed this optimistic outlook to the relatively robust demand for olefins in ubiquitous plastic production.
PTT has outlined a substantial investment plan of 55 billion baht from 2025 to 2029, including 25 billion baht earmarked for 2025. A significant portion will be directed towards the gas business. Beyond capital expenditure, the company is pursuing a multi-pronged strategy to enhance efficiency and profitability. This includes optimizing raw material procurement and finished product distribution, aiming for 3.3 billion baht in cost savings by 2025, and a digital transformation targeting 2 billion baht in annual cost reductions by 2026. These measures reflect PTT’s commitment to maximizing profitability in a competitive market.
PTT aims to increase its earnings before interest, taxes, depreciation, and amortization (EBITDA) by 30 billion baht by 2027, building on the 396 billion baht achieved in 2024. This goal follows a year of mixed results. Despite increased sales volumes, particularly in refined products and liquefied natural gas, PTT’s 2024 revenue dipped 1.7% year-on-year to just over 3 trillion baht, primarily due to lower international trading prices. Net profit also declined by 19.6% to 90 billion baht.
PTT’s strategic focus on operational efficiency and its significant investment plan signal a proactive approach to navigating the evolving energy landscape. The emphasis on partnerships and internal optimization suggests a shift away from drastic restructuring, such as mergers, in favor of a nuanced approach to strengthening its subsidiaries and maintaining its market position. The coming years will be crucial in determining the effectiveness of this strategy.
