Post on 10-May-2018
transcript
1Q/2015 Analyst Meeting May 15, 2015
Disclaimer
This presentation material has been prepared solely for informational purposes only. IRPC is furnishing it solely for use by prospective investors / analysts in the proposed event. IRPC makes no representations or warranties as to the accuracy or completeness of such information. By accepting this material each recipient agrees that IRPC shall not have any liability for any representations (express or implied) contained in, or for any omissions from this presentation.
The information contained herein does not purport to be all-inclusive or to contain all of the information that may be material to the recipient’s decision. Each recipient of the information and data contained herein should perform its own independent investigation and analysis of the transaction and the creditworthiness of IRPC . Reference in this Disclaimer to this shall include references to the Appendices (if any) hereto.
2
1Q/15 Highlight
Operation & Financial Performance
Industry Outlook
Strengthening Core Business and Beyond
Appendix
1
2
3
4
5
Agenda
3
71,854 60,949 49,941
104.5 74.4 51.9
Highlight: 1Q/15 Performance Overview of Business
Net Sales (net excise)
Dubai
Unit: $/bbl
344
(5,779)
3,832 Net income
Unit: MB
Unit: MB
Market GIM 7.8 10.4 13.1
(0.5) (16.0)
(0.5)
1.1
(0.4)
(0.02)
8.5 (6.0) 12.5 Accounting GIM Oil hedging
Unit: $/bbl
1Q/14 1Q/15 4Q/14
QoQ 18 % YoY 30 %
YoY 47% QoQ 307%
4
Stock G/(L) Net LCM
QoQ 30% YoY 50 %
1. In 1Q/15, average Dubai price dropped to 51.9 $/bbl from 74.4 $/bbl in 4Q/14, because OPEC maintained high level of production and US crude oil stock kept on rising. In addition, the completion of primary agreement between US and Iran regarding nuclear issue will make Iran export more crude oil in the future. This will put more pressure on crude oil price.
2. Net sales were 49,941 MB in 1Q/15, dropping by 18% from 60,949 MB in 4Q/14 because of 20% lower product prices and 2% higher sales volume.
3. Market GIM in 1Q/15 was 13.1 $/bbl, up by 2.7$/bbl compared to 10.4 $/bbl in 4Q/14 because of better product spreads and benefits from Delta project.
The Accounting GIM in 1Q/15 was 12.5 $/bbl, increasing from -6.0 $/bbl in 4Q/14 mainly due to significantly lower stock losses and reversal of LCM.
4. Net profit was 3,832 MB in 1Q/15, compared to net losses of 5,779 MB in 4Q/14.
YoY 1,014% QoQ 166%
Operational Excellence
Commercial Excellence
Procurement & Human Resource Excellence
• VCM/LP Upgrade, Production Planning and Schedule Optimization
• Yield and Process Energy Optimization • Utility System Optimization • Reliability and Asset Integrity Enhancement • Overhead Cost Management • UHV Enhancement • Margin Improvement
• Petrochemical Marketing and Sales Excellence
• Petroleum Marketing / and Sales Excellence
• New upgraded LP (best-in-class standards tools), enabling optimum crude selection
• Optimized processing operations unit
• Optimized steam and power generation
• Minimized unplanned shutdown
• Shortened time required for turnaround
DELTA Benefit Summary
Highlight: Delta Project
* Include working capital benefit of $6.7 million 67.7
28.5
20.8
18.4
Actual
5
• Lower total costs of ownership
• More efficient procurement process
• Reduced non-moving inventory of spare parts
• Budget saving
• Reallocation of spot/term contracts for petroleum products
• Focus on higher margin and high potential customers, and maintained customer royalty for petrochemical products
• Procurement Best Practice & Sourcing Optimization
• Internal Organization Merger • Leadership Development • HR Operation Expenses Management
2014 1Q/15
25.9
12.5
12.3
1.1
Unit: MUSD
*
Highlight: 1Q/15 Update Fire Incident Update
UHV Project Progress: 93% % as of April 2015, COD within 2015
• VGOHT Unit: Completion of repair and replacement for defective equipment with
VGOHT’s commission and stability production test run
COD on April 12, 2015
• Insurance Claim: Expected receipt of remaining claim within 2015
6
Lawsuits Settlement
• Benefits from the land of 1,000 Rai purchased through a selling mechanism by the official receiver.
