Thai Petrochemical Industry Public Company Limited Economics Essay

Thai Petrochemical Industry Public Company Limited : Thai Petrochemical Industry Public Company Limited by itself and through its subsidiaries and associated companies, is the largest and most diversified petrochemical producer in the kingdom, and the country’s third largest producer of cement. As such, the company is a leading player in the Thai economy. If economic development is to continue, it is of the utmost importance that the country’s industrial base is consolidated. TPI hopes to be at the forefront of such a move. [2] 

IRPC petroleum Co Ltd: IRPC is a producer of integrated petrochemical products. Its complex consists of an upstream, an oil refinery unit and a downstream petrochemical production. The company’s oil refinery unit has the total capacity of 215,000 barrels per day, accounting for 21% of the country’s total refining capacity. The IRPC’s production complex is located in an industrial estate managed by the company in Rayong. The estate provides necessary infrastructures that are used to support the production including a deep-sea port, oil storage tanks and a power plant. [3] 

Rayong Purifier PCL: Rayong Purifier plc (RPC) was established in 1995 by a joint venture between Thai businessmen with extensive experiences in the petroleum and the petrochemical businesses and Petro-Instruments Co., Ltd. RPC’s main business is to reified Condensate Residual (CR), which is a by product from the production process of Thai Aromatics Public Company Limited (ATC), into high quality petroleum and petrochemical products such as high-speed diesel oil, fuel oil, and petrochemical products for the wholesale and retail businesses. In addition, RPC is granted a fuel-trading license, according to Article 7 of Fuel Trade Act, B.E. 2543. [4] 

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Siam gas & petrochemicals PCL: Siam gas and Petrochemicals Public Company Limited engages in the trading and distribution of liquefied petroleum gas (LPG), ammonia, and petrochemical products primarily in Thailand. It offers its products for cooking purposes for households, restaurants, hotels, and department stores; auto gas stations; and steel and ceramic factories primarily through agents and retailers. The company also provides transportation services by land and ship through tanker vessels and road tankers. In addition, it manufactures and distributes cylinder and ethanol. The company, formerly known as VSPP Development Company Limited, was founded in 2001 and is headquartered in Bangkok, Thailand. [5] 

Thai Agro Energy PCL: Thai Agro Energy Public Company Limited is a Thailand based company engaged in the production and distribution of ethanol. Its ethanol is sold to companies that use it for the production of gasohol. The Company has a factory for the production of ethanol from molasses in Suphan Buri province, and has a production capacity of 165,000 litters per day, or 54.45 million litters per year. As of September 16, 2009, it had plans to expand its operations by producing ethanol from cassava and sugar cane on its second production line by another 200,000 litters per day, or 66 million litters per year. Permission for this expansion has been granted by the Board of Investment. [6] 

Universal Adsorbents & Chemicals Co Ltd: Universal Adsorbents & Chemicals Public Company Limited engages in the import and distribution of chemicals, catalysts, base oils, and equipment in Thailand and internationally. It primarily offers products for use in various industries, including off-shore natural gas exploration and production, oil refinery and upstream petrochemicals, engine oil lubricant manufacturing plants, polymer and plastic manufacturing plants, chemical industrial plants, power plants, and utilities systems. The company was founded in 1985 and is headquartered in Bangkok, Thailand. [7] 

D.B. Chemical Industrial Co Ltd: It is founded in 1983; D.B. Chemical Industrial Co Ltd. is a joint venture between Taichung Chemical and Chareonsin Group, and manufactures adhesives, plastic compounds of international standard for wire and cable industries. Our products have wide applications in various industries including the automotive, wire and cable, shoe, packaging, construction material and furniture industries. D.B. Chemical Industrial exports its products to major markets worldwide including Southeast Asia, the Middle East, North America and Europe. The company is committed to upgrading standards of production to reach that of an international level via modern technology and stringent quality control from foreign experts and skilful staff. [8] 

H.C. Starck Co Ltd: H C Starck Co Ltd is founded in 1993 by Hinsang and it’s is most leading petrochemical company in Thailand. It differentiate the entire chemical from the oil and produce chemicals, plastic etc which is very demanded in Thailand.

K. Cosmic Co Ltd: It is a Thailand distributor of a diverse range of innovative adhesive, building and renovating products the company epitomises the profile of a modern day market leader. We set the standards for other companies to follow. It produces Adhesives, Cleaners, Coatings, Concrete Additives, Miscellaneous Sealers, Timber Care, Waterproofing, Arts & Crafts, and Ranex Rustbuste.

