KUCHING: Petronas Chemicals Group Bhd (Petronas Chemicals) held its 22nd annual general meeting (AGM) virtually yesterday to present the company’s performance to its shareholders for the financial year ended December 31, 2019.
The AGM was chaired by Petronas Chemicals chairman, Datuk Md Arif Mahmood, who is also Petronas executive vice president and chief executive officer of downstream, together with Petronas Chemicals managing director/chief executive officer Datuk Sazali Hamzah and chief financial officer Rashidah Alias.
During the AGM, Sazali shared with the shareholders on the Company’s performance and operations in 2019, its growth plans as well as outlook for 2020.
In 2019, the Company sustained best-in-class plant utilisation rate at 92 per cent despite undertaking one of its most intensive plant turnaround programmes. As a result, it sustained high production volume at 10.4 million tonnes per annum (tpa). Petronas Chemicals also attained world-class level of order fulfillment reliability at 97 per cent up from 93 per cent in 2018. Consequently, Petronas Chemicals recorded high sales volume at 8.4 million tpa comparable to that of 2018.
“This achievement comes as a result of Petronas Chemicals’s continuous focus on effective plant reliability and turnaround strategies, coupled with collaborative efforts with our suppliers and vendors to ensure supply chain efficiency.
“On the commercial front, we strive to understand our customers’ needs and develop customised solutions to resolve their pain points as well as help grow their business. Moving forward, we aim to attain operational and commercial performance in 2020 that is comparable to 2019,” said Sazali.
Petronas Chemicals closed 2019 with a Profit after Tax of RM2.8 billion. In line with the Group’s dividend policy, for FY2019, Petronas Chemicals declared a total dividend of 18 sen or RM1,440 million, translating into a dividend payout ratio of 51.2 per cent of Profit after Tax and Non-Controlling Interests (PATANCI).
On Petronas Chemicals’s growth strategy, Sazali explained, “We continue to pursue our two-pronged strategy to deliver sustainable long-term growth for our business; namely to sustain our strength in basic petrochemicals; and to diversify into derivatives as well as specialty chemicals and solutions to add value to customers and benefit from higher margins. We also aim to deliver incremental value through the expansion of our portfolio.”
Towards this end, Petronas Chemicals acquired Da Vinci Group (DVG), the world’s largest independent producer and formulator of silicones, lubricant oil additives and chemicals. With DVG in its fold, Petronas Chemicals has a ready-made business in high-growth end markets such as personal care, coatings, construction and healthcare. This will open Petronas Chemicals to new markets and customers, further expanding its geographical footprint.
“Our Pengerang Integrated Complex (PIC) petrochemical project is another platform to provide further growth opportunities in derivatives and specialty chemicals. We are gearing for full start-up towards commercial operations. However, this will depend on how the market recovers from the pandemic,” added Datuk Sazali.
Further accelerating its growth agenda, Petronas Chemicals also achieved two Final Investment Decisions (FIDs) for the development of a butadiene derivative plant in PIC and a specialty chemicals plant in Kertih Integrated Petrochemical Complex (KIPC).
“This will enable the group to move across the value chain and get closer to its end users, effectively bringing it closer towards becoming a total solutions provider.”