• Gains from reversing TPI Aromatics doubtful account of 2,823 MB
• Cooperation between IRPC and Blue Light Industrial, a launch of the luggages made from Green ABS under the CAGGIONI brand
Above ground piping 400 KV Sub Station Atmospheric tank painting DCS in Control Room
Marketing
1Q/15 Highlight
Operation & Financial Performance
Industry Outlook
Strengthening Core Business and Beyond
Appendix
1
2
3
4
5
Agenda
7
Petroleum Performance Dubai Crude Price & Petroleum Product Spreads
$/Ton 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 Fuel Oil(FO) 610 607 591 437 318 150BS - FO 600 628 657 776 720 500SN - FO 486 501 499 493 369 Asphalt - FO -68 -78 -66 85 23
104 105 104 105 106 108 106 102 96 87
76 60
46 55 55
1Q/14 2Q/14 3Q/14 4Q/14 1/Q15
Dubai Price
($/BBL)
$/bbl 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 Dubai (DB) 104.5 106.1 101.5 74.4 51.9 NP - DB -1.5 -1.0 -1.6 -5.1 1.4 ULG95 - DB 14.6 16.1 13.2 13.4 15.3 Gas Oil - DB 17.8 16.0 14.4 16.0 16.3 FO - DB -8.5 -10.6 -8.4 -5.6 -1.8
613 612 604 596 605 618 601 594 578 502
456 353
279 346 328
Fuel Oil
($/Ton)
FO Price & Lube Base Oil Product Spreads
• Naphtha spread rose as a rising of LPG Price ahead of winter season and the incremental demand from Taiwan, ahead of a planned partial turnaround in Mar.
• ULG95 spread rose as refineries in Asia and US shutdown for maintenance.
• Gas Oil spread slightly increased on solid demand for heating oil in the winter and tight supply from the maintenance shutdown of refineries in US.
• FO spread increased due to the speculation of the storage of fuel oil in the vessels in the time of the low crude oil price.
1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 8
• Lube spread fell from additional supply of Lube Group II from Korea and Singapore.
• Asphalt spread was a little bit lower due to the decline in construction activities after year end.
• Global crude oil price is still under pressure from excess crude supply from both OPEC and Non-OPEC oil producers.
1.3 0.6 0.9 2.8
5.2 1.8 1.1 1.3
1.9
1.8
3.1
1.7 2.2
4.7
7.0
1Q/14 2Q/14 3Q/14 4Q/14 1Q/15
Lube Base
Refinery
Petroleum Performance
• In 1Q/15, the crude intake was 180 KBD
(84% utilization), similar to the rate in
4Q/14 as the VGOHT unit still shutdown.
• Domestic crude intake was 13 KBD,
decreasing 1% from the previous quarter
9
65% 65% 65% 67% 60%
5% 6% 16% 8% 19% 14% 18% 11% 8% 7% 16% 11% 8% 17% 14% Others
Domestic
Far East
Middle East
Crude Run (KBD)
80% 80% 76% 84% 84%
172 173 163 180 180
1Q/14 2Q/14 3Q/14 4Q/14 1Q/15
5.17 3.89 3.31 2.97 2.00 Premium over Dubai($/ bbl)
%Utilization
$/ bbl
Market GRM
Crude Intake
Sales Volume
12.4 12.3 12.2 13.0 12.9
1.6 1.7 2.1 2.5 2.5
14.0 14.0 14.2 15.5 15.4
1Q/14 2Q/14 3Q/14 4Q/14 1Q/15
Lube
Refinery
M.bbl
15.5 15.7 14.9 16.6 16.2 156 154 155 168 172 KBD
Crude intake (M.bbl)
$/Ton 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15
Naphtha (NP) 935 951 913 647 494
Ethylene-NP 507 496 565 567 533
HDPE- Ethylene 106 121 135 334 266
HDPE- NP 613 617 700 901 799
Propylene-NP 435 328 388 385 339
PP-Propylene 200 309 325 419 316
PP-NP 635 637 713 804 655
10
Petrochemical Performance Olefins Product Price & Spreads
Aromatics & Styrenics Price & Spreads
$/Ton 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15
Naphtha (NP) 935 951 913 647 494
BZ - NP 364 341 392 318 179
TOL - NP 161 135 234 183 127
MX - NP 169 115 225 162 169
SM - NP 724 674 688 602 524
PS - NP 863 804 821 816 674
ABS - NP 980 974 1,033 1,119 1,068
• HDPE spread against Naphtha decreased due to the increase of Naphtha price caused by lower supply of US refineries which had a maintenance shutdown.
