Titan committed to growth in Malaysia


  • Business
  • Saturday, 04 Jan 2003

By P.W. THONG in Houston, Texas

TITAN Petrochemical & Polymers Bhd is fully committed to the development of the Malaysian petrochemical industry. 

According to Titan vice-president (corporate affairs) and company secretary Francis Pereira, its petrochemical and polymer facilities have become important resourcetowards meeting the growing demand for petrochemical and plastic products in the Malaysian and the Asian markets. 

Towards that end, Pereira said, the group’s close cooperation with its sister company Westlake Corp in the US had not only benefited Titan, but also the Malaysian petrochemical industry as a whole. 

He said Titan and the local petrochemical industry had also benefited strongly from the global reach of Titan’s major shareholder, the Chao Group International.  

According to Pereira, Titan’s growth also has paved the way for substantial import substitution, export earnings and more rapid development of the highly export-oriented downstream fabrication sectors. 

Titan built the country’s first and largest integrated petrochemicals complex, which was also the first to produce olefins and polyolefin. Polyolefin is the most important building block for the fabrication industry. 

Today, Titan is the biggest private petrochemical company in Malaysia, and the second biggest largest single site polyolefin producer in South East Asia, with annual combined capacity reaching almost one million tonnes.About half its output is consumed locally, and the remainder exported, mainly to China and other Asean countries. 

Titan is also the largest investor in Johor, having invested some RM5.5bil worth of petrochemical, polymer and co-gen facilities in Pasir Gudang and Tanjung Langsat.  

Titan is a joint venture company between the Chao group (which owns a 53.2% stake), Permodalan Nasional Bhd (45.5%) and SC Polymer Inc, a US subsidiary of China Nasional Chemical Import and Export Corp (1.3%). 

The Chao group is a privately held conglomerate, producer and marketer of petrochemicals and plastics.  

Apart from Titan group, the Chao group owns the Westlake group of the United States and Canada, as well as some affiliated operations located primarily in Taiwan and China. 

Pereira said Titan shared the aim along with Westlake for disciplined, sustained growth coupled with strong, long-term profitability and customer focus. 

He said the group’s growth strategy was market driven and was based on a disciplined investment programme that enabled Titan to reap the economies of scale.  

The Westlake group owns and operates facilities for the manufacture of petrochemicals, plastics, and fabricated plastic products in North America, with sales on a global basis.  

The group manufactures and markets annually more than 7 billion pounds of the world’s most widely used commodity petrochemicals and polymer products. 

Westlake senior vice-president David R. Hansen said the integration of commodity petrochemicals and intermediates to polymers and fabricated plastic products had been a key growth strategy for the Westlake group. 

Currently, the group’s operations in North America consist of three major divisions, namely, olefins, vinyls and fabricated plastics. 

According to Hansen, Westlake group’s global presence is enhanced through its association with its sister company, Titan group.  

He said one typical feature between West- lake and Titan group was that both groups had access to several state-of-the-art manufacturing techniques that allowed optimum balance between capacity and costs. 

He said that apart from sharing technical resources the two groups also shared human resources, and market information, which allowed further synergies to be created. 

But there are also distinctive differences between Westlake and Titan, according to Hansen, one being cost structure. 

For example, in the US, there is a sophisticated network of transportation pipelines spaning into thousands of miles. 

These pipelines, jointly owned by large oil and petrochemical companies such as Union Carbide and Shell, can further drive down transportation costs to boost margins. 

“Our ethylene plants are connected via a network of pipelines to other Westlake group facilities for further downstream process and to our customers across the region. By leasing the pipelines from Union Carbide’s & Shell’s ethylene pipeline systems, we are able to deliver and source ethylene throughout the Te -xas/Louisiana Gulf Coast, and lower our overall delivery cost, whereas for the rest of the world, ethylene has to be shipped in small volume and stored under cryogenic temperatures which could raise costs. 

The ethylene plants are an important part of the Westlake group’s vertical integration strategy. It supplies feedstock for low-density polyethylene (LDPE) produced by Westlake Polymers Corp, vinyl chloride monomer produced by Westlake Monomers Corp, and styrene monomer produced by Westlake Styrene Corp.  

This vertical integration is not only economically advantageous, but also assures a reliable supply of high-purity feedstock to the downstream industries. 

In fact, Hansen said, there was no better way to establish an operating foundation for continuous creation of synergistic effects in the groups’ businesses than to be vertically integrated. 

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