Reason for temporary suspension of commercial production at Long Son Petrochemical Complex

On the afternoon of November 7, Long Son Petrochemical Company Limited officially announced that it had temporarily suspended commercial production activities at the Long Son Petrochemical Complex (LSP) from mid-October 2024.

Long Son Petrochemical Complex. (Photo: Doan Manh Duong/VNA)

On the afternoon of November 7, Long Son Petrochemical Company Limited officially informed that the unit has temporarily suspended commercial production activities of Long Son Petrochemical Complex (LSP) from mid-October 2024.

The reason, according to the company, is to control total production and business costs and will restart when market conditions are more favorable.

According to the company, the petrochemical industry is currently facing a recession with low profit margins. The reasons are the lingering effects of the COVID-19 pandemic, a significant increase in production capacity in China and high oil prices due to geopolitical tensions.

Currently, SCG Chemicals Public Company Limited (SCGC), the parent company of LSP, is focusing on optimizing production management of all three plants: Rayong Olefins (ROC, Thailand), Map Ta Phut Olefins (MOC, Thailand) and LSP (Vietnam) to adapt to input material prices, market demand and global economic conditions, as well as maximize the company's competitiveness.

During this time, LSP remains committed to its employees, business partners and long-term business direction. The company will continue to focus on asset preservation, ensuring that its facilities are well maintained and operating stably.

At the same time, increase efficiency, implement cost-saving measures; develop human resources, focus on investing in training and capacity development for the company's 1,000 existing employees.

Mr. Kulachet Dharachandra, General Director of LSP said: The company has developed a plan to invest 700 million USD to implement the infrastructure upgrade project at Long Son Petrochemical Complex, aiming to increase the use of Ethane gas imported from the United States as input material for the Complex.

With this strategic move, LSP promises to significantly increase its competitiveness by reducing input costs, improving production flexibility and reducing carbon emissions. The project is expected to be completed by the end of 2027.

LSP’s olefins production process is designed to be flexible to accommodate gas feedstocks. Much of this investment is focused on processing and storing feedstock Ethane at -90 degrees Celsius.

When the project is completed, LSP can utilize Ethane source up to two-thirds of total input material, in addition to the previously designed Propane and Naphtha feedstock sources.

Mr. Kulachet Dharachandra added that the company hopes to receive support from the authorities in speeding up the investment licensing process for the Ethane feedstock enhancement project.

This strategic investment also affirms the Group's commitment to responding to the current challenges of the petrochemical industry and the important role of the LSP complex in the sustainable development of Vietnam.

Previously, LSP was put into trial operation from January 2024 and officially put into commercial operation from September 30, with the trial phase output reaching 219,000 tons./.

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