Thailand will soon see the completion of one of the country’s largest corporate deals in recent history, as the country’s largest petrochemical entities are poised to merge their Thai olefins and polyolefins businesses.
SCG Chemicals (SCGC) and PTT Global Chemical (PTTGC) have moved ahead towards combining their businesses, following SCGC’s update to the Thailand Stock Exchange (SET) on October 28 2026. Deal completion is expected to be finalized within the second half of 2027, with the combined entity eyeing recurring annual benefits of 5-6 billion baht.
The two companies have now reached an agreement on key terms and the details of a strategic joint venture. PTTGC will become the majority shareholder with 56 percent and SCGC will be a significant shareholder with 44 percent.
This is the classic story of two rival industry titans coming together to combine expertise, scale and strengths against increasing competition from China, leading to squeezed margins and uptick of Chinese polyethylene and polypropylene flooding across key Asian markets.
Combined Titans of Industry
In the briefing to the Thailand Stock Exchange, Thammasak Sethaudom, President and Chief Executive Officer of The Siam Cement Public Company Limited (SCG), acknowledged that the joint venture will propel the reality of building a regional scale petrochemical leader, whilst maintaining Thailand’s strength and competitiveness in the global market.
The timing is fitting, and recent headlines suggest that its been developing in the works as part of a shifting competitive landscape and increasing influx of Chinese imports. With the merge, both companies can focus on their differing strengths and value creation as opposed to competing for the same market share in an increasingly challenging market. In this case, scale will be a competitive advantage.
SCGC and PTTGC will each leverage their individual strengths in the joint venture. SCG’s strong distribution network and broad product portfolio, as well as its own process technology and highly specialized products enables the company to produce premium outputs, whilst PTTGC’s vast refinery and gas network allows for competitively priced production and a fully integrated infrastructure with operations control. When combined together, both sides of the value chain can combine their upstream and downstream strengths especially as the landscape shifts instead of competing for the same pie.
Market consolidation will also allow the entity to navigate and thrive amid shifting global industry cycles by playing into their strengths.
The newly established joint venture will set a dividend policy of at least 60 percent of consolidated net profit, with additional dividends possible.
Looking Past The Potential JV
Both companies will seek approval through a General Meeting in December this year, and applying for approval from the Trade Competition Commission of Thailand (TCCT) within next year.
When two companies of this scale consolidate, it’s worth watching how this will impact Thai plastic manufacturers in regards to cost and their ability to compete. Currently, there are tariffs in place, meaning that margins for resin already make it difficult for manufacturers to be competitive if they import raw materials from other markets. When two entities combine at this scale, it also means that it will be easier to dictate the local market price.
