Overview of Malaysia's Plastics Market - 27september

OVERVIEW OF MALAYSIAS PLASTIC MARKET
26th September 2016

Overview of Malaysias Plastic Market
NATIONAL KEY ECONOMIC AREAS (NKEAs)
Malaysias GDP in 2015 was worth USD 296.22 billion, representing 0.48% the world
economy. As part of the Governments initiative to expand the economy, they have identified
12 potential economic sectors to further boost our national income, called the National Key
Economic Areas (NKEAs). Oil, gas and energy sector, is one of the 12 NKEAs.
Realising that each industry needs to be tackled with different strategic plans, PEMANDU has
identified 13 EPPs for oil, gas and energy NKEA of which cover both upstream and
downstream sectors.
This paper will focus on EPP 13, which aims to grow our domestic petrochemical output. There
are currently two National Projects underway to execute the mission of EPP13. The two
projects are Sabah Ammonia and Urea (SAMUR) in Sipitang, Sabah and Refinery and
Petrochemical Integrated Development (RAPID) in Pengerang, Johor both of which are owned
by PETRONAS.
PETRONAS plan to produce 2,000,000 tpa1 of petrochemicals once the RAPID project
commences in the second half of 2019. Looking at the vast potential and magnitude of RAPID
it is vital for JPDC to plan and strategies accordingly to meet the national target.
PETROCHEMICALS MAKE THINGS HAPPEN
In this new modern era, most of the goods in our everyday life are produced from
petrochemicals. There are also a number of industries whereby the products are produced
from petrochemicals like plastics, automotive, electric and electronics and coatings.
Plastics industry in particular is our main target industry as 99% of plastic products come from
processed oil and natural gas. In 2014, plastics industry contributed 0.9% of Malaysias GDP2.
The vast potential of plastics industry domestically as well as globally propels petrochemicals
industry to grow.
Despite the status of being one of the leading developing nations in the Asia region, Malaysia
is still lagging behind in the petrochemical manufacturing industry even after adding the
petrochemical output from RAPID project.
PLASTICS INDUSTRY IN MALAYSIA
In this paper, we have identified 14 key plastic feedstocks. To reduce the countrys import
dependency and increase our domestic production to cater for the growing demand, we need
to be able to identify these key petrochemicals that are high in demand but are largely
outsourced.
In recent years, export volumes of plastics have been growing more rapidly than import hence
our trade deficits are projected to decline. Our main trade partners are China, Indonesia,
1
Figures stated as of December, 2015
2
Study on Potential Economic Impact of TPPA on the Malaysian Economy and Selected Key Economic Sectors
(December 2015) PwC
2
Johor Petroleum Development Corporation Berhad
Singapore, Japan, Thailand and Saudi Arabia which accounted for more than half of Malaysias
trade values in 20153.
This is probably due to the worsening of our Ringgit which as an exporting nation, has a
competitive advantage whereby our exports will inevitably become cheaper in real value.
Figure 1 below shows the balance of trade in volumes of each feedstock.
Figure 1 : Balance of Trade

200,000
150,000
100,000
50,000
Weight (tonnes)
-50,000
-100,000
-150,000
-200,000
-250,000
ABS
EG
ACN
Benzene
EPS
PE
PET
PC
PA
PP
PS
Toluene
PVC
Styrene
2014 2015 2016 H1
From the figure above, we can identify that Malaysia is a net importer of several plastic
feedstocks namely acrylonitrile (ACN), expandable styrene (EPS), polycarbonates (PC),
polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC), styrene and toluene.
Across the 30 months it is clear that the top 5 imported plastic feedstocks are PVC, PP, PE,
styrene and ACN. Malaysia should therefore focus on increasing the domestic capacity of
these products.
3
http://www.trademap.org/Country_SelProductCountry_TS.aspx
3
Figure 2 depicts an overview of import trends from 2014 to 2016 (H1) across 14 plastic
feedstocks.
Figure 2 : Import of Plastic Feedstocks

2014 2015 2016 H1
1,200,000
Weight (tonnes)
1,000,000
800,000
600,000
400,000
200,000
0
Products
TRADE STATISTICS FOR MAIN PLASTIC FEEDSTOCKS

Styrene
Figure 3 : Styrene
On average over 30 months,
net imports of styrene totalled Import Export Balance of Trade
83,586 tpa shown in Figure 3. 200,000 (75,000)
In 2015, Malaysia spent about
Weight (tonnes)
RM 478 million for 112,426 tpa 150,000

