KUALA LUMPUR: Lotte Chemical Titan Holding Bhd (LCT) is optimistic that its financial performance in the second half of 2023 (2H 2023) will improve, supported by the reopening of China’s borders in early 2023.
President and chief executive officer Park Hyun Chul said that although the company had seen a slight uptick beginning in January, the progress, in terms of demand, has been moving slower than expected.
He said that market conditions are volatile as there are additional players, the regional gross domestic product growth is slower than expected, as well as cost and inflationary pressures as oil prices increase.
"Oil prices are linked to our feedstock cost as it comprised 80 per cent of the cost.
"However, we can see that our margin is slowly widening. Thus we expect better performance in the 2H 2023,” he told reporters on the sidelines of the memorandum of understanding (MoU) signing ceremony today between Lotte Chemical Titan (M) Sdn Bhd and Polymateria Ltd to jointly develop products incorporating next-generation biodegradable plastic resin.
Park said other players in the petrochemical industry are also facing the same situation where the supply and demand cycle of the industry is currently on a downturn after previous profitable years.
Nonetheless, he believed it would soon make a U-turn and return to normal.
"Even though we are having challenging times this year, we can still keep the situation (under control). We are financially resilient. We have zero borrowings and net cash of over RM600 million,” he said.
Park said that the company had taken measures such as cost management and optimising operating rates by bringing it down to 75-80 per cent to improve efficiency and lower costs.
"We are continuing ongoing research and developments to enhance product quality while building strong relationships with customers and partners for new products,” he said.
Park said three to four new products would be introduced into the market this year, namely high-density polyethylene (HDP) pipes, while the rest are still undergoing testing and obtaining approval certification.
"The company’s business portfolio comprises 80 per cent polymers, and the remainder is monomers,” he added. - Bernama
