The Siam Cement Group (SCC) and The Dow Chemical Company (DOW) have finalized the propylene-rich naphtha cracker investment in Thailand, as a result of the Board approval at both SCC and DOW. Following the final agreement with contractors and suppliers, the total cost of the naphtha cracker will amount to $1.2 Billion (from $1.1 Billion earlier). With commercial operation slated for H1/10, SCC will hold a 67% stake in the project, while DOW will hold the other 33% stake.
The naphtha cracker will have an annual olefins capacity of up to 1.7 million tons (ethylene 900,000 tons and propylene 800,000 tons), and other products of up to 700,000 tons. Utilizing proven olefins conversion technology which maximizes propylene output, the cracker will generate 75% more propylene than its existing naphtha cracker. Market outlook for propylene is for continued supply tightness, as a large majority of the new olefins plant additions will be gas-based capacity from the middle-east which will have very little propylene and by-products capacity.
In addition, SCC will also be moving ahead with its earlier announced downstream expansion. Integrated into the second naphtha cracker, the $450 Million (up $50 Million from $400 Million earlier) wholly owned downstream operation with a capacity of up to 800,000 tons will comprise of HDPE capacity of 400,000 tons (up 100,000 tons from 300,000 tons earlier), and PP capacity of 400,000 tons. Slated for a H1/10 start up, the downstream operations will emphasize the production of non-commodity products that generates higher margins, while leveraging SCC?s existing domestic and regional distribution network.