(80,000)
of styrene from Singapore. 100,000
Styrene is mainly consumed in (85,000)

50,000
the production of polystyrene,
expandable polystyrene, as - (90,000)
acrylonitrile-butadiene- 2014 2015 2016 (H1)
styrene (ABS) resins and
styrene-acrylonitrile (SAN) which are covered in the later part of the study.
Polystyrene (PS)
On the contrary, PS is moving towards export-oriented, as explained in Figure 4. Imports have

gone down from 74,841 tpa in 2014 to 61,379 tpa in 2015 whilst exports have significantly
almost doubled from 56,764 tpa to 108,595 tpa in the same period consequently transforming
4
Malaysia into a net exporter of PS. It is interesting to note that China is the biggest importer
of Malaysian PS for the past few years.
Figure 4 : Polystyrene
Import Export Balance of Trade
150000
Weight (tonnes)
100000
50000
0
2014
-50000 2015
2016 H1
Expandable polystyrene (EPS)
Malaysia imported nearly 30,000 tpa of EPS in 2014 and 2015. EPS, or commonly known as
Styrofoam, is an extremely lightweight product that is made of expanded polystyrene beads.
It is composed of at least 95% air and 5% plastic.
Acrylonitrile (ACN)
ACN exports were only 701 tonnes and 45 tonnes in 2014 and 2015 respectively, while
imports reached almost 100,000 tpa in both years. The huge trade deficit may be a good
indicator that we need to increase our domestic ACN production. Some of the largest end
products of ACN are acrylic fibers, acrylonitrile-butadiene-styrene (ABS) and styrene-
acrylonitrile resins.
Polyethylene (PE)
Referring to Figure 5, net imports of PE narrowed down from 166,773 tpa to 41,718 tpa in
2014 and 2015 respectively. In 2015, PE imports in 2015 reached 1,000,000 tpa, up by 153,395
tonnes from 2014.
PE is the most common plastic and it is no surprise that it is one of the most demanded
plastics. Despite the wide range of uses, PE is primarily consumed in the manufacturing of
packaging.
5
PE is mainly produced in three forms

Figure 5 : Polyethylene
namely low density (LDPE), linear low 1,200,000
density (LLDPE) and high density 1,000,000
(HDPE). 800,000
Weight (tonnes)
The LDPE or LLDPE form is preferred 600,000
for the manufacturing of film 400,000
packaging and electrical insulation. 200,000
On the other hand, HDPE can be found 0
in household chemicals such as -200,000 2014 2015 2016
washing-up liquids and drums for -400,000
industrial packaging.
Polypropylene (PP)
Similar to PE, PP had a positive growth in exports which doubled from 2014 to 2015 hence
narrowing down the trade deficit from RM 1.05 billion to RM 767 million in the respective
years.
Figure 6 shows the trade statistics for PP from 2014 to 2016 (H1).
Figure 6 : Polypropylene
2016 H1
Year
2015 Balance of Trade

Export
2014 Import
-400,000 -200,000 0 200,000 400,000 600,000

Weight (tonnes)
Lotte Chemical Titan remains the only active PP manufacturer in Malaysia with nameplate
capacity of 400,000 tpa. However Petronas RAPID project will be the biggest PP producer once
it comes online with capacity of producing 900,0004 tpa.
Besides packaging, PP is extensively used in the automotive industry as well as carpeting and
upholstery.
4
Figures stated as of December, 2015
6
Polyvinyl Chloride (PVC)

Figure 7 : PVC
Figure 7 exhibits the
Import Export Balance of Trade
downward trend of PVC
import expenditures by 3% 250000 0
from 2014 to 2015 following -20000
200000 -40000
the decline in imports by
Weight (tonnes)
-60000
1.23%. Malaysias PVC 150000
-80000
exports were roughly around -100000
100000
20% of total PVC imports in -120000
both years, highlighting the 50000 -140000
-160000
heavy reliance on imports.
0 -180000
One of the key reasons is the 2014 2015 2016 H1
shutdown of Petronas PVC
plants in Kertih at the end of 2012.
PVC finds widespread use in building, packaging, electrical and electronic and healthcare
applications.5
Polycarbonates (PC)
Figure 8 : Polycarbonates
80000 0 From the figure on the left,
-10000 58,755 tpa of PC were
Weight (tonnes)
60000 -20000 imported last year down from

