PTTCH in oleochemicals tie-up

PTTCH president and CEO Aditheb Bisalbutr said in a statement filed with the stock exchange that under a deal worth Bt5.5 billion, the company would buy the stake from German chemicals maker Cognis.

"We want to diversify investment and create added value into different down-stream products in order to enhance competitiveness while maintaining and stabilising revenue growth," he said.

The transaction will expand PTTCH's oleochemicals business and its derivatives, which are natural-based products with stable demand growth.

The firm wants to develop its global presence through COM's marketing channel, which is made up of customers worldwide.

The company aims to strengthen its oleo-chemical feedstock position through Sime Darby.

The deal, conducted through wholly-owned subsidiary PTT Chemical International, is expected to be completed by September. The subsidiary was established earlier this month.

Malaysia-based Cognis Oleo-chemicals is a producer and distributor of various types of oleochemicals products, including basic oleochemicals and speciality oleochemicals such as fatty acids, fatty alcohol and glycerin.

It operates through 11 subsidiaries in Europe, the United States and Asia and two joint venture companies in Malaysia and China with a total oleochemicals production capacity of 962,000 tonnes a year.

A KGI Securities (Thailand) analyst gave a positive view of the deal, saying PTTCH's oleochemicals capacity would be raised from 300,000 tonnes a year presently with the expansion into Malaysia.

"The investment is small compared to the more than Bt7 billion that PTTCH invested in an oleochemical plant here," the analyst said.

He said the investment should contribute around Bt500 million in annual revenue to the company.