• PP spread against Propylene and Naphtha dropped as a result of additional PP capacity from China around 1.6 million tons per year.
• Toluene spread fell because of a downward pressure from low price of Benzene.
• Mixed xylene spread rose, affected by strong demand of Paraxylene.
• ABS and PS spread continued to drop because of the lower demand caused by the slowdown of the economy in China and higher production rate in NEA.
156 137 156
268 258
66 39
83
136 91 116
94
120
203 187
1Q/14 2Q/14 3Q/14 4Q/14 1Q/15
$/MT
2.6 2.1 2.2
3.1 4.0
0.8 0.4 1.1
1.5 1.0
3.4
2.5 3.3
4.6 5.0
1Q/14 2Q/14 3Q/14 4Q/14 1Q/15
$/bbl
Petrochemical Performance
11
Utilization Rate Sales Volume
200 194 174 164 208
143 153 148 142 153
343 347 322 306 361
1Q/14 2Q/14 3Q/14 4Q/14 1Q/15
Aromatics and StyrenicsOlefinsK.MT
Market PTF
Aromatics &Styrenics Olefins
Market PTF
Aromatics &Styrenics Olefins
98% 90% 84% 77% 89% Olefins
85% 80% 87% 74% 77%
Aromatics&Styrenics
Utilization rate of aromatics & styrenics in 1Q/15 was 77%, increasing 3% compared to the rate in 4Q/14, because of planned shutdown of NHTU unit and Reformer unit for 15 days.
Utilization rate of olefins in 1Q/15 was 89%, increasing by 16% compared to that in 4Q/14 because of ethylene plant’s maintenance shutdown in 4Q/14.
15.5 15.7 14.9 16.6 16.2 Crude intake (M.bbl)
1Q/14 2Q/14 3Q/14 4Q/14 1Q/15
1Q/14 2Q/14 3Q/14 4Q/14 1Q/15
Overall Performance Market GIM
3.1 1.7 2.2 4.7 7.0 3.4
2.5 3.3 4.6
5.0 1.3
1.2 1.2
1.1 1.1
7.8 5.4 6.7
10.4 13.1
1Q/14 2Q/14 3Q/14 4Q/14 1Q/15
Power & Utility Petrochem Petroleum$/bbl
Accounting GIM
12
1Q/15 vs. 4Q/14
• In 1Q/15, Market GIM was 13.1 $/bbl, rising by 2.7 $/bbl compared to 10.4 $/bbl in 4Q/14. - Product spreads 2.26 $/bbl - Delta project 0.42 $/bbl
• Oil hedging losses were -0.02 $/bbl (-10 MB), declining by 0.38 $/bbl compared to -0.4 $/bbl in 4Q/14 (-206 MB). • Stock losses and gain from reversal LCM were -0.5 $/bbl (-282 MB), rising by 15.5 $/bbl compared to Stock losses
and provision for LCM of -16.0 $/bbl in 4Q/14 (-8,785 MB). • Accounting GIM was 12.5 $/bbl (6,722 MB) higher by 18.5 $/bbl from -6.0 $/bbl (-3,303 MB) in 4Q/14.
$/bbl
7.8 5.4 6.7 10.4
13.1
-0.5
1.9
-4.5 -16.0 -0.5
1.1 1.9 0.8
-0.4
-0.02
8.5 9.2 3.0
-6.0 12.5
1Q/14 2Q/14 3Q/14 4Q/14 1Q/15
Oil Hedging Stock G/(L) & LCM Market GIM
Gain from Reversing Doubtful Account
Received debt repayment 3,878 MB
Balance after offsetting of assets and liabilities 1,055 MB
Gain from Reversing Doubtful Account 2,823 MB
The Board of Directors approved a land purchasing from TPI Aromatics Plc.