-30000 72,790 tpa in the previous
40000
-40000
year. Our top exporters of PC
20000 -50000
-60000
are Singapore and Thailand.
0 -70000
Malaysia, however exported
2014 2015 2016 H1
only 8,514 tpa and 14,788 tpa
Import Export Balance of Trade of PC in 2014 and 2015
respectively.
Toluene
Trade deficit of toluene improved by almost 100% from 2014 to 2015. Total imports raised
from 27,460 tpa to 31,766 tpa in the same period whilst exports had a relatively more
significant raise at 52%.
5
http://www.bpf.co.uk/plastipedia/polymers/pvc.aspx
7
Ethylene Glycol (EG)
Malaysias EG exports were maintained at around 146,000 tpa in 2014 and 2015 while import
level plunged from 13,414 tpa to 9,968 tpa in the same period. EG is commonly used as a
coolant and antifreeze.
Acrylonitrile Butadiene Styrene (ABS)
Figure 9 : Acrylonitrile-Butadiene-Styrene (ABS)
2016 H1
2015
2014
0
50000
100000
150000
200000
Weight (tonnes)
Balance of Trade Export Import
Another specialised petrochemical product ABS had a net export volume of 146 million kg last
year, as shown in Figure 9. China, Indonesia, Thailand and Vietnam are among the biggest
markets for Malaysian ABS.
End products of ABS are commonly found in electrical and electronic applications, and
automobiles.
Polyacetals (PA)
Polyacetals, or known as polyoxymethylene or polyformaldehyde have export value of half a

billion Ringgit last year for 85,581 tonnes. The import value of PA last year was RM7.6 million.
Polyethylene Terephthalate (PET)
PET imports decreased by 11.5% in 2015 from the previous year, with the value of import
declined by 15.8% in the same period. Net exports grew by 26,000 tonnes from 2014 to 2015
due to the fall in imports and increase in exports. Trade surplus rose by RM 51 million in the
same period.
Benzene
Export volumes for the past 2 years remained at approximately 200,000 tpa while import
volumes reduced from 148,782 tpa in 2014 to 90,822 tpa in 2015.
8
MALAYSIAS PLASTIC TRADE AT A GLANCE
In summary, based on the trade statistics tabulated above, we are able to identify the main
plastic feedstocks that were imported into our country for the course of 30 months.
Polyethylene, for an instance, had the highest volume of imports with 2.5 mtpa, constituting
of nearly 42% of total feedstock imports during the above mentioned period. Polypropylene,
with total net import volume of 1.1 mtpa came second and followed by PVC with 0.5 mtpa of
net imports.
Malaysia is currently a net importer for plastic feedstocks and will likely to remain so in a few
years. The current situation faced by our plastic manufacturers is the reason why Malaysia is
an importing country for plastic feedstock for now.
Table 1: Underlying Factors for Malaysias Plastic Imports

1. Lack of Capacity Malaysia is still lagging behind in producing capacity
compared to other Asia Pacifics countries. In result of
the domestic capacity shortage, plastic manufacturers
are forced to import from overseas suppliers.
2. Secure of supply Local plastic manufacturers will continue to also secure
their supply stock from other feedstock producers
abroad as precautionary steps to avoid sudden shortage
of feedstock or any unfortunate events that can occur
in the local industry.
3. Market Structure Economically, relying to only one producer will induce
monopoly market in the country. With high demand
from local market and no close substitutes to supply, a
monopoly supplier can increase the price to
unnecessary level and derive super-normal profits. Our
local plastic manufacturers understand the importance
of evading the monopoly market, therefore they will
import economical feedstocks from overseas producer
to achieve economies of scale.
4. Long Term Contract Long term contracts are common occurrence in
Obligation petrochemical industry. Most of the local plastic
manufacturer have entered in a long term contract with
expected maturity date in few years from now.
9
Figure 13 : Malaysias Top 10 Import Sources
2014 2015 2016 (H1)
11% 11% 9%
10%
8% 10%
25% 33%
8% 34%
6% 6%
2.165 2.382 1.246
4% 3% mtpa
mtpa mtpa 4%
4% 4%
4%
3%
30% 24% 24%
3%
3% 4% 3%
3% 4%
2% 3%
Figure 13 shows the listing of Malaysias top 10 trade partners for plastic feedstocks from
2014 to June 2016. With robust industry growth and expanding capacity, Saudi Arabia and
Singapore have consistently been Malaysias Top 2 import sources. Their advancement as the
largest exporters is underpinned by their feedstock competitiveness and employing latest
technologies in their production plants.
10
MOVING FORWARD: PIPC TO SPEARHEAD THE PETROCHEMICAL INDUSTRY
PIPC to increase capacity for Malaysia
Global petrochemical and plastic demand is projected to expand on average 4% to 5% every

