PETRONAS Chemicals Group Berhad (PCG) held its 22nd annual general meeting (AGM) virtually today to present the Company’s performance to its shareholders for the financial year ended Dec 31.
In 2019, the Company sustained best-in-class plant utilisation rate at 92 percent 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). PCG also attained world-class level of order fulfillment reliability at 97 percent up from 93 percent in 2018. Consequently, PCG recorded high sales volume at 8.4 million tpa comparable to that of 2018.
“This achievement comes as a result of PCG’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.
PCG closed 2019 with a Profit after Tax of RM2.8 billion. In line with the Group’s dividend policy, for FY2019, PCG declared a total dividend of 18 sen or RM1,440 million, translating into a dividend payout ratio of 51.2% of Profit after Tax and Non-Controlling Interests (PATANCI).
On PCG’s growth strategy, Datuk 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, PCG 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, PCG has a ready-made business in high-growth end markets such as personal care, coatings, construction and healthcare. This will open PCG 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, PCG 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.
“The Covid-19 pandemic and OPEC+ fallout have heightened economic as well as market uncertainties. Product prices will generally remain under pressure in this difficult environment. It is imperative that we remain resilient as we face the full impact of the pandemic and subsequent economic downturn. We are confident that our strong fundamentals will take us through this challenging period,” concluded Sazali.