IRPC and Official Receiver entered into a land purchasing agreement
IRPC received debt repayment of 3,878 MB, net gains 2,823 MB
December 2014
February 2015
April 2015
13
Financial Highlight: 1Q/15
Unit : MB Quarter % Change
1Q/15 1Q/14 4Q/14 YoY QoQ
Net sales 49,941 71,854 60,949 (30%) (18%)
Market GIM 7,014 3,970 5,688 77% 23% Stock Gain/(Loss) (3,541) (207) (5,839) (1,611%) 39%
LCM 3,259 (21) (2,946) 15,619% 211%
Oil Hedging Gain/(Loss) (10) 580 (206) (102%) 95%
Accounting GIM 6,722 4,322 (3,303) 56% 304% OPEX & Selling Exp. (3,329) (2,760) (3,264) 21% 2%
Other Income 321 306 532 5% (40%)
Insurance Claim - - 1,000 - (100%)
EBITDA 3,714 1,868 (5,035) 99% 174% Cost of Finance (507) (365) (309) 39% 64%
FX Gain/(Loss) 174 156 (254) 12% 169%
Impairment Gain/(Loss) 24 - (185) - 113%
Investment Gain/(Loss) (85) 35 (55) (343%) (55%)
Reversal of Doubtful Debt 2,824 (6) - 47,167% -
Income Tax (992) (67) 1,393 (1,381%) (171%)
Net Profit 3,832 344 (5,779) 1,014% 166%
Remark
Net Sales YoY: product prices 39%, sales volume 9% QoQ: product prices 20% , sales volume 2%
Market GIM YoY: 5.3 $/bbl: + 4.04 $/bbl from spread,
+ 1.21$/bbl Delta project QoQ: 2.7 $/bbl: + 2.26 $/bbl from spread,
+ 0.42 $/bbl Delta project
Stock G/(L) net LCM: net losses 282 MB in 1Q/15 (0.5 $/bbl) , Avg. Dubai at 51.9 $/bbl
Oil Hedging 1Q/15 Hedging 13% of production (4Q/14 = 20%,1Q14 = 41%)
OPEX & Selling Exp. YoY: 21% from maintenance, insurance exp. & donation 185 MB QoQ: relatively close to the amount in 4Q/14
Cost of Finance: gains from CCS
FX Gain/(Loss) Mar 31, 15: Ex.rate = 32.70 $/฿
Dec 30, 14 Ex. rate = 33.11 $/฿ Investment: Loss from associate companies
Reversal of Doubtful Debt: net received debt repayment from TPI Aromatics Plc.
Income Tax: Tax rate 20%
14
42,735 51,944 51,780
5,620 8,847 4,752 48,355
60,791 56,532
2,974 2,009 1,964
1Q/14 4Q/14 1Q/15
Long term Short term Cash & S/T investment
Debt Portfolio
Float 36 THB 62Fixed 64 USD 38
Currency (%) Interest Rate (%)
Net Debt = 54,568 MB
Debt Structure As of Mar 31, 2015
ST Loan 4,752LT Loan 16,389
Bond (USD) 7,774Bond (THB) 27,617
Total 56,532
Debt (MB)
ST Loan 8% LT
Loan 29%
Bond (USD) 14%
Bond (THB) 49%
45,381 58,782 54,568
1Q/14 4Q/14 1Q/15
Cost of Debt 3.90% 3.94% 3.91%
Debt Profile
1.16 0.94 0.85
1Q/14 4Q/14 1Q/15
0.60 0.87
0.76
1Q/14 4Q/14 1Q/15
Net D/E CA/CL
USD/THB = 32.70
Net Debt
Unit: MB
15
Maturity of Financing Debt
2,370 2,740 3,040 2,340 3,340 6,870 327 654 654 3,107 654
327 5,000
7,386 5,000 3,364
6,890
7,783
7,697
3,394
18,863
10,447
7,358
14,087
2015 2016 2017 2018 2019 2020 - 22
THB Loan
USD Loan
THB Bond
USD Bond
Financial Ratios
Unit: MB
As of Mar 31, 2015
1Q/15 Highlight
Operation & Financial Performance
Industry Outlook
Strengthening Core Business and Beyond
Appendix
1
2
3
4
5
Agenda
16
Challenging Crude Oil Market: Volatile Crude Oil Price
17
Crude Oil will Face the Over Supply Situation OPEC Production at the Full Tilt US weekly oil rig count vs. crude oil production
Floating Storage on Rising in the Beginning of the Year
18
The US rotary oil rig count experienced an uptrend in 2014, but that trend has reversed from Dec14, peaked at 1,575 rigs then decreased to 813 rigs in Mar15.
