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Ref. VB/L-FAO-067.2004
November 10, 2004
| Subject |
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Resolution of The Board of Directors’ Meeting concerning the Doubling of the VCM Capacity and the Resignation of a Director |
| Attn |
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President
The Stock Exchange of Thailand |
| Enclosure |
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The Information on the Doubling of the VCM Capacity Project |
The Board of Directors Meeting of Vinythai Public Company Limited No. 6/2004, held on November 10, 2004, at 9.00 hrs., at the Conference Room 30th Floor, C.P. Tower, 313 Silom Road, Bangrak, Bangkok, has resolved the important agenda as follows:
| 1) |
Approved the project to double the Vinyl Chloride Monomer (VCM) production capacity. The project, estimated to cost roughly Baht 2,300 million, would be debt-financed by local bank(s). The expansion will double Vinythai’s current VCM capacity of 200,000 tons per annum (tpa) to 400,000 tpa. Of the additional VCM capacity, the Company will sell 150,000 tpa under a long-term contract with APEX Petrochemical Co., Ltd. (APEX). The remaining 50,000 tpa will be exported or sold domestically. The Company also has a tolling agreement with APEX on the production of 48,000 tpa of PVC. A relevant Memorandum of Understanding (MOU) has been signed between the Company and APEX.
The expansion project is subject to the approval from the Company’s bondholders, the Board of Investment, and the environmental impact assessment authorities.
The additional details of this expansion project are shown in the enclosure.
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| 2) |
Due to heavy and additional engagement being assigned to Mr. Arsa Sarasin, he thus would like to resign from the directorship of the Company, effective from November 10, 2004. The Board of Directors acknowledged the resignation of Mr. Arsa Sarasin from the directorship of Vinythai Public Company Limited and expressed appreciation for his contribution to the Company. The Board of Directors will proceed with the appointment of a new director for replacement.
Please be informed accordingly.
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Sincerely yours,
(Mr. Vincent De Cuyper)
Managing Director
The Information on the Doubling of the VCM Capacity Project
Vinythai PCL (VNT) announced on November 10, 2004 that the Board approved the doubling of the Vinyl Chloride Monomer (VCM) production capacity at its plant in Map Ta Phut. The project, which is based on the latest Solvay technology, is estimated to cost roughly Baht 2,300 million, and would be debt-financed by local bank(s).
Construction will begin in 2005 with production expected to commence in September 2006. The expansion will double Vinythai’s current VCM capacity of 200,000 tons per annum (tpa) to 400,000 tpa. VCM is the major feedstock for PVC production. Of the additional VCM capacity, the Company will sell 150,000 tpa under a long-term contract with a local producer of PVC, APEX Petrochemical Co., Ltd. (APEX) who currently imports VCM for its own PVC production. The remaining 50,000 tpa will be exported or sold domestically. The Company also has a tolling agreement with APEX on the production of 48,000 tpa of PVC. A relevant MOU has been signed between VNT and APEX.
Main raw material required for the expanded capacity, Ethylene Dichloride (EDC), will be sourced by imports from the international markets. The Company is pursuing the study of an upstream integration into chlorine and caustic soda production facility. The decision will be taken after finalizing whether ethylene would be sourced either from local or abroad.
By getting access to an additional 48 ktpa PVC without additional PVC investment, the Company is well-positioned to take advantage of a growing PVC export market. The expansion project is subject to the approval from the Company’s bondholders, the Board of Investment, and the environment impact assessment authorities.
The Company’s Board of Directors believes that this expansion will reinforce Vinythai’s position as a key player in the regional vinyl industry and add significant value for the Company and its shareholders.
VNT is a listed company on the Stock Exchange of Thailand; the stock is included in the SET 50 Index. The major shareholders are Solvay, S.A of Belgium and Charoen Pokphand Group companies of Thailand, currently holding 46.4% and 25.9% respectively.
VNT is the third largest vinyls producer in South East Asia. It currently has a fully integrated PVC production capacity of 210,000 tpa, with the VCM capacity of 187,000 tpa (under current increase of capacity to 200,000 tpa), and Caustic Soda capacity of 125,100 tpa (under current increase of capacity to 133,000 tpa).
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