IRPC Innovates for Sustainable Growth Amid Global Market Fluctuations

IRPC Anticipates Oil Demand Increase, Advances with SOS Strategy, and Strengthens Partnerships

IRPC is preparing for an anticipated rise in oil demand this winter, aligning its production and distribution strategies with expected year-end festival season needs. The company, led by President and CEO Terdkiat Prommool, is committed to driving growth with innovative approaches and its Save Overcome Strive (SOS) strategy, keeping a close eye on global economic shifts to navigate volatility.

Prommool forecasts rising demand for diesel and fuel oil in the fourth quarter of 2024 as colder months drive energy needs. Petrochemical demand is also expected to climb due to seasonal factors, while China’s economic initiatives show positive industry impact, including efforts to boost domestic purchasing power and stimulate the real estate sector.

However, IRPC faced challenges in Q3/2024, experiencing crude oil price volatility and economic slowdowns in key regions. This led to a net loss of 4.88 billion baht, a 4.15 billion baht increase from Q2, with revenues decreasing by 4.10 billion baht due to lower average selling prices. This drop occurred despite a 4% increase in sales volume.

IRPC’s petroleum segment reported improved gross profit from its refining activities, with Market Gross Refining Margin (GRM) rising due to increased spreads on base lubricant products.

Higher asphalt prices, driven by domestic demand, also contributed positively. The petrochemical business saw gains from styrenics and raw materials, largely due to China’s economic stimulus, achieving a Market Gross Integrated Margin (GIM) of 3.65 billion baht, or 5.72 USD per barrel, a 5% rise from the previous quarter.

Global economic concerns, including slower growth in China, the U.S., and Europe, impacted crude oil prices, resulting in a 3.37 billion baht loss for IRPC from oil stocks and a 1.63 billion baht reduction to the net realizable value of its inventory.

Total stock losses for Q3 amounted to 5 billion baht. EBITDA dropped to -4.84 billion baht from 1.44 billion baht in the prior quarter, although the strong baht provided some gains, including 763 million baht from derivatives, 182 million baht in foreign exchange gains on loans, and 575 million baht in unrealized oil risk management income. Depreciation and finance costs, however, kept net losses elevated.

Prommool stated that IRPC is implementing the SOS project to cut production costs and improve efficiency through strategic investments and asset management. This approach enables IRPC to adapt swiftly to external factors impacting performance.

IRPC also emphasizes sustainable business practices, linking social responsibility with financial risk management through a Social-Linked THOR contract with Kasikornbank. The initiative aims to mitigate financial risks while supporting Environmental, Social, and Governance (ESG) goals.

In collaboration with the Federation of Thai Industries’ Innovation One Fund, IRPC is backing SMEs and startups, including developing the sustainable “REINFOXX White Bear Fertilizer” for the agricultural sector.

This commitment to innovation has earned IRPC numerous awards, including the Best Innovative Company from SET Awards 2024 and four National Innovation Awards: the Outstanding Innovative Organization Award, the National Innovation Honor Award for its ABS Plastic Pellets project, second runner-up in the Social and Environmental category for its PP Phthalate Free Products project, and second runner-up in the Economic category for its UHMWPE for Battery Separator project.

These achievements reflect IRPC’s decade-long dedication to driving sustainability through technology, creativity, and strategic improvements.