Long Son Petrochemicals Company Limited (LSP), the biggest petrochemical complex in Vietnam, has temporarily paused its commercial operations to cope with high production costs and the impact of a downturn in the global petrochemical market.

Thammasak Sethaudom, president and CEO at Thailand’s top industrial conglomerate Siam Cement Group (SCG), on Friday announced SCG’s business performance during the first nine months of 2024, including the temporary suspension of the LSP complex, a wholly owned subsidiary of SCG Chemicals.

SCG said that the LSP complex will resume operations when market conditions become more favorable.

According to the Bangkok Post, the suspension at the complex began in mid-October and could last for at least six months.

With a price tag of over US$5 billion, the complex, located in the southern province of Ba Ria - Vung Tau, commenced commercial operations on September 30 this year, churning out 74,000 metric tons of plastic resin in its trial phase.

The petrochemical industry is currently facing challenges, including a supply surplus and reduced global demand. 

To enhance its long-term competitiveness, SCG is upgrading the LSP complex, enabling it to use imported ethane from the U.S.

The upgrade will reduce production costs as ethane is a globally competitive feedstock, and it will provide greater flexibility in raw material selection, the SCG leader said.

The upgrade project, with a total investment of $700 million, will mainly fund the construction of ethane storage tanks and related infrastructure. 

The project is scheduled for completion by the end of 2027.

Long Son Petrochemicals Company Limited has a total investment of over $5 billion. Photo: L.S.

From January to September this year, SCG posted $10.66 billion in revenue, with profit plunging 75 percent year on year to $192 million, mainly due to operational costs at the LSP complex, lower petrochemical margins, and decreased earnings from joint ventures.

Regarding its petrochemical segment, SCG is focusing on managing production at its three facilities—Rayong Olefins and Map Ta Phut Olefins in Thailand, and the LSP complex in Vietnam—to adapt to fluctuations in raw material costs, market demand, and the global economy, and to optimize its competitiveness.

However, in the third quarter of 2024, SCG’s petrochemical segment reported a net loss of $105 million due to exchange rate impacts from the Thai baht’s appreciation and reduced income from affiliated companies.

This loss excluded a one-time financial gain worth of VND1.56 trillion ($61.6 million) from the termination of an interest rate swap contract at the LSP complex.

In Vietnam, SCG reported its total sales revenue of $1.03 billion in the January-September period, marking a 17-percent rise from the same period last year, primarily driven by revenue growth in its SCG Chemicals segment.

Like us on Facebook or follow us on X to get the latest news about Vietnam!