Morgan Stanley said the potential strategic joint venture between PTT Global Chemical (SET: PTTGC) and The Siam Cement (SET: SCC), through SCG Chemicals (SCGC), looks like a win-win for both companies. It also described PTTGC’s expected majority position in the venture as a key positive.
The financial firm said PTTGC owning a majority share in the planned 7 million tonnes per annum (mntpa) olefins JV surpassed street estimates. The brokerage noted that the JV’s feedstock mix is about 25% ethane and 75% naphtha.
For SCC, Morgan Stanley said the group’s ability to unwind debt will be central to share price performance. It expects both the chemicals and paper cycles to recover, and it noted that the group has shown significant discipline in capital allocation.
Morgan Stanley noted that petrochemical consolidation is now under way across Korea, Europe, India, Malaysia and Singapore, and now Thailand. It sees this trend as pointing to an accelerated recovery in the global chemical cycle.
While the current contours of the announcement are a win-win for SCG and PTTGC, Morgan Stanley is still waiting for details of the transaction.
Background on the JV
On 30 September, PTTGC and SCC announced via the Stock Exchange of Thailand that talks on the potential joint venture have progressed well. The two sides have entered the confirmatory due diligence phase and are discussing key terms.
The JV would combine the olefins and polyolefins assets of both groups in Thailand. PTTGC’s contribution includes its crackers, polyethylene (PE) facilities and its investment in HMC Polymers. SCGC’s contribution includes its crackers, PE and polypropylene (PP) facilities, and its stakes in Siam Polyethylene, Siam Synthetic Latex, Thai MMA and Bangkok Synthetics.
The companies said the aim is to build a leading regional petrochemical player and strengthen Thailand’s competitiveness. They plan to do so through greater scale, an integrated value chain, an advantaged feedstock position and stronger downstream capabilities in higher-value and differentiated products. Under the framework now contemplated, PTTGC is expected to become a major shareholder, while SCGC is expected to remain a significant shareholder.
The companies expect to finalize key terms, including shareholding structure, transaction steps and quantified synergies, within October 2026. They will then file for approval with the Trade Competition Commission of Thailand (TCCT). The deal remains subject to internal approvals, shareholder approval, approvals from relevant JV partners where applicable, and regulatory approvals.