year until 2020. Asia Pacific promises large domestic market and is expected to be the most
attractive market in the future due to its current low per capita consumption and improved
income per capita. The combination of the economic growth and also demographic trends
have stimulated the growing demand for plastic products.
However, even with all the additional petrochemical projects contributing to regional
production taking place between 2011 until 2015, Asia Pacifics petrochemical capacity will
still fall short behind the rapidly growing demand.
Figure 10 : Polyethylene Capacity vs Demand : 2011 - 2020
Figure 11 : Polypropylene Capacity vs Demand : 2011 - 2020
11
Figure 12 : PVC Capacity vs Demand : 2011 2020
Figures 10, 11 and 12 depict the capacity shortfall in producing main plastic feedstocks namely
polypropylene, polyethylene and PVC faced by Asia Pacific countries even after the additional
capacity post year 2015. As shown in the figure 11, Asia Pacifics demand for polypropylene
products is forecasted to reach around 46.3 mtpa from 2015 to 2020, but the current capacity
in 2015 sits at 12.7 mtpa lower. As for polyethylene, the capacity shortfall is expected to be
around 9.8 mtpa while for PVC the capacity deficit is as high as 34.5 mtpa. These scarcity are
currently being filled by Middle East, North American and European producers.
Realizing the increasing need to reduce our dependency on imported feedstock and increase
our own production capacity, Malaysia is establishing Pengerang Integrated Petrochemical
Complex (PIPC) to spearhead the petrochemical industry transformation plan. PIPC will play
the role in addressing the trade imbalance we experience currently by producing the
petrochemicals that Malaysia has the comparative advantage of.
With the huge investment in PIPC, Malaysia is set to grab the opportunity to lead the
petrochemical capacity in Asia Pacific region and to further propel the development of plastic
industry in Malaysia in a more cost-effective manner.
These new petrochemical plants in Pengerang will provide capacity for Malaysia to produce
an extensive range of petrochemicals feedstock needed in producing plastic materials. Main
feedstocks for plastic such as propylene, ethylene and polypropylene will have a boost in
production after the commissioning of RAPID Pengerang facilities and the expansion of
capacity in Pasir Gudang by PETRONAS and Lotte Chemicals respectively.
12
Table 2 : Malaysia Current and Future Nameplate Capacity

Plant Location Current Nameplate Capacity Future Nameplate
Capacity
Lotte Chemical Pasir Ethylene and Propylene: Ethylene and
Titan (M) Sdn Bhd Gudang 1.09 mtpa Propylene: 1.30
Aromatics: 90,000 tpa mtpa
Aromatics:
140,000 tpa
PRPC Polymers Sdn Pengerang To be operational by Polypropylene,
Bhd 2019 mLLDPE: 1.75
mtpa
PRPC Glycols Sdn Pengerang To be operational by Ethylene Oxide,
Bhd 2019 MEG, DEG,
TEG: 1.4 mtpa
PETRONAS Kertih Ethylene Glycols and N/A
Chemicals Glycol Ethylene Oxide: 765,000
Sdn Bhd tpa
PETRONAS Kertih Ethylene and propylene: N/A
Chemicals Olefins 684,720 tpa
Sdn Bhd
PETRONAS Kertih Ethylene : 400,000 tpa N/A
Chemicals Ethylene
Sdn Bhd
PETRONAS Gebeng Propylene, MTBE and n- N/A
Chemicals MTBE butane: 815,000 tpa
Sdn Bhd
Idemitsu Styrene Pasir Styrene Monomer: N/A
Monomer (M) Sdn Gudang 240,000 tpa
Bhd
BASF PETRONAS (Acrylics Crude Acrylic Acid, glacial N/A
Chemicals Sdn Bhd Complex) acrylic acid and other
Gebeng chemicals : 910,000 tpa
For Malaysia, the existing challenges of increasing new production capacity lie between the
cost structure and the availability of feedstock. Establishing new petrochemical plant is costly,
in view of the high investments required in the provision of dedicated infrastructure facilities.
With cyclical nature of global and local petrochemical markets, in addition to volatility and
shortfall of feedstock capacity, some local plastic manufacturers are disposed to import
plastic feedstock to achieve economies of scale.
As such, in order to stimulate development in the industry, the Government could offer
attractive incentives and investment-friendly policies for industry players to invest in PIPC.
Some of the main incentives are the award of Pioneer Status and the Investment Tax
Allowance. The incentives may come in fiscal and non-fiscal forms which will be made
available for a certain period of time until the industry reach the optimum level.
13
Malaysia to have feedstock competitiveness

