Message from Board of Directors
The year 2020 was a challenge to petroleum and petrochemical businesses worldwide amidst slow-down global and Thai economies due to impacts from oil price war between Saudi Arabia and Russia and volatility of trade war between the superpowers. Above all, the worst impact was the COVID-19 pandemic. World crude prices substantially dropped as petroleum demand from transportation and tourism enormously declined due to country closure measures to control the pandemic, the direct impact on petroleum and petrochemical businesses.
Such economic turbulence had immense effect on IRPC’s 2020 overall performance. The Company recorded 4,692 million baht earnings before interest, taxes, depreciation and amortization (EBITDA) with 6,152 million baht of net loss from oil stock loss during the first half of the year as crude prices swung around 13-69 USD per barrel despite our positive operating results in the 3rd quarter. To weather the situation, the Company transformed its operational plan and strategies to enhance competitiveness through various projects. For example, cost reduction
and organizational capability boost up through the NOAH Pro j e c t (New Org a n i z a t i o n A g i l e Human), development of high-value products through a 50:50 joint venture with Japan Polypropylene Corporation (JPP) in Mytex Polymers (Thailand) Co., Ltd. to expand the market of Polypropylene Compound (PP Compound) to satisfy automotive and electrical appliance industries, e-commerce polymer platform under the name Plastket.com to add distribution channels and customer accessibility, promotion of alternative energy use through the 12.5-megawatt floating solar power plant, the instituting of IRPC Innovation Center to develop innovation and research and development works in business, the introduction of streamlined digital and technology organization-wide to elevate operational efficiency, risk management of product and raw material spread and expense control practices adhered to throughout the Company.
Future challenging factors from uncertainties in petrochemical and refining businesses, more rigorous
price competition of regional producers and consumers’ changing behavior in the Next Normal all affect the future demand for petrochemical and petroleum products. The Board of Directors has prepared to cope with these situations by defining operational directions and strategic plans to enhance competitiveness and foster sustainable business growth. Production efficiency improvement, development of high-value products with innovation excellence, investment expansion for continuous business growth will be implemented through a variety of projects e.g. Ultra Clean Fuel (UCF) Project to align with the Euro 5 diesel standard of the public sector, with expected commercial production in 2023; ABS Powder Expansion Project to increase another 6,000 tons per year of capacity expected to commercialize in the 2nd quarter of 2021; the R&D Excellence Project for innovation excellence focusing on products in key business; innovation opportunities in the New S-curve; cooperation project with PTT to jointly study and produce Melt Blown fabric, raw material for surgical mask production, and produce Nitrile Butadiene Latex (NBL) for medical gloves. In addition, IRPC originates a social value creation project in collaboration with Navamindradhiraj University to build Thailand and ASEAN’s first fully integrated central laboratory for international standard medical product inspection with expected completion in the 2nd quarter of 2021.
IRPC has adhered to business operations under the good corporate governance principles, whilst striking a fine balance of economic, social, and environmental aspects within the sustainability management frameworks of domestic and international standards. These endeavors have earned the Company various certifications and honorable awards from renowned organizations and institutions both at home and overseas, remarkably confirming IRPC’s accomplishments e.g. Dow Jones Sustainability Indices (DJSI) membership for the 7th consecutive year and the Gold Class Distinction of the Sustainability Yearbook in 2021 in the Oil & Gas Refining and Marketing, a recipient of an honorable plaque for listed companies that conduct sustainable business operations or 2020 Thailand Sustainability Investment (THSI) in the resources sector. IRPC was also the only large private corporate to be awarded the Role Model Organization in Human Rights for the 2nd consecutive year. In addition, the Company was granted two 2020 Innovation Awards from the National Innovation Agency (NIA) i.e. Innovative Organization Honorable Award and the 1st Runner-up in Society and Environment.
The Board of Directors, the Management and employees of IRPC Public Company Limited are all thankful to shareholders and related parties who have confided in, trusted and supported our business operations. IRPC would stay determined and dedicated to performing our duties at full capacity to set the stage for stable business growth with good corporate governance principles for equitable benefits of shareholders and stakeholders in parallel with balanced creation of business and social values for our mutual sustainable advancements.