NO wonder today it up pang pang sheng.
Petronas Chemicals Group Bhd (PCG), a leading integrated petrochemical producer in Southeast Asia, is in a "very strong" position to execute more acquisitions as the company's available cash position reaches RM8 billion. "When you're sitting on a big cash pile, it helps a little with how you grow your business. We're going to have selective opportunistic acquisitions along the way," said its president and chief executive officer, Dr Abd Hapiz Abdullah. He said PCG was currently in talks with several parties with regard to other avenues for expansion, but these were still at the "very preliminary stage". "We're very flexible in the discussions, and it all depends on how it suits us and fits our whole objective of growing the business," he told reporters taking part in the Media Familiarisation Trip to PCG operations in Kertih, in the oil-rich state of Terengganu, on Thursday. In 2009, PCG reached an agreement with the Dow Chemical Company to acquire its entire stake in the Optimal Group of Companies, for US$660 million. Last year, it completed the acquisition of BP's 15 per cent and 60 per cent interests in Ethylene Malaysia Sdn Bhd and Polyethylene Malaysia Sdn Bhd respectively, for US$363 million cash. "We were able to complete both strategic acquisitions quite timely and quickly without going to the market to raise funds," said PCG chief financial officer, Wan Shamilah Saidi At the moment, there is "no firm plan" or timeframe for this so-called "selective opportunistic acquisition", she added. Meanwhile, Abd Hapiz said demand from Asia Pacific consumers in the chemical industry would be relatively flat in the next 12-24 months due to the uncertainty over the pace of economic recovery. He said China and India seemed to be holding up "quite well", with active demand seen to be the case for Vietnam and Indonesia. "Unfortunate calamities that hit Japan would only generate some short-term demand in the construction sector. "Demand for chemical products continues to be high in Malaysia and very healthy. Overall, we're quite comfortable going forward," he added. PCG is the fourth largest producer of methanol by volume in the world. It is also Southeast Asia's third largest producer of urea by volume. On the feedstock price volatility, Wan Shamilah said the gas price paid by PCG to its parent, Petronas Group, was based on the pricing structure fixed in a long-term contract between both. Meanwhile, the revision of the regulated gas tariff announced by the government on May 30 would have minimum impact on the company as from June 1 until December 31, PCG will require only 7.0 million mmbtu (million British thermal units). Recently, the government announced a gas price hike to the power sector from RM10.70/mmbtu (million British thermal units) to RM13.70/mmbtu. -- Bernama