PTT Asahi Chemical Co., Ltd. (PTTAC), a 50-50 joint venture between Asahi Kasei Corp. and PTT Global Chemical Public Company Limited (PTTGC), has announced the discontinuation of its operations following a resolution passed at a General Meeting of Shareholders on November 15, 2024.

The company runs a propane-based acrylonitrile (ACN) facility with a capacity of 200,000 tonnes per year and a methyl methacrylate (MMA) plant with a 70,000-tonne annual capacity, according to the ChemAnalyst data.

Established on August 1, 2006, PTTAC is located in Rayong, Thailand, and initially focused on the manufacture and sale of acrylonitrile (AN) through the propane process, methyl methacrylate (MMA) via the ACH process, and ammonium sulfate. These products were primarily supplied to customers across Southeast Asia, positioning PTTAC as an important manufacturing hub in the region.

However, since around 2022, PTTAC has faced growing challenges that significantly impacted its competitiveness. A persistent sluggish economic environment, coupled with rising feedstock costs, created difficulties for the company’s operations. Additionally, the global chemical market has seen an increase in production capacity in China, resulting in an oversupply that further exacerbated the supply-demand imbalance. These factors led to unfavorable market conditions, which in turn affected PTTAC’s earnings. After extensive discussions between Asahi Kasei and PTTGC, both parties concluded that it would no longer be feasible to continue operating PTTAC under the current conditions, prompting the decision to cease operations and begin the process of deconstructing the plant facilities.

PTTAC’s operations will be discontinued according to a detailed schedule. The company will cease production by October 31, 2024, and stop sales by December 31, 2024. Following these milestones, the deconstruction of the plant facilities will take place over a period extending from 2025 to 2028. The exact timeline for the dissolution of PTTAC will depend on the progress of the plant deconstruction and other related processes. This timeline will be finalized once a clearer picture of the deconstruction schedule emerges.

Despite the shutdown of PTTAC, Asahi Kasei remains focused on strengthening its overall business strategy to ensure sustainable growth. As part of this strategy, the company intends to continue providing a stable supply of AN and MMA to its customers, primarily in Asia, by leveraging its existing infrastructure and partnerships. Asahi Kasei’s ongoing commitment to maintaining its market position in these product areas will help mitigate the impact of PTTAC’s closure.

The financial impact of PTTAC’s operational discontinuation has already been factored into Asahi Kasei’s consolidated forecast for fiscal 2024, which was released on November 1, 2024. Asahi Kasei’s decision to discontinue PTTAC’s operations is a strategic move designed to refocus its resources on areas with stronger growth potential, in line with its long-term business objectives. The company aims to optimize its operations and adapt to evolving market conditions, ensuring continued profitability and long-term corporate value.

Through these adjustments, Asahi Kasei will continue to prioritize initiatives that support its sustainability goals, ensuring the company remains competitive and well-positioned for future growth in the global chemical industry. The dissolution of PTTAC marks a significant step in the company’s broader strategy to streamline operations and focus on high-value areas that align with its long-term vision.