IRPC unveils a five-year plan, spends 4.3 billion baht in M&A, UCF project, new business venture

Mr. Chawalit Tippawanich, Chief Executive Officer and President of IRPC Public Company Limited or IRPC, revealed that the company has set an investment budget for the next 5 years (years 65-69) in the amount of 43 billion baht. In the year 65 will use an investment budget of 20 billion baht, which is a preparation for entering into an M&A deal.

In addition, joint ventures in new businesses that are already clear about 8 billion baht, or about 35-40% of the total budget, and are divided into investments in the Ultra Clean Fuel (UCF) project, approximately 6 billion baht, or the remaining 30% will lead to the maintenance budget of refineries and petrochemical plants. At the same time, the company also prepares a reserve budget of 20 billion baht to support other new businesses that are pending clarity.

IRPC is currently undergoing a vision transition. Business guidelines from a petrochemical business, a refinery business to an innovative organization that uses materials and energy for life (To Shape Material and Energy Solutions in Harmony with Life), which is a mega-trend of the world that will help IRPC grow. By extending the growth from the current business group (Core Uplift), investment in adjacent businesses (Adjacent Business) and creating a new business (Step Out Business), which will be a joint venture (JV) and acquisition (M&A) approach. ) that will create the Company’s New S-Curve

In addition, the company is more prepared to enter the clean energy business. by setting a target to reduce greenhouse gas emissions (Greenhouse Gas: GHG) by 20% in 2030

Mr. Chawalit said that the company has a goal of 10 years or by 2030 to have earnings before interest, taxes, depreciation. And amortization (EBITDA) grows to 30 billion baht, half of which will come from new businesses. During the past 5 years, there will be EBITDA of not less than 20 billion baht, which will be proportional from new businesses, 1/3 of EBITDA. causing volatility in oil prices

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Mr. Chawalit said that the company is currently in the process of due diligence of the company to be acquired (M&A) is expected to be concluded in 1Q12 and another project is in the process of negotiating a model of valuation. Collaborated with companies listed in the Stock Exchange of Thailand. Both of these deals are all domestic partners.

“We still enjoy the same business and have time to study new business. What should be done next? In the middle of the year 65, there should be an initial study to look at the big picture,” said Mr. Chavalit.

The projects that are continuing from the current business are the diesel fuel quality improvement project according to the Euro 5 standard (Ultra Clean Fuel Project: UCF) with the amount of 13.3 billion baht according to the government’s policy. and from the trend of higher demand for low sulfur diesel both within the country and the ASEAN region To reduce the problem of PM 2.5 particulate pollution, it is expected that commercial operations can be carried out in 2024, as well as the development and increase in the proportion of sales of special plastic pellets (Specialty) from 20% in 2021 to 52% in 2025. Integrate workflows to speed market entry and customer response.

As for the investment in the adjacent business, such as the PP Melt blown plastic resin project and the joint venture establishment of Innopolymed Company Limited to produce non-woven fabrics (Non -woven Fabric), which is a key raw material for filter fabrics, masks, N95 masks, gowns and air filters, etc. It aims to be the first fully integrated non-woven fabric manufacturer in Thailand that is ready for commercial production in December. .J. 2021

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IRPC has also collaborated with PTT to study the production of medical gloves using Nitrile Butadiene Latex (NBL) as raw material to reduce imports from abroad and raising the level of public health Science, technology and medical equipment of Thailand This is in line with PTT Group’s New S-Curve business development guidelines, including the establishment of “Wachira Lab”, the first central laboratory to examine standards of comprehensive medical products in Thailand and Southeast Asia. By joining forces with Nawamintrathirat Open University in December 2021, this will help promote the strategy of developing Thailand into a Medical Hub of ASEAN.

In terms of creating new businesses (Step Out Business), i.e. (1) cultivating innovation from within (Inside-out Innovation) or doing corporate startups such as agricultural innovation. Zinc Oxide Nano (ZnO NANO) developed from zinc oxide (ZnO) that makes it small at the nanoparticle level. Improves efficiency in the absorption of nutrients into different parts. of the plant better It increases agricultural productivity and is safe for both farmers and the environment.

(2) seeking innovation from outside (Outside-in Innovation) through investments with business partners (Strategic Partners) and investing in corporate venture capital (CVC) to seek Start up or new technologies To expand into a new business by M&A that in addition to receiving financial returns The company also has new knowledge and technology. to meet the needs of the New S-Curve business as well

As for the outlook for operating results, Mr. Chavalit said that in the 4Q21, the trend of oil prices continued to improve as there was more demand in winter. Despite the pressure to release oil reserves into the market Causing oil prices to fall in the range of $75-78/barrel. But it is expected that in 4Q21, oil prices should continue to fluctuate at this level.

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Then in 65, oil prices are expected to be in the range of $65-68/barrel. The factor that causes price volatility is from international politics. each country policy China has plans to adjust the proportion of energy consumption to reduce the use of coal. switch to oil and gas substitutes In this year’s 65 refining capacity is expected to be at 1.85-1.90 hundred thousand barrels per day, close to the year 64.

As for the petrochemical business in 64, it improved significantly, but the spread (spread) is expected to return to normal in 2022. However, consumption will grow in line with the recovering economy. The world GDP next year is expected to stay. At 5% from 1% this year, Thailand’s GDP next year will grow around 4.5%, with the view that the Asian market has recovered well. especially in China and India.