Proposed SCGC-PTTGC Project Seen Delivering Annual Benefits of Up to $200 Million
Key Facts
Siam Cement said in a stock exchange update dated October 28 that its subsidiary SCG Chemicals, known as SCGC, and PTT Global Chemical, known as PTTGC, had agreed on the essential terms and main framework for a proposed strategic joint venture. The companies estimate the project will deliver recurring annual operating benefits of $150–200 million, or 5.1–6.8 billion baht, once completed. These figures are not the value of the deal, but estimates of expected annual benefits. The project remains proposed, as it requires approval from shareholders and the relevant regulators. The announcement therefore marks progress in negotiations, while completion of the deal remains uncertain.
Under the proposed plan, PTTGC would hold a 56% stake in the joint venture, compared with 44% for SCGC. The assets and businesses being considered for combination include both companies’ Thai olefins and polyolefins operations, as well as their investments in joint ventures. These assets include PTTGC’s stake in HMC Polymers and SCGC’s polyethylene and polypropylene facilities. The scope brings existing businesses and assets in Thailand under a joint structure, according to details published about the proposed package. The ownership stakes and assets cited remain part of the proposed arrangement until approvals are secured and the deal is completed.
The companies attribute the expected benefits to strengthening downstream businesses and product markets, improving feedstock and supply-chain management, and increasing operating and maintenance efficiency. They said the project would enable "stronger downstream businesses, improved feedstock and supply-chain management, and more efficient coordination of operations and maintenance." PTTGC provides upstream production capacity, along with access to competitive feedstocks through integration with refineries and integrated infrastructure. SCGC adds its expertise in downstream manufacturing, product diversity, and high-value technologies and products. Based on these details, the estimated benefits stem from integrating the companies’ operations and improving production-chain and operating management.
The proposed structure would change how Siam Cement accounts for its investment once the project is completed. It would treat its stake in the combined business as an associate, using the equity method. The relevant olefins and polymers assets in Thailand would no longer be consolidated into its financial statements after the arrangement is completed. This makes the accounting treatment one aspect that would change as the business is transferred to the joint venture. Applying the arrangement remains contingent on completion of the deal, which is still awaiting the required approvals.
The companies plan to send an invitation to an extraordinary shareholders’ meeting on November 18, 2026, with the meeting to be held on December 3 to consider approval of the deal. They then aim to submit applications for approval to Thailand’s Trade Competition Commission and other regulators during the first half of 2027. The schedule targets completion of the deal and establishment of the joint venture in the second half of 2027, subject to the required approvals. These include shareholder and regulatory approval, making those steps conditions for proceeding with the arrangement. On October 28, PTTGC shares closed at 51 baht, down 3.25 baht, or 5.99%, according to Stock Exchange of Thailand data.