Source: IEA monthly data and euanmearns.com, Mar 15
OPEC 12 Crude Oil Production Capacity
Source: Baker Hughes and US Energy information Administration
Source: PIRA, Jan 15 Source: PIRA, Bloomberg
Potential storage revenue in current market sharply drop in 2H/15
• Based on current floating storage, total floating
incentive, PIRA estimates that this contango
average roughly -0.54 $/bbl per month not to
induce further activities.
Floating Storage Currently Uneconomic (5-Day Avg Through May 7,2015)
19 Source: PIRA, Apr 15
Source: PIRA, Apr 15 Source: PIRA, Apr 15
$/bbl
Short-Term Crude Oil and Petroleum Products Outlook
Driving Determinants
20
Key Products
Price (1Q/15)
Spread (1Q/15)
2Q/15
vs. 1Q/15
3Q/15 vs.
2Q/15
Refinery ($/bbl) ($/bbl)
Outlook Outlook
Dubai 51.9 -
ULG95 67.2 15.3
GAS OIL 0.05% 68.2 16.3
FO 50.1 -1.8
Lube Base Oil ($/Ton) ($/Ton) Outlook Outlook
500 SN 687 369
150 BS 1,030 720
• Q2 Price trends up relating to crude price trend and short supply from N.E. Asia refineries’ maintenance turn around
• Normally, region demand drops in Q3 according to monsoon season
• Gasoline spread in Q2 becomes better as a result of driving season and maintenance turn around. Then, the spread goes downward from the return of the refinery after the maintenance turn around.
• Gasoil cracks have come off a bit. Middle East refinery startups increase supplies for export. This will take time to be digested by the market.
• Fuel oil may face a headwind from steadily high inflows from the West and sluggish bunker demand due to non-improving economy.
• Crude prices are continuing to rise due to the sentimental decline in oil rig count in US and M.E. tension.
Short-Term Petrochemical Products Outlook
21
Key Products
Price (1Q/15)
Spread (1Q/15)
2Q/15
vs. 1Q/15
3Q/15 vs.
2Q/15
Olefins ($/Ton) ($/Ton)
Outlook Outlook
Ethylene 1,026 532
HDPE 1,293 799
Propylene 833 339
PP 1,149 655
Styrenics ($/Ton) ($/Ton) Outlook Outlook
PS 1,168 674
ABS 1,562 1,068
Driving Determinants
• Polyolefins prices and spreads will remain high in Q2 due to peak crackers’ scheduled turnaround and unplanned shutdown from Mar - May.
• Downstream demand is improved by restocking, firmer upstream cost, limited supply availability, as well as the preparation for production of end-products which are used in Summer season.
• Asia styrene monomer (SM) and its downstream prices are extended gains amid a recovery in crude futures and tight availability in the region which is likely to persist in the near term thus lending support to the market.
• Downstream demand is expected to robust by manufacturing activities improvement in Q2-Q3.
• Olefins market sentiment remained firm in Q2 supported by tight supply situation, firm feedstock price and improvement in demand.
• Increased Ethylene supply from ME and deep-sea cargoes coupled with complete TA in NEA will put the pressure on the market in Q3
• Additional propylene supply from the new on-propose units in China keeps on-going pressure on the market
1Q/15 Highlight
Operation & Financial Performance
Industry Outlook
Strengthening Core Business and Beyond
Appendix
1
2
3
4
5
Agenda
22
Strengthening Core Business
Operational Excellence
Commercial Excellence
Procurement & HR Excellence
118
70.7
26.4
20.9
Improve overall performance under the Delta Program
1. DELTA 3. Joint Venture 5. PPE+PPC 4. UHV 2. Specialty Product
Unit: MUSD
23
Strengthening Core Business
16%
22%
31% 33% 34% 35% 38% 40%
47%
54%
60%
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
1.5X
1.2X
1.1X
Sales volume (Ton)
1.3X
Strategic move to High-Value Specialty Products
1. DELTA 3. Joint Venture 5. PPE+PPC 4. UHV 2. Specialty Product
Nano
ABS Powder Wood
Composite
PE-Pipe
AMSAN
Anti-dripping
Green ABS
EPS
Superadsorbent
Wire&Cable
Conductive UHMW-PE
