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Published on March 21, 2008

Two Siam Cement Group units yesterday signed up for a US$4-billion (Bt125 billion) joint venture with Vietnamese partners to build the first integrated petrochemical complex in the country.

SCG president and chief executive officer Kan Trakulhoon said Vina SCG Chemicals and Thai Plastic and Chemicals held a combined 71-per-cent stake, while PetroVietnam and Viet Nam National Chemical (Vinachem) hold the remainder.

The greenfield complex will be located on Long Son Island, Ba Ria-Vung Tau province, adjacent to Vietnam's third oil refinery.

The complex will have an annual production capacity of 1.65 million tonnes of olefins, 1.45 million tonnes of polyolefins, 280,000 tonnes of chlor-alkali, 330,000 tonnes of PVC and 400,000 tonnes of vinyl chloride monomer.

It will also have a port, storage facilities and utilities. PVC production will likely begin in 2012, with the other plants up and running the following year.

"The complex is of great importance to Vietnam in terms of facilitating development of other related industries like automotive, packaging, chemicals, plastics and aluminium," said PetroVietnam president and CEO Tran Ngoc Canh.

PetroVietnam and Vinachem are the leading petroleum and chemical firms in Vietnam, while SCG is one of Southeast Asia's leading industrial conglomerates, whose businesses include distribution and processing of chemicals, paper manufacturing, cement and construction materials.

Since starting up in Vietnam in 1990, SCG has established seven subsidiaries, with 400 workers and investment capital of $150 million.

Surachai Pramualcha-roenkit, an analyst at Kim Eng Securities, said the Thai conglomerate's SCC stock, which gained Bt2 yesterday to close at Bt212, looked attractive because Vietnam is a potentially large market.

Currently, it imports all polyolefins, including from Thailand.

The group, which is facing a decline in net profits due to slower economic growth and higher costs, expects to benefit from its Vietnamese investment from 2013.

The Nation