COMPETITIVE GROWTH

Malaysia 2019 | ENERGY | INTERVIEW

PCG is focusing its efforts on maintaining its competitive position and continuing to provide sustainable value creation.

Datuk Sazali Hamzah
BIOGRAPHY
Datuk Sazali Hamzah has been the Managing Director & CEO of PCG since 2014. His 20-year career began in 1990 as a process engineer at PETRONAS Penapisan (Terengganu) Sdn Bhd. He progressed through multiple areas holding various senior management positions in the refinery and petrochemicals business at PETRONAS. He also sits on the board of various PETRONAS subsidiaries. Datuk Sazali holds a bachelor’s of chemical engineering from Lamar University, US. He also completed the PETRONAS Senior Management Program from London Business School as well as the PETRONAS Advance Management Program from The Wharton School, University of Pennsylvania. His vast experience, technical excellence, leadership skills, and commitment earned him a Chartered Fellowship of the Institution of Chemical Engineers (IChemE).

What is your outlook for commencement of commercial operations from the RAPID project?

The complex has progressed as planned. To date, we are still maintaining our target to commence commercial operations in 4Q2019. Our current production capacity stands at 12.8 million tpa. Upon commercial operation of PIC, our total production capacity will increase to 14.6 million tpa. Once the petrochemical projects in Pengerang Integrated Complex (PIC) come into operations, it will not only strengthen PETRONAS Chemicals' ability to be flexible and reliable in meeting customers' needs, but also bolster the company's position as the second largest MEG producer. We will also introduce isononanol to our product offering, and with 250 kilotons per annum production, this will position us as the second-largest isononanol producer in Southeast Asia.

What is your strategy to grow PCG's specialty chemicals activities?

Global consumption of specialty chemicals is expected to increase in volume at an average annual rate of nearly 3.5% in emerging countries from 2016 to 2021. Among these countries, China is expected to have the highest regional growth rate in the said period. Overall, the emerging markets offer more dynamic prospects for the specialty chemicals industry because of rising consumer-driven economies and industrialization. PCG is now well positioned to pursue the second prong of its strategy by diversifying its portfolio into derivatives and specialty chemicals to future-proof its business. In the medium to long term, the chemicals industry is projected to grow about 4% CAGR, and PCG's goal is to maintain its growth at a faster pace than the industry, with the aim of double its earnings. Our growth levers beyond 2020 will include extending the value chain by maximizing value from molecules in PIC and existing complexes. PCG is also targeting building upon the specialty platform by venturing into attractive segments based on future megatrends. This can be realized via M&A or partnering. Investment in innovative and breakthrough technologies through internal R&D and corporate venture capital are also being pursued.

What are your expectations for market demand for chemicals in Southeast Asia, and what catalysts for growth do you see?

The combination of a growing global economy, technology development, and megatrends such as urbanization, rising population, and affluent consumers will result in increasing demand for chemical solutions. Oil and gas companies are increasingly pursuing integration along the chemical value chain as well as diversifying their portfolios into specialty chemicals. The volatility of the global economy will also have an impact on demand growth across all energy and petrochemical markets. Nevertheless, the supply and demand of the petrochemicals industry is expected to remain robust in 2019. Coupled with continuously strong Asia Pacific GDP growth, the industry will remain competitive. As a key player in the Asia Pacific petrochemicals market, PCG will be ready to take advantage of opportunities that arise and weather challenges by focusing on its efforts to maintain its competitive position and continue to deliver on its strategic priorities for sustainable value creation. We will continue to prioritize our operations and commercial activities, as we drive our productivity and efficiency group-wide. In 2019, the global economy is projected to expand moderately, following slower growth in both advanced and major emerging market economies. Over the longer term, demand for petrochemicals is anticipated to strengthen, thus presenting us with exciting new options to drive sustainable growth. Asia's increasing middle-class population with significant discretionary spending power is expected to lead to higher demand of sophisticated and multipurpose consumer products such as personal care, nutrients, and pharmaceuticals. There will also be an increasing need for modern and efficient living where chemicals are needed to expedite the construction of buildings and drainages. The increasing global connections will also have a big impact on packaging and transportation sectors and will drive chemicals as solutions for durable plastic packaging and lightweight and high-strength automotive plastic parts.