FACTBOX-Companies affected by Thai industrial estate ruling

Feb 17 (BestGrowthStock) – A court ruling has halted 64 projects at
the world’s eighth-biggest petrochemicals hub over
environmental concerns, a ruling that has shaken investors’
confidence and raised questions about legal certainty and
government effectiveness in Thailand.

The freeze comes amid increased uncertainty in Southeast
Asia’s second-biggest economy over a political crisis that is
heating up ahead of a big push by lawmakers and protesters
seeking to topple the government, putting markets on edge.

Some analysts warn that the standoff over the Map Ta Phut
industrial estate could stifle future investment in Thailand
and damage its reputation as a stable place for foreign
businesses.
(For a related analysis [ID:nSGE617077 and Q+A
[ID:nSGE617075])

Following are major companies affected by the ruling:

* PTT (PTT.BK: )

Thailand’s largest publicly listed company and dominant oil
and gas firm owns 25 projects worth roughly $3.9 billion in the
zone. Of these, seven can proceed as normal.

State-controlled PTT said most of its 25 projects,
including its sixth gas separation plant, should be able to
operate because they received licences before the
constitutional changes in 2007 that altered health and
environment rules. It has lodged an appeal with the court to
get the go-ahead, or at least allow construction to continue as
planned.

PTT has twice delayed consolidation plans aimed at cutting
costs and boosting efficiency, underlining the widening
financial toll from the row. [ID:nSGE61A081]

The freeze on the gas separation plant means Thailand will
need to import 1.7 million tonnes of liquefied natural gas this
year. PTT has been promised compensation from the government
for an estimated loss of 8 billion baht as a result of the
delay.

* SIAM CEMENT (SCC.BK: )

Thailand’s largest industrial conglomerate said 18
projects, mostly petrochemical operations involving a total
investment of 57.5 billion baht ($1.74 billion), would be
suspended.

Projects on hold at its Thai Plastic and Chemicals (TPC.BK: )
subsidiary include a PVC resin expansion project line 8 and 9
and a VCM expansion project for plant 1 and 2, representing
investment worth 280 million baht ($8.5 million).

Petrochemicals generally make up almost half of profits at
Siam Cement, which is 30 percent owned by the Thai royal
family’s Crown Property Bureau.

* VINYTHAI (VNT.BK: )

The country’s second-largest polyvinyl chloride (PVC) maker
said the ruling would delay an expansion project of
Chlor-alkali and the upgrade of a Vinylchloride plant.

* Foreign companies affected include a Thai unit of
Germany’s Bayer (BAYGn.DE: ), India’s Aditya Birla Chemicals
(ADYA.BO: ) and Australia’s BlueScope Steel Ltd (BSL.AX: ). One of
Aditya Birla’s projects was allowed to go ahead.

Among the projects affected are a series of joint ventures
between Thai companies and foreign partners, including Siam
Yamato Steel, a venture of Siam Cement and Yamato Steel, and
MTP HPPO Manufacturing, a 50-50 venture between Dow Chemical
(DOW.N: ) and Siam Cement.

Others include a joint venture between Siam Cement and
Mitsui Chemical Inc (4183.T: ), and one between PTT, Japan’s
Asahi Kasei Chemical Corp (3407.T: ) and Japan’s Marubeni Corp
(8002.T: ).

Japan’s Ube Nylon (Thailand), a unit of Japan’s Ube
industries Ltd (4208.T: ), also operates there.

In Thailand, Ube Group produces caprolactam, an organic
compound used to make nylon, and synthetic rubbers, mostly used
in the car industry.

Stock Market Report

(Compiled by Ploy Ten Kate; Editing by Jason Szep)

FACTBOX-Companies affected by Thai industrial estate ruling