A.T.M. Plastic Trading Co Ltd: ATM Company establish in 1996. ATM Industries is a self explanatory name for quality oriented, integrity powered company, aiming at excellence per any standards set forth by any competitor. We manufacture and market a selected range of plastic products, plastic cutlery, molded plastic, foam containers, PP woven sacks, Thermoforming and vacuum forming products and Blow molded items of world class quality. ATM Industries is fortunate that it has a committed team that is skilled, seasoned, and young. They are focused and dedicated to make ATM Industries a renowned, growing and leading company not only locally but globally as well, and also a responsible corporate citizen. In line with group strategy, we are committed to develop into a centre of excellence in plastic products and be a strong regional player. [9] 

American Petrochemical (Thailand) Co Ltd: American petrochemical Co Ltd is chemical producer & wholesalers in Thailand. Its multinational company in petrochemical and started in 1986. Its head office is in Bangkok, Thailand and it is one of the leading manufacturers of petrochemicals cosmetic in Thailand and they also export the petrochemicals in Asian country. [10] 

Contribution on in GDP

The chemical industry is regarded as one of the most important business branches of the Thai economy. Especially petrochemical companies are well positioned compared to international competitors. The Thai Industry Ministry assumes that about 7 percent of the country’s petrochemical businesses work within downstream processes that usually require low capital expenditures. Between 2004 and 2018 several programs of Thailand’s government for the petrochemical industry should bring public investments of around € 10 billion for the expansion of this industry. According to the Thai Office of Industrial Economics, the country’s economy has overcome the economy crisis within 2010. With a GDP growth of 8.0 percent in 2010, the country is among the fastest growing economies in Asia and during this time petrochemical industry contributes 5% in total GDP. According to Germany Trade and Invest, a market forecast for the chemical industry is, nevertheless, not easy since authorities and organizations only publish vague information about recent sales and production figures. The German foreign trade association expects a growing demand for chemicals in the country to boost the emerging economy. [11] 

Labour force Availability

There are 39.62 million labour forces in Thailand. In Thailand total unemployment rate of labour force is 1.04% which is less compare to other Asian country. This makes Thailand No. 102 in world rankings according to Unemployment in year 2010. The world’s average unemployment rate (% of Labour Force) value is 4.82 %; Thailand is 3.78 less than the average.

In the year, 2009, Unemployment Rate (% of Labour Force) for Thailand was 1.50 % Unemployment Rate for Thailand in 2010 was or will be 30.67% less than it was or will be in 2009.In the following or forecasted year, 2011, Unemployment Rate for Thailand was or will be 1.20 %, which is 15.38% more than the 2010 figure. When total labour force involved in petrochemical industry is 3.2% of whole working population which is very good in Thailand compare to other industry. [12] 

Raw Material Available

There are many types of raw materials are use in Petrochemical industry to produce chemicals products like Plastic, Fibbers, Lubricants etc, these raw materials are as below.

For producing Petrochemicals Polymers & Fibbers Petroleum Chemicals Healthcare need basic feedstock materials like Butadiene, Ethylene, Para-Xylene, Propylene.

Intermediate raw materials: Ethelhexanol, Acetic acid, Acrylonitrile, Ammonia, Bis phthalate, n-Butene, Cyclohexane, Dimethyl terephthalate, Dodecylbenzene, Ethanol, Ethanolamine, Ethoxylate, Dichloromethane, Ethylene glycol, Ethylene oxide, Formaldehyde, n-Hexene, Linear alkyl benzene, Methanol, Methyl tert butyl ether, Phenol, Propylene oxide, Purified Terephthalic acid, Styrene monomer, Urea, Vinyl acetate monomer, Vinyl Chloride Monomer. This all types of raw materials are not available in Thailand so Thailand Petrochemical industry Import this materials from USA, Indonesia, China and some other European country. [13] 

Political factors Affecting to Petrochemical Industry

There are many political factors affecting to the petrochemicals industry because Petrochemical industry are based on crude oil and crude oil is affected by national and world wide political factors. Recently the price of crude oil has increase constantly and its record levels of USD 125 per barrel so it directly affected by political factor in Thailand because Thailand is more than 60% crude oil imported from the other country so if political factors are favourable for import duty than it is good for petrochemical industry. Thailand Government is taking less duty on importing crude oil which is favourable for the Petrochemical industry. [14] 