Plastic Compound
Natural Color Compound
24
Strengthening Core Business
Ton
11,703 15,068
18,221 17,583 21,838
41,515
0
10,000
20,000
30,000
40,000
50,000
2011 2012 2013 2014 2015F 2020F
Sales Plan
Sale volume +90%
949 1,193 1,425 1,391 1,766
3,357
34 50 56 50
62
118
0
20
40
60
80
100
120
140
0
1,000
2,000
3,000
4,000
5,000
6,000
2011 2012 2013 2014 2015F 2020F
Revenue (LH)Net Profit (RH)
Sale value: MB
Revenue +90%
Net profit +90%
IRPC A & L Company Limited Distribute ABS and ABS Color Compound Products for the automotive industry, electronics, and office equipment
Lamp housing • PC/ABS • ASA
Marque • ABS
Front Grill (Radiator Grill) • ABS, AES • PC/ABS
Pillars •AES
Instrument Panels •PC/ABS Cub Holder • ABS Air Conditioner Vent Nozzle • ABS
Outer Door Window Housing • ABS • PC/ABS
Outer Door Handle •PC/ABS
Note : TABS held by IRPC at 100% : NAL held by Sumitomo Corp. at 85%
Shareholding Structure
• Thai ABS(TABS) 60% • Nippon A&L(NAL) 35% • Sumithai 5%
Performance Plan
Net profit: MB
1. DELTA 3. Joint Venture 5. PPE+PPC 4. UHV 2. Specialty Product
25
Strengthening Core Business
IRPC Polyol Company Limited & PCC Rokita SA (Poland) Signed a joint venture agreement on January 9, 2015 to distribute Polyurethane
Registered Capital of 10 MB Shareholding Structure
• IRPC Polyol Co., Ltd. 50% • PCC Rokita SA (Poland) 50%
Focusing on production technology transfer of high value specialty products to meet customer needs.
050
100150200250300350
2011 2012 2013 2014 2015 2016 2017 2018 2019
Net Profit Sharing
05,000
10,00015,00020,00025,00030,000
2011 2012 2013 2014 2015 2016 2017 2018 2019
Standard productHigh-value product
0
5,000
10,000
15,000
20,000
2554 2555 2556 2557 2558 2559 2560 2561 2562
Standard productHigh-value product
Max capacity 25,000 MTA
Max capacity 19,000 MTA
Ton
2554 2555 2556 2557 2558 2559 2560 2561 2562
Ton
MB
2011 2012 2013 2014 2015 2016 2017 2018 2019
Polyol Base Sales Plan
PU System Sales Plan
Performance Plan
2011 2012 2013 2014 2015 2016 2017 2018 2019
1. DELTA 3. Joint Venture 5. PPE+PPC 4. UHV 2. Specialty Product
26
Strengthening Core Business
39 101
316
460 493
0
200
400
600
800
1,000
1,200
2013 2014 2015 2016 2017 2018 2019
Take Equity
IRPC Clean Power Company Limited The Company was incorporated on June 20, 2014
Net Profit (MB)
2015: COD • Aux Boiler: Steam 100 T/h • Co-gen 1 unit:
• Electricity 45 MW • Steam 70 T/h
2017: COD • Co-gen 4 units:
• Electricity 240 MW • Steam 200 T/h
Capacity
Performance Plan
Registered Capital of 3,362.3 MB Shareholding Structure
• GPSC Plc. 51% • IRPC Plc. 49%
To produce electricity and steam for EGAT’s SPP contract and UHV project
As of April 2015 Progress: 52%
1. DELTA 3. Joint Venture 5. PPE+PPC 4. UHV 2. Specialty Product
27
413601
692 741 744838
1,126
0
500
1,000
1,500
CTO*
#
Splitte
r
Naph
tha(In
tegrat
ed)*
Naph
tha(No
n-Inte
grated
)*
PDH
Metat
hesis
MTO*
^
Dollar
s Per
Metric
Ton
NEA Propylene Cash Cost
Source: IHS Chemical
*Per Metric Ton of Light Olefins#Basis: Inner Mongolia, NW China ^Basis: Shanghai, E China
© 2015 IHS
UHV Cost Competitiveness
28
UHV
Upstream Project for Hygiene & Value-added Products (UHV): Upgrading low value product (Fuel Oil) to be high value-added product for petrochemical feedstock: Propylene 320 KTA and Heavy
Aromatic Naphtha 250 KTA
Strengthening Core Business 1. DELTA 3. Joint Venture 5. PPE+PPC 4. UHV 2. Specialty Product
Existing Propylene
UHV
412 KTA
320 KTA
Total Propylene
732 KTA
Source: HIS Chemical: April 9, 2015
23% 8%
14%
10%
40%
38%
5%
10%
16%
21%
2%
5% 6% 2%
0%
20%
40%
60%
80%
100%
IRPC IRPC+UHV
Ethylene
Propylene
LPG
Naphtha +Reformate
Gasoline
Diesel/ JetFuel
Lube Oil
Fuel Oil
Source : Nexant July 14
IRPC Petrochemical Business Analysis
• Focus on propylene & polypropylene chain due to
solid competitive advantage.
