Bangkok: The private sector is closely monitoring the oversupply of petrochemical production, which is changing the global petrochemical landscape. The private sector proposes survival strategies, urging adaptation to high-value products and environmental standards, supporting a "Thailand First" approach to maintain competitiveness.
According to Thai News Agency, government representatives, upstream petrochemical producers, and downstream businesses participated in a seminar entitled "Resilience in a Shifting Global Landscape" at the 17th PTT Group Petrochemical Outlook Forum, organized by PTT PRISM, following the global overcapacity crisis.
Mr. Tosaporn Boonyapipat, President and CEO of PTT Global Chemical Public Company Limited (PTTGC) and Chairman of the Petrochemical Industry Group of the Federation of Thai Industries (FTI), stated that the petrochemical industry faces challenges from the global economic situation, geopolitical risks, and new global regulations on decarbonization. Simultaneously, there are supply-side pressures as the industry shifts from a demand-driven era where production could sell anything, to an overcapacity situation. This excess production capacity is driven by China's self-sufficiency policy, the US discovery of shale gas, and the Middle East's shift from flaring ethane to adding value, continuously pushing up excess production capacity.
Although China anticipates that production capacity will begin to rebalance in the long term from 2030 onwards, new production capacity has continued to flow in over the past 3-5 years, reaching over 10 million tons before beginning to slow down.
Regarding the direction of adaptation for the Thai petrochemical industry, it is believed that it needs to build flexibility and diversify the risks of feedstock and plastic products, seek new sources of raw materials, and maintain domestic production bases/customers to ensure supply chain stability. The industry must shift from commodity products to specialty chemicals and advanced materials.
In line with global trends towards Bio, Recycle, Circularity, and Low Carbon, the industry is shifting from a produce-use-dispose approach to Reuse, Circularity, and Low Carbon. Efforts are underway to bring off-system plastics back into recycling, advance master plans and regional infrastructure such as the Low Carbon Cluster model in Map Ta Phut, and support the PDP and CCS plans. The Made in Thailand policy is being promoted to increase local content in both government and private sector projects, and transform industrial estates from commodity-based to specialty material hubs to build long-term competitiveness.
The approach to sustainable petrochemical industry development emphasizes that the government must create fair competition rules, protecting the industry by establishing consistent product and commodity standards. This isn't about suppressing competitors, but rather creating fair criteria. Policies and adaptations should align with the Made in Thailand, Recycled Content, and Circular Economy policies to comply with global regulations. The government should set targets for recycled content and provide incentives through tax measures and various benefits, supporting the Climate Change Act, but without imposing excessive additional costs on the private sector.
However, water resources must be managed sustainably and sufficiently to support growth, such as supporting data centers and coping with the El Ni±o phenomenon. Structural adjustments should focus on shifting from a volume-based approach to value creation through specialty chemicals and specialty polyolefins.
Mr. Wichian Lekvichitathada, President of the Thai Plastics Industry Association, stated that environmental trends such as Carbon Footprint and ESG are undeniable, but regulations must be implemented at the right time. Implementing them too quickly will lead to higher costs and a loss of competitiveness. Importantly, Thailand should adopt a "Thailand First" policy, similar to President Donald Trump's "America First" policy, to ensure the government favors and promotes local businesses over foreign ones. This is to prevent foreign capital from dominating the market. Furthermore, the government must listen to feedback throughout the supply chain before issuing regulations and provide clear direction in advance to minimize the impact on businesses.
Mr. Tosaporn Petchpoli, Chief Executive Officer of Supply Chain Technology and Quality at CPF, stated that if Thailand adopts European packaging management laws, it will enhance its competitiveness in exports. He also suggested upgrading plastic and packaging waste management projects to a national level to transform waste into value, and adopting good environmental standards will strengthen Thai food brands globally. Furthermore, the government and the chemical industry must collaborate to develop guidelines so that compliance with the laws does not become an excessive cost.