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