**Siam Cement Plans to Restart $5.4 Billion Petrochemical Plant in Vietnam**
Siam Cement Pcl is preparing to resume operations at its $5.4 billion petrochemical complex in Vietnam, as market indicators suggest that prices, which have been depressed due to oversupply, may have stabilized. The Long Son plant, located in southern Vietnam, has been inactive since October due to weak demand and pricing pressures. In an interview, Chief Executive Officer Thammasak Sethaudom indicated that the company has developed a plan to reopen the facility, with production potentially resuming within a month after a final decision is made.
The recent rebound in manufacturing activity in China, following a tariff agreement with the United States, has contributed to alleviating some of the oversupply of inexpensive chemical products from the world’s second-largest economy. Thammasak, who assumed the CEO role in January 2024, noted, “This is a sign that prices have probably reached the bottom, which opens the possibility for the Vietnam plant to be brought back to life.”
Siam Cement, with Thai King Maha Vajiralongkorn as its largest shareholder, has faced significant losses in its chemical division due to a global capacity surplus and the ongoing US-China tariff conflict, which has adversely affected demand and prices for essential chemicals like ethylene and propylene used in plastic production. The Long Son plant, the company’s largest overseas investment, has been a considerable financial burden, costing approximately 1.2 billion baht ($36.5 million) monthly to maintain, including interest and other expenses.
Following the recent tariff reduction agreement between the US and China, Chinese manufacturers have shifted their focus to meet US demand. Thammasak highlighted that the price difference between polypropylene, Siam Cement’s primary chemical product, and naphtha, a crucial raw material, had rebounded to over $400 per metric ton after the tariff truce, before settling around $350. The Long Son plant is expected to achieve profitability when the price spread between polypropylene and naphtha reaches approximately $380 per ton, aided by lower crude oil prices.
In the last two quarters, Siam Cement reported a total net loss of about 6 billion baht from the Long Son project. However, the company’s cement business is projected to remain its primary revenue driver in 2025, as the Thai government plans to increase spending on infrastructure projects to stimulate economic growth. Additionally, cement sales have been bolstered by rising demand from neighboring Myanmar, which is undergoing reconstruction efforts following a recent earthquake.
Established in 1913 under a royal decree to produce building materials, Siam Cement has seen its shares rise by 1.2% this year, contrasting with a 16% decline in the key benchmark stock index.
**FAQ**
**What factors are influencing Siam Cement’s decision to reopen the Long Son plant?**
Siam Cement’s decision to consider reopening the Long Son plant is influenced by signs of price stabilization in the petrochemical market, a rebound in manufacturing activity in China, and a recent tariff agreement between the US and China that has improved demand dynamics.