PETRONAS Chemicals optimistic of another upcycle

KUALA LUMPUR: Petronas Chemicals Group Bhd (PCG) managing director and chief executive officer Mazuin Ismail is confident that the industry will experience an upward cycle as the economy rebounds and demand aligns with supply, given the company’s long-term commitment.

This positive outlook comes despite the expected impact of a bearish global economy, slower-than-anticipated recovery in China, and ongoing geopolitical tensions, which are likely to result in softer markets in the near term.

He emphasised PCG’s readiness to confront these ongoing challenges, recognising them as integral aspects of the broader value-creation journey.

“We have the measures in place to mitigate these challenges, as well as the plans and commitment to grow the business further.

“We will bounce back stronger and wiser by remaining true to our strategies and dedicated to delivering value to our stakeholders,” he said in PCG’s Integrated Report 2023.

The group recently reported a decrease in net profit to RM1.69 billion for the financial year ending Dec 31, 2023 (FY2023), down from RM6.32 billion the previous year.

Revenue also experienced a slight decline to RM28.67 billion from RM28.95 billion previously, reflecting the challenging conditions prevalent in the global chemicals industry throughout the year.

For the fourth quarter of FY2023, the group’s net profit dropped to RM112 million from RM481 million, attributed to a decrease in revenue to RM7.21 billion from RM8.70 billion in the previous year’s corresponding period.

Mazuin highlighted that the challenges faced by the chemicals industry in 2023 were diverse, primarily driven by an ongoing downturn that resulted in margin compression and heightened costs for all industry participants.

This environment also led to a destocking trend in the specialities sector, he said.

“However, we view this downcycle as temporary. In addition, we recognise that what we produce is vital to the construction, automotive and personal care sectors.

“By optimising our production, we are committed to positioning ourselves strategically to seize any arising opportunities when the recovery occurs,” he added. – BK