Economic Factors Affecting to Petrochemical Industry

The global economic crisis still exists yet government reports still show that spend on import of crude oil continues to grow so its decrease the foreign currency investment of Thailand. The reduction in consumer disposable income will have an impact on those countries using petrochemicals products like plastic, fibber etc which decrease the growth of petrochemical industry. Petrochemical industry is extremely open; trade flows are large compared to production and there is considerable overlap between oil production and refining internationally, and to some extent in Thailand. Thailand currency are low compare to dollar so import of oil is very expensive which directly affect to the Petrochemical industry and increase the expenses of import of that industry. [15] 

Technology Factors Affecting to Petrochemical Industry

Technological advancements will create new business prospects both in terms of new systems and service provisions and technological factors improve the success of Petrochemical industry in Thailand. Timely, hands-on guide to technological issues and regulatory standards for the petroleum industry Technological analysis and testing methods are an integral part of any current and future refining activities. Today’s petroleum refining industry must be prepared to meet a growing number of challenges, both environmental and regulatory. Environmental Analysis and Technology for the Refining Industry focuses on the Analytical issues inherent in any environmental monitoring or cleanup program as they apply to today’s petroleum industry, not only during the refining process, but also during recovery operations, transport, storage, and utilization. Designed to help today’s industry professionals identify test methods for monitoring and cleanup of petroleum-based pollutants, the book provides examples of the application of environmental regulations to petroleum refining and petroleum products, as well as current and proposed methods for the mitigation of environmental effects and waste management.

An analysis of current and proposed methods of environmental protection and waste management. [16] 

Cultural Factors Affecting to Petrochemical Industry

Cultural factors directly affect to the Petrochemical industry because petrochemical industry are related to the chemical in which animals are use so in petrochemical industry animals are destroyed which affect negatively on culture of Thailand because Thailand people believe animals are life saver of us. Petrochemical products are harm to the people lives of Thailand so people are not easily ready for purchasing these products so petrochemical need to give more advertisement for selling the products which increase the expenses. The increasing aging population offers a range of opportunities and threats to the petrochemical industry in Thailand. The trick will be to capitalise on the opportunities. There is also the problem of the increasing obesity amongst the population and its associated health risks of Thailand people. [17] 

Legal Factors Affecting to Pharmaceutical Industry

Petrochemical products are related to health so it needs proper legality. So when people purchase petrochemical products they got security against petrochemical products for health, so for that Thailand government make many legal decisions like when people go to purchase petrochemical products they got pay bill from distributor for environment safety.

Threats

Legal requirements for petrochemical become onerous.

Consumers fail to gain confidence in the use of petrochemical products.

Petrochemical accentuates consumers buying on price.

Petrochemical Industry opens the flood gates to foreign insurers.

Opportunities: Developments in Petrochemical Industry, especially in Fibbers & plastic, and acceptability by Consumers and regulatory authorities, provide opportunities to deliver low cost products. [18] 

Environmental Factors Affecting to Petrochemical Industry

There is a growing environmental agenda and the key stake holders are now becoming more aware of the need for businesses to be more proactive in this field. Petrochemical companies need to see how their business and marketing plans link in with the environmental issues. There is also an opportunity to incorporate it within their Corporate Social Responsibility programmes. Marketing and new product development should identify eco opportunities to promote as well. Petrochemical companies use less pollution produce equipment in the production department for save the Environment.

Suppliers for Petrochemical Industry

In Petrochemical industry many type of raw materials are use so for that Petrochemical industry need different suppliers in different raw materials this different suppliers are as follow.

Anusorn Products ltd parts: supply Safety Shoes, Safety equipment, Back support, all safety products, and gloves. It is ISO 9001:2008 and its in Security & Protection category.

I-Born Supply & Service Co Ltd: supply Stainless steel Pipe & Fittings, pump, valve to the petrochemical companies.

BETCO: its supply Security & Protection category equipent

Environment Sphere: supply String Wound Polypropylene, Carbon Filter, PP filter, String wound Carbon Filter, Ceramic Filter

Elite Express International: this industry supply Sugar, Rice, Scrap Iron, Computer, Garments, Oil, scrap ship, Machinery, Bitumine, chemical

The Companion Corporation Co Ltd: produce Fabrication, Erection, Installation, Piping, Steel Structure

BSP Construction Co Ltd: it supply fabrication raw materials to the petrochemical industry

Foster EPC (Thailand) Co Ltd: this company are in installation in Petrochemical companies and supply fibber glass materials. [19] 

