boosting competitiveness in south east asia · boosting competitiveness in south east asia anon...

Boosting Competitiveness in South East Asia

Anon Sirisaengtaksin CEO

PTT Global Chemical PLC.

•  ASEAN – a rising region but challenging to address

•  CHEMICALS – at the forefront of growth

•  PLAYERS – integrated in pool position

Outlines :

•  ASEAN – a rising region but challenging to address

•  CHEMICALS – at the forefront of growth

•  PLAYERS – integrated in pool position

Outlines :

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SOURCE: Global Insight; ASEAN Secretariat

Challenges ASEAN characteristics

1 Large and growing economy with GDP of USD 2 trillion, comparable to India

Large gap in economic development: Cambodia, Laos, Myanmar and Vietnam represent 28% of population but 9% of economy

Substantial market with 600 million population comparable to EU's

Diverse cultures and heritages with 100+ languages across the region 2

Region rich with natural resources including crude oil, gas and green feedstock

Varying levels of natural resources ranging from Singapore with almost none and Indonesia with ~3 Tcm of proved gas reserves 3

Increasingly integrated single market through AEC

Varying levels of export orientation with ~20% of GDP for Indonesia and 160% of GDP for Singapore 4

ASEAN a rising region…but challenging to address

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ASEAN one of the fastest-growing regions ASEAN will be the 5th largest economic region globally by 2050

Source : IMF Database 2011

Global GDP Outlook Percent

The Competitiveness Advantages in ASEAN

1. Labor productivity growth 2. Geographic proximity 3. ASEAN connectivity AEC integration

4. Middle class & urbanization 5. Rich in natural resources

6. ASEAN companies in world-ranking

1. Labor productivity growth ASEAN has a sizeable and fast-growing young working population.

2. Geographic proximity ASEAN is well positioned at the center of global trade and investment flows

3. ASEAN connectivity - AEC integration ASEAN countries are already starting to forge deep G2G links E-W corridor : Future booming area

with Thailand in the center

4. Middle Class & Urbanization Large and rapidly growing middle class,

the important driver of consumption spending

•  ASEAN – a rising region but challenging to address

•  CHEMICALS – at the forefront of growth

•  PLAYERS – integrated in pool position

Outlines :

Five sectors drive bulk of economic growth ….Four of which require chemicals.

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1 Includes real estate and construction 2 Includes education, health, and social services 3 2005 real terms adjusted using inflation factor of 1.4 for the 5 years

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Thailand, Indonesia, Vietnam, Malaysia and Singapore are the key markets today

SOURCE: Tecnon; FACTS; Platts; EIA; Worldbank; EIU

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Serving ASEAN markets requires a balanced strategy

Covers 7 polymers - PP, PE (HDPE, LDPE, LLDPE), PVC, PS, PET (PET fibers, PET resins) SOURCE: Tecnon; Global Insight (WMM)

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▪  Automotive –reduction of nontariff barriers in Vietnam, Indonesia, Thailand, and Malaysia driving increase in demand for motorcycles, and cars, boosting chemicals used in seats and tires

▪  Construction and real estate – increased activities in overall economy drives construction sector

▪  Wholesale and retail – reduction of protection for small local retailers gives rise to large regional retail operation with broader selection of goods

▪  Textile – increased collaboration among textile producers (e.g. Vietnam strength in garments, Indonesia in fabrics) creates low-cost ASEAN hub

Indirect impact

▪  Free flow of goods creates single chemical market for chemical producers regardless of location

▪  Free flow of capital increases ease of regional investments in production footprint

▪  Free flow of skilled labor increases staffing flexibility for regional player, but also competition for talent

▪  Transportation integration reduces complexity of regional supply chain

Direct impact

AEC impacts petrochemical and chemical industries in two ways

§  Identify and capture upcoming opportunities § Strengthen unique core competencies and value proposition

•  ASEAN – a rising region but challenging to address

•  CHEMICALS – at the forefront of growth

•  PLAYERS – integrated in pool position

Outlines :

Accessing ASEAN markets requires deep “insighter status”

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155th rank

118th

rank 135th rank 207th

rank

265th rank

373rd

rank

456th rank

125th rank

95th

rank!

Strong ASEAN presence

Big

Diverse Industries

PTT group has been an “insighter” over the last years

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PTT is fully integrated energy and chemicals company

PTT Global Chemical - The Chemical Flagship of PTT Group The flagship for PTT to drive growth

AROMATICS POLYMERS EO-­‐BASED  PERFORMANCE

GREEN  CHEMICALS

HIGH  VOLUME  SPECIALTIES  

[HVS]

-­‐   LPG  -­‐   Light  Naphtha  -­‐   Reformate  -­‐   Jet  A1  -­‐   Diesel  -­‐   Fuel  Oil

-­‐   Benzene  -­‐   Toluene  -­‐   Paraxylene  -­‐   Orthoxylene  -­‐   Mixed  Xylenes  -­‐   Cyclohexane

-­‐   Ethylene  -­‐   Propylene  -­‐   Mixed  C4’s  -­‐   PyGas

-­‐   HDPE  -­‐   LLDPE  -­‐   LDPE  -­‐   PS  

-­‐   Ethylene  Oxide  -­‐   Ethylene  Glycol  -­‐   Ethanolamines  -­‐   Ethoxylate

-­‐   BioplasQcs*  -­‐   Biochemicals  -­‐   Methyl  Ester  -­‐   FaSy  Alcohol  -­‐   FaSy  Acid  -­‐   Glycerin  -­‐   Specialty  Oleochemicals  -­‐   PlasQc  AddiQves

-­‐   Phenol  -­‐   Bisphenol  A  -­‐   Isocyanate  Products    (TDI  /  HDI  and  its  DerivaQves)  

REFINERY  &  SHARED  FACILITIES

OLEFINS  

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:Our 2020 global aspiration

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In Conclusion To succeed in ASEAN, companies will have to address three strategic issues:

Where to play - Country specific strategy - Granular market - Customer segments

How to play - Operating presence - Portfolio investment - Scope of manufacturing

How to execute - Acquisition - JV - Organization readiness and requirements