Berkshire Hathaway’s recent $9.7 billion acquisition of Occidental Petroleum’s chemical subsidiary, OxyChem, has sent positive ripples through the global petrochemical industry. The Oracle of Omaha’s strategic move underscores renewed confidence in the sector’s long-term relevance—news that bodes well for listed companies globally and within Thailand’s robust energy and petrochemical space.
OxyChem, known for its essential industrial chemicals like chlorine, caustic soda, and PVC, generated a solid $213 million in pretax earnings last quarter and consistently delivers strong free cash flows. Berkshire’s willingness to pay a premium highlights not only OxyChem’s healthy profitability but also the resilience and importance of the chemicals industry—an industry often viewed as defensive thanks to steady demand in sectors such as water treatment, construction, and pharmaceuticals.
This landmark acquisition comes at a time of increasing optimism. Recent reports indicated that Japan’s top petrochemical players, along with South Korean counterparts, are planning cutbacks in ethylene cracker capacity by 2030. This tightening of global supply is expected to boost pricing power and improve profitability for producers worldwide. Additionally, growing strategic partnerships and economic stimulus in India and China are set to bolster demand, reinforcing the structural importance of petrochemicals in the modern global economy.
For Thai investors, Berkshire’s investment sends a clear signal that the sector remains vital to the world and is poised for further growth. Many of Thailand’s largest listed companies, such as PTT Global Chemical (PTTGC), Indorama Ventures and IRPC, operate extensive petrochemical businesses. With a respected global investor like Berkshire Hathaway raising the valuation benchmark for the industry, local players could soon benefit from a re-rating as well.
In summary, the OxyChem acquisition provides a much-needed vote of confidence for petrochemical assets globally and in Thailand. As attention turns toward industry fundamentals and supply-demand dynamics, Berkshire’s move could well foreshadow a stronger outlook for Thai energy and petrochemical stocks in 2025.
