Thai Plastic and Chemicals Public Co. Ltd. has begun work on a 180.4 million-pound-per-year PVC plant expansion in Vietnam, but has withdrawn from buying a stake in another Vietnam-based PVC plant.
TPC is not proceeding with an agreement to acquire 43 percent of Phu My Plastics & Chemicals Co. Ltd. for $13.1 million from state-owned oil and gas company PetroVietnam, based in Hanoi.
TPC and PetroVietnam could not come to terms and have terminated the deal, which they announced in September.
However, TPC has started work on a $40.9 million PVC resin expansion joint venture, TPC Vina Plastic & Chemical Corp. Co. Ltd., in Dong Nai. TPC owns 70 percent of TPC Vina. Partners Vietnam National Chemical Corp. and Vietnam National Plastics Corp. each own a 15 percent stake.
TPC is relocating some equipment to the venture from its 40-year-old Samutprakarn, Thailand, plant, near Bangkok.
A company spokesman said the older plant is being shut down because of higher operating and maintenance costs and environmental issues. TPC expects the expansion to be completed by 2009, raising capacity to 419 million pounds a year.
In Thailand, TPC has nearly completed an expansion at processing subsidiary Nawaplastic Industries Co. Ltd. in Rayong.
A $70.3 million line addition has increased PVC pipe and fittings production at Nawaplastic by 88 million pounds to 353 million pounds annually.
Meantime, PetroVietnam has agreed to transfer its 43 percent stake in Phu My Plastics to a subsidiary of Petroliam Nasional Berhad (Petronas), Malaysia's state-owned gas and oil company.
The deal will raise Petronas' stake in Phu My Plastics to 93 percent. Vung Tau Shipyard Co. in Vung Tau, Vietnam, will hold the remaining shares.
The parties are in the final stages of formalizing the necessary documents, which must be approved by the Vietnamese authorities, according to Petronas.
Phu My Plastics owns and operates a 220 million-pound-per-year PVC plant in the Ba Ria Vung Tau province, southeast of Ho Chi Minh City. The firm markets its PVC in Vietnam and overseas.