By Stella Goh
LCTITAN has carried out 5 years strategic plan, and its revenue has grown to US$6 billion (about RM25 billion) in five years, and has risen to be the top of Petrochemical Company in ASEAN.
According to the President and CEO of the group Lee Dong Woo, this could be achieved through strengthening business competitiveness, developing new business and expanding production capacity.
During the AGM last years, Lee Dong Woo said the company’s total capacity needs to double from 3.5 million tons to 7 million tons only is able to achieve its target.
The New Plant in Indonesia Can Increases Capacity by 80%
Indonesia plans to boost its capacity by 80%, with an annual output of 1 million metric tons of ethylene, or other downstream products.
In 2018, LCTITAN took actions in order to build a factory building in Cilegon, an industrial city near to the port of Merak, Wanden Province, Northwest, Jawa, Indonesia. The expected operations are in FY2023.
The projects include a light oil cracking plant and a petrochemical complex at a total cost of RM18 billion. LCTITAN has sold 49% of its shares to Lotte Chemical to share the cost of line projects. Ethylene is the raw material for the production of polyethylene (PE) plastics.
In addition, the company’s 40% stake in the mono-ethylene glycol plant project in the United States also contributes to the above objectives.
In recent years, revenue is between RM7.2bil and RM9.2bil, and the profit is between RM400mil and RM700mil.
According to Lee Dong Woo, who was awarded a doctorate in plastic engineering since he was young, said that LCTITAN’s vision is to become the leader of petrochemical company in Southeast Asia in FY2024, which will continue to add new value to the business and explore to new collaborative business with potential higher returns.
Lee also stated that he has adopted a three-prolonged strategy of sustainable growth, namely optimizing the plant, strengthening business competitiveness, sustainability and supervision, so as to support the vision of “becoming a top Petrochemical Company in Southeast Asia” in 2024. He said the vision echoes the head office’s Lotte Chemical Corporation’s desire to become the world’s top seven petrochemical companies by 2030.
Lee also expects in the second half of fiscal year 2020, following the restart of global economic and manufacturing activities, the core business of LCTITAN will slowly recover and return to normal. He also added LCTITAN has successfully shifted its sales to regions. During the epidemic, the demand for food packaging and medical equipment increased, which partially offset the loss of low demand, and even offset the impact caused by the loss of industrial plastic business during the management period.
The group constantly reviewed the plant operation to control production and inventory during the period of market demand fluctuation. As for other measures, it is the largest or domestic sales and high-quality product grade sales in order to obtain higher revenue. He also pointed out the naphtha, or commonly known as naphtha, is closely related to Brent crude oil and highly volatile. As for-profit outlook, it depends on the price between plastics and light oil in future.
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