Political instability and the ongoing suspension of some projects in the Map Ta Phut industrial zone will put the future of the Thai petrochemicals industry at risk if these problems are not resolved by the end of the year, warns BMI's latest Thailand Petrochemicals Report.
Disputes over environmental and health regulations lie at the centre of controversy at Map Ta Phut, which is the focus of the expansion of the country's petrochemicals industry. In 2009, the Central Administrative Court ordered the suspension of 76 industrial projects, many belonging to PTT and the Siam Cement Group, because of the failure of state agencies to comply with Section 67 of the Constitution which requires an independent body to screen new industrial projects classified as potentially harmful to the environment and public health. Subsequent court appeals by some of the project owners brought the number of suspended projects down to 46 by end-April 2010, including some that have been halted voluntarily by the companies. Nine out of 46 projects had received court approval to complete construction, but would need to petition again for approval to begin operations after construction is complete. Another 11 projects were seen as not being subject to the court orders as their environmental impact assessments were approved before the 2007 Constitution took effect and were allowed to go ahead without court permission. The remaining 26 projects were still seeking ways to present evidence to support their petitions to continue.
Meanwhile, Bangkok has seen massive political protests that increase political risk. Thailand's petrochemicals industry has functioned as normal despite the situation in Bangkok. However, Thailand will need to deal with its long-standing political instability to attract and maintain foreign direct investment (FDI) in the sector. Foreign investors are waiting to see how the political situation in Thailand develops, but if there is no improvement throughout 2010 investor confidence will decline.
Dow Chemical plans to continue with its commitment to pursue its investment in Thailand for long-term and sustainable growth. It said it is undeterred by the Map Ta Phut crisis and plans to continue its relationship with Siam Cement Group (SCG). Dow's only project under suspension as of Q210 was a 220,000 tonnes per annum (tpa) specialty elastomers project. While Dow retains confidence in Thailand, some Japanese companies have indicated they may consider departure from Thailand if the Map Ta Phut issue remains unresolved for an extended period. The Japanese Chamber of Commerce has suggested that if the suspension of industrial projects at Map Ta Phut continues into H210, there may be some relocations to other parts of Asia.
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Report Table of Contents:
Executive Summary
SWOT Analysis
- Thailand Petrochemicals Industry SWOT
- Thailand Political SWOT
- Thailand Economic SWOT
- Thailand Business Environment SWOT
Global Overview
- Petrochemicals Market Overview
- Table: World Ethylene Production By Country, 2009 And 2014 ('000 tonnes capacity)
- Global Oil Products Price Outlook
- Table: Oil Product Price Assumptions, Q409-Q410 (US$/bbl)
- Table: Oil Product Price Data And Forecasts, 2007-2014 (US$/bbl)
Emerging Asia Petrochemicals Overview
- Table: Asian Ethylene Projects
Thailand Market Overview
- Table: Thailand's Petrochemicals Sector - Cracker Data, 2006-2012 ('000tpa)
- Market Evolution
Industry Trends And Developments
- Table: Thailand's Petrochemical Projects
- Political Risk And The Petrochemicals Industry
- Latest Developments
- Olefins
- Table: Thailand's Petrochemicals Sector - Ethylene Capacity (tpa)
- Aromatics
- Table: Thailand's Petrochemicals Sector - Aromatics Capacity (tpa)
- Polymers
- Table: Thailand's Petrochemicals Sector - Polyethylene Capacity (tpa)
- Table: Thailand's Petrochemicals Sector - Polypropylene Capacity (tpa)
- Table: Thailand's Petrochemicals Sector - Polyvinyl Chloride Capacity (tpa)
- Table: Thailand Petrochemicals Sector - Polystyrene Capacity
- Financial Results
Petrochemicals Business Environment Ratings
- Table: Asia Pacific Petrochemicals Business Environment Ratings
Industry Forecast Scenario
- Table: Thailand's Petrochemicals Sector, 2007-2014 ('000 tpa, unless otherwise stated)
- Macroeconomic Outlook
- Table: Thailand - Economic Activity, 2007-2014
Company Monitor
- Indorama Polymers Public Company Limited (IRP PCL)
- Integrated Refinery and Petrochemicals Company (IRPC)
- PTT Aromatics and Refining (PTTAR)
- PTT Chemical (PTTC)
- PTT Public Company
- Shell
- Siam Cement/Cementhai Chemicals Company (CCC)
Country Snapshot: Thailand Demographic Data
- Section 1: Population
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2030
- Section 2: Education And Healthcare
- Table: Education, 2002-2005
- Table: Vital Statistics, 2005-2030
- Section 3: Labour Market And Spending Power
- Table: Employment Indicators, 2001-2006
- Table: Consumer Expenditure, 2000-2012 (US$)
- Table: Average Annual Non-Agricultural Wages, 2001-2012
BMI Methodology
- How We Generate Our Industry Forecasts
- Chemicals and Petrochemicals Industry
- Cross Checks
- Business Environment Ratings
- Table: Petrochemicals Business Environment Indicators And Rationale
- Weighting
- Table: Weighting Of Indicators
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