Present Position & Trend of Business with India during 5 years

India and Thailand business relation are very good. India & Thailand make one chamber for smooth business which name is India-Thai Chamber of Commerce (ITCC) which maintains business relation with India and Thailand. India-Thai Chamber of Commerce (ITCC) is an official organization assisting and serving businesses trading or investing between Thailand and India. They achieve this mission through various initiatives and events with the aim of enhancing cooperation between the two countries. India export raw materials for petrochemical companies to the Thailand from last many years and Thailand provide Plastic products to the India. In recent India- Thailand business of petrochemical are 120 us billion dollar which show the relation of two country but Thailand doe no do any business with Gujarat. [20] 

Import/Export Restrictions of Government for Petrochemical Industry

Thailand’s Petrochemical industry is governed by the Petrochemical Act of B.E. 2522 (1979) and subsequent laws stipulated by the Ministry of Public petroleum. In general, imports of petrochemical products for sale in the Kingdom require an import license and standard labelling according to domestic regulations. Product registration is required only for specifically-controlled products like special Plastic & Fibber. Some agencies of the Ministry of Petroleum and Cooperatives monitor the importation of certain Petrochemical products such as Fibber, Plastic, Lubricants and some other Chemical through import permits and phytosanitary or sanitary certificates. In addition Thailand Government have no restriction on export of petrochemical products. [21] 

Trade Barriers for Petrochemical Industry

High tariff is the major barrier for the petrochemical products to enter in Thailand. Product with high tariff includes agriculture product, automobile and auto parts, spirit and beverages, textile, paper and paper bond and some petrochemical products like Plastic, Fibber etc.

Tariff escalation exists in Thailand, unfinished and intermediate products have higher tariff than finished products. Thailand Levis 5% of tariff on most primary products, 10% on intermediate products and 20% on finished products generally and 30% on those special goods which need protection.

Thailand implements tariff related quota management for different industries like petrochemical, agriculture, electronic, etc. Low tariff is implemented within the quota and high tariff is implemented outside of the quota. China will closely follow the process of tariff concessions in Thailand.

Import control

Import permit: Nowadays Thailand imposes import permit management on 26 different categories of products including raw material, petroleum, industrial material, textile, medicine and agricultural products. Some products are also needed some special permission for import the goods in Thailand. Thailand import permit management is one major barrier certain foreign products to enter it.

Seasonal Import Control: Thailand government relatively opened of forage material in assurance of permit, e.g. Plastic, Fibber; other requirements are added in issuing permit. For example import of Plastic car can only be done in March and June month of the year.

Technical Trade Barrier

Mandatory certification [22] 

Trade norms of Indian Government for Petrochemical Industry

Petrochemical Act and its Amendment: The Indian Petrochemical Act no. 30 of 1934 dated 6th september was consolidate and amend the law relating to the import, transport, storage, production, refining and blending of petroleum and petrochemical products. The administration of the Act in 1934 was vested in a Committee called “Petrochemical Licensing Committee” which consisted of a Chairman appointed by the Central Govt. and 14 other members of which 10 were nominated by the Industry and 04 elected from the constituencies embodied in the Act.

Chemicals & Petrochemicals Manufacturers Association (CPMA): CPMA is the apex forum of the petrochemical producers in India. Established in 1993, the Association offers the members a podium to collectively present their ideas, voice concern and offer suggestions on relevant issues and control the petrochemical industry in india. [23] 

Import and Export of Petrochemical in India

Total export earnings reached USD 1.5 billion in 2011a historical high contributing 9% of the nation’s foreign exchange. Total Production of Petrochemical products in 2011 was US $728.4 million and in which Import of Petrochemical products in India from Thailand is US $186.14. Where export fiber and plastic in Thailand from India of US $437.6 million in 2010. [24] 

Business Gap in existing market

There are various challenges for a Petrochemical industry in today’s time because today Raw materials of petrochemical products like crude oil become very expensive which increase the cost of raw material for petrochemical industry. Due to European recession and US crisis demand of petrochemical products decrease constantly in 2011.

Business opportunity in future

There are promising opportunities for Thailand petrochemical Industry, which is expected to grow significantly in the future especially since the per capita consumption of synthetic fibber and plastic in Thailand is much lower in comparison to the global average. The petrochemical industry in Thailand produces more than 7% of the global petrochemical output. The demand facilitators for the petrochemical industry include rapid urbanization, new products introduction, substitution of products, and dynamics of the domestic market.

The government of Thailand has provided satisfactory infrastructure to the Thailand petrochemical industry. As this industry needs a special kind of infrastructure, it is one of the major areas of development for the government to undertake. With the approval of the policy of Investment Regions for the Petroleum, Chemical, and Petrochemical, this has become easier. The infrastructure would act as a gear to the growth of the industry. It would also add the advantage of grabbing the emerging opportunities in the petrochemical industry. [25] 

Conclusion