Message from Board of Directors

“Throughout the many years in the business, IRPC has been committed to ethical governance. Its operation has always been transparent and accountable. The company has treated all stakeholders equitably and fairly, striving to balance economic, social, and environmental factors to ensure sustainable development.”

Mr. Chansin Treenuchagron

Chairman

Dear Shareholders,

2019 was a year of many changes for global economies and international trades. The second half of the year, in particular, was rather volatile politically and economically. Many factors led to this volatility. The US - China trade war had worldwide implications. Conflicts in the Middle East caused a global economic slowdown due to a dip in the supply of crude oil, which directly impacted the petroleum and petrochemical industries. The higher costs of energy and feedstocks resulted in a thinner petrochemical spread. Meanwhile, an increase in petrochemical production in Asia-Pacific also led to stiff price competition.

Economic uncertainty, product pricing, and global tension had an impact on the company's performance in 2019. IRPC's earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2019 was 5.94 billion baht. It recorded a net loss of 1.174 billion baht, a year-over-year decrease of 115 percent in comparison to the net profit of 7.735 billion baht in 2018. Due to these challenges, IRPC made adjustments to its operational plan and strategies. For instance, catalyst coolers were installed at RDCC by May to augment its manufacturing efficiency, allowing IRPC to be more flexible with its sources of crude oil. The company also began manufacturing and selling IMO 2020 compliant low-sulfur fuel oil for cargo ships. Other mitigation measures included the integration of digital technology to enhance the efficiency of operations, petrochemical spread management, the development of high value-added products, and budget control, the last of which IRPC has always used.

The future still holds many additional challenges, including the continuation of the trade war, the decline of single-use plastics, digital disruption, and new regulations imposed to combat climate change. The Board of Directors has considered these factors and devised business directions and strategies accordingly. In doing so, the board hopes to maintain IRPC's competitiveness and allow it to cope with future changes while fostering growth and business sustainability in the long run. The board has shifted its focus to expanding the domestic and Southeast Asian markets to minimize the undesirable effects of global market volatility. It will continue to oversee the enhancement of manufacturing plants, implement measures to protect the company from price volatility risk, and lessen IRPC's reliance on Middle Eastern crude oil to manage sourcing risks. At the same time, the board will ensure that IRPC continues to research and develop high value-added products with its customers, make optimal use of existing assets, and seek new business allies through projects. For example, IRPC is working on expanding its ABS powder production capacity by 6,000 tons per year. The commercial operation of this project is expected to be ready by 2020. The company has partnered

“The Board of Directors has considered the future challenges and devised business directions and strategies accordingly. In doing so, the board hopes to maintain IRPC's competitiveness and allow it to cope with future changes while fostering growth and business sustainability in the long run by shifted its focus to expanding the domestic and Southeast Asian markets to minimize the undesirable effects of global market volatility.”

Mr. Noppadol Pinsupa

President

with Japan Polypropylene Corporation Limited to expand its polypropylene compound market into the automotive industry, the electric vehicle industry, and the electrical appliance industry. Its joint-venture e-commerce plastic platform under the name of PLASTKET.COM has added a new distribution channel. IRPC has constructed a 12.5 MW floating solar power plant, which will expectedly start providing green energy in 2020. It has also added the development of Oil Pipeline Transportation System Project with PTT Tank Terminal Co., Ltd. and Thai Pipeline Network Co., Ltd. Moreover, to ensure organizational excellence and support future growth, IRPC has prioritized tangible and effective people development. To this end, the company has encouraged every employee at every corporate echelon to put their maximum potential to good use. It has ensured that everyone within the same job family would enjoy equal opportunity and merit-based career advancement. It has also worked out succession plans. All of this will contribute to its future competitive edge. Throughout the many years in the business, IRPC has been committed to ethical governance. Its operation has always been transparent and accountable. The company has treated all stakeholders equitably and fairly, striving to balance economic, social, and environmental factors to ensure sustainable development. IRPC is a nationally and internationally acclaimed enterprise, a fact attested by its recent accolades, such as the Sustainability Award of Honor from the Stock Exchange of Thailand, the NACC Integrity Awards from the National Anti Corruption Commission, the Human Rights Awards from the Department of Rights and Liberties Protection of the Ministry of Justice, and the TCC Best Award from the Thai Chamber of Commerce. Furthermore, IRPC has been a named member of the Dow Jones Sustainability Indices in the Oil and Gas Refining and Marketing category for six consecutive years. This sustainability indicator has brought much pride and joy to everyone at IRPC.

The Board of Directors is well aware that behind the success of IRPC is every party involved, especially the senior management team and employees of IRPC, who have dedicated themselves to their work. These individuals have contributed much to IRPC and have always been prepared to take IRPC to the next goal. The Board of Directors would like to express its sincerest gratitude to every stakeholder for the trust and support shown. IRPC will always strive to realize its vision and mission. It will always operate ethically, transparently, and accountably within the framework of good corporate governance in the best interest of everyone involved. In doing so, IRPC will be able to generate value not only to its business but also to society, ensuring mutual growth in a sustainable manner.

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