Thailand’s SCG Chemicals IPO Obtains SEC Approval; eye list in 2023

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SINGAPORE (ICIS)–SCG Chemicals’ (SCGC) plans
initial public offering (IPO) has obtained approval from Thailand’s Securities and Exchange Commission (SEC), but its launch may not take place this year, its parent company Siam Cement Group (SCG) said on Thursday.

“The company anticipates that the IPO of SCGC and the listing of SCGC shares on the SET may not occur by 2022 and will further be considered appropriate in early 2023,” the Thai conglomerate said in a statement. a scholarship file on October 5.

SCG Chemicals plans to list up to 3.85 billion shares, representing 25.2% of the company. The planned IPO received SEC approval on Oct. 5.

It is currently “evaluating the appropriate time to proceed with its IPO,” SCG said.

The Thai conglomerate cited the risk of a global recession, the energy crisis and inflation, COVID-19 lockdowns in China, financial market conditions and investor confidence among the factors that would affect the timing of the listing. SCGC.

SCG’s board of directors approved the proposed IPO of its chemical subsidiary on June 26, 2022, approximately nine months after the announcement of a possible restructuring of the company for pursuing strong growth opportunities in ASEAN.

This was the same strategy adopted for another subsidiary CGS packagingwhich started trading on the Thai Stock Exchange on October 22, 2020.

For SCG Chemicals, IPO proceeds would fund new capacity being built Indonesia and Vietnam; planned integration and expansion of the vinyl chain; as well as strategic acquisitions.

In Vietnam, its wholly-owned subsidiary Long Son Petrochemical Project (LSP1) in the province of Ba Ria-Vung Tao was 96% complete from the second quarter, with full start-up planned for the second quarter of 2023, while a second complex on the site is under consideration.

In Indonesia, Chandra Asri Petrochemical, 30.57% owned by SCG, is building a second cracker project which is planned for the start of 2026.

For the ASEAN vinyl chain, SCG sees an opportunity in backward integration by building a capacity of 520,000 tons/year of ethylene dichloride (EDC).

At the same time, SCG Chemicals also plans to strengthen its circular economy platform with a sales volume of 1 million tonnes/year targeted for 2030.

In an investor presentation on Sept. 15, SCG said the economic downturn in the chemical industry was “due to the influx of additional supply and carryover of capacity from 2020-2021,” compounded by “abnormal factors” that have led to declines in operating rates of approximately 20% across the industry.

In the second quarter of 2022, SCG’s chemicals business recorded a 36% drop in revenue year over year before interest, taxes, depreciation and amortization (EBITDA) at 9.97 billion baht on high raw material costs.

Sales for the period increased 10% due to higher prices despite lower sales volumes.

In its chemical sector outlook in mid-September, SCG noted a “potential improvement in India’s post-monsoon season demand and growing appetite for recycled plastic.”

Focus article by Bantillo Pearl


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