SCG expects the joint venture plan with PTTGC, if the deal goes through, to take one year to establish the new company.
SCG expects its plan to establish a joint venture with PTTGC to be finalized by the end of the third quarter. If the deal goes through, it will take one year to set up the new company, which will double production capacity. The plan to list SCGC on the stock exchange remains unchanged, and the company is continuing to manage raw material risks in response to the situation in the Middle East.
April 30, 2026 – Mr. Thamsak Sethaudom, President and CEO of Siam Cement Public Company Limited (SCC) or SCG, revealed that a plan to establish a joint venture between SCG Chemicals Public Company Limited (SCGC) and PTT Global Chemical Public Company Limited (PTTGC) to study the establishment of a joint venture in the olefins and polyolefins business in Thailand is expected to be finalized by the end of the third quarter of 2026. If an agreement is reached on the joint venture plan, the process of establishing the new company is expected to take approximately one year, as it requires the transfer of assets from both companies.
Initially, the merger of the two companies' business units will double the production capacity of olefins products to 7 million tons, and increase the production capacity of PE and PP products to 6 million tons.
Regarding the plan to list SCGC on the Stock Exchange of Thailand, it remains on track, but may be postponed. Although some assets will need to be transferred to the joint venture after the establishment of the joint venture with PTTGC, the company will still have assets to continue its business operations.
Mr. Sakchai Patiphanpreechawut, Director and Chief Executive Officer and President of SCG Chemicals Public Company Limited (SCGC).
Mr. Sakchai Patiphanpreechawut, Director and Chief Executive Officer and President of SCG Chemicals Public Company Limited (SCGC) , added that the feasibility study for a strategic joint venture in the olefins and polyolefins business in Thailand by the two companies aims to strengthen the supply chain. The approach involves combining the olefins assets of both companies in Thailand to establish a new company, without affecting the core structure of the existing companies.
“The idea of this joint venture did not just arise from the conflict in the Middle East, but has been considered for a long time. It was recognized that the country's economy needed a strong upstream industry, with olefins being a crucial upstream industry for other industries. Meanwhile, in terms of competition, the petrochemical industry typically faces an oversupply situation and intense competition, with new players entering the market. Furthermore, the business cycle is shortening, and competition is not limited to the country but also includes competition from foreign producers in the global market.”
Therefore, merging businesses that are critical to the country is an important step. The recent situation in the Middle East, impacting plastics production, is a factor that accelerates the study of this joint venture.
PTTGC, a subsidiary of PTT, has strong upstream capabilities, including oil refineries, a continuous production chain, and access to global resources. Meanwhile, SCGC specializes in end-product development, possessing a research and development (R&D) team and diverse markets.
Therefore, combining the strengths of both companies, both in upstream raw materials and their expertise in product and market development, will strengthen and stabilize the olefins business and contribute to the overall economic strength. In critical situations like the current shortage of upstream raw materials for plastic resin production, a strong and stable plastic resin business capable of producing resin without shortages will lead to stronger and more stable industries that use plastic resins. This strength will then radiate to related businesses and ultimately to end users, who will not be affected by the plastic shortage.
For the chemicals business, the situation in the Middle East has resulted in raw material shortages and higher prices. Producers in Asia and the Middle East have reduced production capacity and machine utilization by approximately 46 million tons, or about 20% of ethylene production capacity, leading to a decrease in market supply. These cost and supply factors have resulted in higher global prices for polyethylene (PE) and polypropylene (PP).
In the first quarter of 2026, SCGC reported a profit of 1,078 million baht, primarily due to adjustments in inventory valuation, higher petrochemical price spreads, and increased profit sharing from joint ventures. SCGC is accelerating its strategic adjustments to cope with the volatility of raw material imports from the Middle East.
The focus is on sourcing raw materials from locations outside the Middle East, managing raw materials and production plans for maximum efficiency, and prioritizing domestic customer delivery to minimize supply chain impacts. Simultaneously, the company is promoting High Value Added (HVA) products to enhance long-term competitiveness.
However, despite the recent need to temporarily shut down the LSP plant in Vietnam, following a previous temporary shutdown of the ROC plant in Thailand due to limited raw material supply, SCG will use this time for maintenance and to accelerate preparations for the ethane gas supply project at the LSP plant, which is currently 54% complete. The goal is for the plant and machinery to be ready for operation by the end of 2570, as planned, to support the long-term competitiveness of the business.
Apart from the temporary shutdown of two plants (LSP and ROC), operations at other plants in the chemicals business unit are proceeding as normal.
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