Sunday, June 12, 2011

Petronas Chem on acquisition trail

Business Times

Petronas Chem on acquisition trail

By Zaidi Isham Ismail

The selective acquisition could be in the setting up of a new plant, joint ventures or buying stakes in other firms, says Petronas Chemicals president
Kertih: Petronas Chemicals Group Bhd, which has a war chest of RM8 billion, is eyeing strategic acquisitions in the country and the region to consolidate its position as one of Southeast Asia's largest integrated petrochemical producers.

Petronas Chemicals president and chief executive officer Dr Abd Hapiz Abdullah said the expansion plan will be selective and synergistic as well as add growth, value and competitiveness to the group.

"The selective acquisition could be in the setting up of a new plant, joint ventures or buying stakes in other firms.

"We are talking with several parties right now but they are at a very preliminary stage.

"Rest assured, this is part of our reinforced commitment and strategy to grow our business," Abd Hapiz told some ten visiting jounalists here at its sprawling 5,000ha complex on Thursday.

Abd Hapiz said Petronas Chemicals is flexible when it comes to holding discussions but it will all depend on how to set objectives on growing its business.

"Sitting on a big cash pile helps a little bit on how you look at growing the business. We are going to have selective opportunity acquisitions in the future," he said.

Petronas Chemicals is the chemical arm of national oil and gas corporation Petroliam Nasional Bhd (Petronas).

The group floated its shares on Bursa Malaysia last November, raising RM12.8 billion which is Southeast Asia's largest initital public offering to date.

Established in 1985, Petronas Chemicals has 22 subsidiaries. They comprise wholly-owned and partly-owned subsidiaries, joint ventures and associate companies which it has been forging in the past 26 years.

These include its US$660 million (RM1.99 billion) purchase of Optimal group of companies in 2009 from US-based Dow Chemical Co, the world's oldest chemical company.

Last year, Petronas Chemicals bought UK-based BP plc's 15 per cent stake and 60 per cent interest in Ethylene Malaysia Sdn Bhd and Polyethylene Malaysia Sdn Bhd, respectively, for a combined US$363 million (RM101 billion) cash.

Petronas Chemicals chief financial officer Wan Shamilah Saidi said the group was able to make both purchases in a timely and quick manner without going to the market to raise funds.

The group has no firm plans and a timeframe on its selective opportunistic acquisitions.

After the listing, Petronas Chemicals is a 64.4 per cent subsidiary of Petronas with a market capitalisation of over RM47 billion.

It is one of Bursa Malaysia's top 15 companies and a component of the FTSE Bursa Malaysia Kuala Lumpur Composite Index.

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