• In particular, the technology in the DCC-based UHV
project is one of the most competitive technologies in
propylene production.
• To shelter from downward propylene price pressure,
additional propylene is to be integrated to
polypropylene production.
PP Existing 475 KTA
PP Expansion 160 KTA
PPC 140 KTA
PP 635 KTA
PP Inline Compound (PPC)
Random PP
Specialty PP
Block-CO PP
HOMO PP
• Pipe grade • Hygiene
• Container box
• Household Material
• Heavy-duty
• Film application
• Fiber grade
PP Compound • Frozen food packaging
• Lamination • Health care • Automotive
Total PP Capacity 775 KTA
Strengthening Core Business 1. DELTA 3. Joint Venture 5. PPE+PPC 4. UHV 2. Specialty Product
29
Strategic Initiatives: Roadmap to Success
• DELTA Initiative Implementation • Assets Management (Bankai/EIZ)
Para-Xylene (PX)
Acrylic Acid (AA)
• CHP I: Electricity +220 MW, Steam +420 T/hr • PRP +100 KTA of Propylene • EURO IV: Gasoline 15 KBD, Diesel 10 KBD, Jet 15 KBD • TDAE +28 KTA, 150BS +25 KTA • Lube Blending +60 m.Ltrs./year • EBSM +60 KTA, ABS/SAN +60 KTA • HDPE: Convert commodity product to pipe grade 140 KTA
Completed Project during 2011-14
2014 Crude Run 172 KBD Nelson Complexity Index Portfolio of Revenue: Petroleum/Petrochemical & Others
After UHV Completion Crude Run 215 KBD Nelson Complexity Index More stable portfolio of Revenue: Petroleum/Petrochemical & Others 75% / 25% 59% / 41%
6.6 8.6 80% 100%
3
STS 2014: Strengthening Core Business
Super Absorbent Polymer (SAP)
Quick Win Initiatives
2015
2017
30
2014
2
1
IRPC-CP Completion (49% shareholding) • Electricity 240 MW • Stream 200T/h
The future begins now creating shared value
Q & A Environment Social Education & Sports Labor & Human Rights Religion Public Health
31
Thank You
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1Q/15 Highlight
Operation & Financial Performance
Industry Outlook
Strengthening Core Business and Beyond
Appendix
1
2
3
4
5
Agenda
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Lube Base
DCC
Vacuum Gas Oil (VGO)
PP
PS
ABS/SAN
EPS
BTX
UHV
CCM
Acetylene Black
HDPE Ethylene
Acetylene
Propylene
Ethylene
Olefins Plant
Benzene
Toluene Mixed Xylene
Acetylene Ethylene Propylene Butadiene
Butadiene
CD1
Ethylene
EBSM
PRP
Long Residue (LS)
Long Residue
6 KTA 360 KTA 180 KTA 56 KTA
100 KTA
4 KTA
140 KTA
475 KTA
Ethylene Rich Gas
Pyrolysis Gasoline Raffinate
Propylene 132 KTA
Atmospheric Distillation Unit (ADU) 1, 2 215 KBD
Naphtha
Reformate
Ethylene Propylene
73 KTA 320 KTA
Lube Base Oil Asphalt
320 KTA 600 KTA
Polyol 25 KTA
Power Plant
Benzene Toluene Mixed Xylene
Long Residue
114 KTA 132 KTA 121 KTA
31 KTA
57 KTA
177 KTA
100 KTA
30 KTA
260 KTA
Styrene Monomer
Electricity Steam
108 MW/220 MW (CHPI) 200 T/h/420 T/h (CHP I)
Propylene
Highly Integrated and Optimized Configuration
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Feed (Crude Oil / Condensate)
Propylene Oxide
For Sale
Transportation Fuel Gasoline, Jet, Diesel