One of the most important factors in the economics of plastic industry is the cost of
feedstock. Feedstock cost takes the largest portion of overall operating cost. This is the reason
why all petrochemical producers pays huge attention on producing competitive feedstock for
their operation. For Malaysian plastic manufacturers, finding competitive plastic feedstocks
is of the utmost importance in order to have a better chance to widen their profit margin in
the aggressive market.
Table 3 : Typical Petrochemical Cost Structure
Net Margin In Asia Pacific, there is

great potential to
Variable Cost / Utility Cost
reduce operating cost
exposure. To maximise
Fixed Cost profit, industry players
should target reducing
Feedstock Cost these two costs by
having a competitive
feedstock and low
utility cost.
As Malaysia is heading in the direction to be a major petrochemicals producer of choice,

feedstock competitiveness must be considered thoroughly. It is important to measure how
various feedstock capacity and price scenarios will impact the value of petrochemical
products and other related industries such as plastic industry. With ability to produce
competitive feedstock locally, Malaysia plastic industry may gradually reduce their
dependency for imported plastic feedstocks.
PIPC will be the catalyst that transforms Johor into a new regional downstream oil and gas
hub in the coming years and will position the state with opportunities to improve our
feedstock competitiveness.
Feedstock Competitiveness: Case study of Saudi Arabia
Saudi maintains their position as the cost-efficient petrochemicals manufacturer, thanks to

their cheap ethane, Saudis primary petrochemicals feedstock. Feedstocks make up to more
than half of total cost to manufacture petrochemicals.
As part of their mitigation plans to cushion the ramifications of the oil glut, Saudi increased
the price of ethane by 133%, from $0.75 per MMBtu to $1.75 per MMBtu on 1 January 2016
to cut government subsidies. Despite the increase in price, the cost of Saudi feedstocks
remains among the lowest in the world, shown in the figure below.
14
Figure 14 : Feedstock Prices
While the market seemed to favour gas-based petrochemicals pre-oil crisis in 2014, the tables
have turned now as oil has plunged more than 70% its price eversince. Realising the
fluctuations of the oil market, Sadara project in Al Sharqiya will have a flexible cracker to
process both ethane and naphtha. This could be the reason why PETRONAS decided to focus
on naphtha as the feedstock for their RAPID project in Pengerang.
Feedstock Competitiveness: Case study of Singapore
Singapore is one of the world`s leading exporting refinery nations and the most cost-effective
petrochemicals hubs. With heavy investments on their technologies and infrastructures,
Singapore has transformed itself into an oil hub in Asia, although the Island State has no
natural oil or gas resources. Companies based in Singapore are able to price their
petrochemicals competitively in the international market. Singapore is currently home to
some of the worlds petrochemical giants namely BASF, Lanxess, ExxonMobil, Dupont, Mitsui
Chemical, Chevron Texaco, Shell, Sumitomo Chemical, CIBA and Huntsman.
Singapore does not let its biggest constraint land availability, to refrain them from
expanding its petrochemical industry. South East Asias first underground oil storage, with
storage capacity of 1.47 million cbm, is located 150m below the ground and 130m beneath
Banyan Basin. The Jurong Rock Caverns is linked with the neighbouring refineries and
petrochemical companies.
In addition, Singapore was the first in the world to develop an oil-to-chemicals (OTC) project
back in 2014 when ExxonMobil launched their ground breaking technology that can crack
anything from light gases to heavy liquids including crude. The OTC complex has the edge over
the traditional naphtha crackers, as it can tap into the premium that naphtha commands over
crude oil in Southeast Asia. The OTC has been in operational since 2014.
15
CONCLUSION
Looking at the current and prospective projects in the petrochemicals industry, Malaysia is
certainly heading in the right direction to place itself in the global market more competitively.
Moreover the government in 2015 announced that the total oil and gas investment in PIPC
represents 43% of committed investments for ETP, with the value of RM 99 billion. The single
largest committed investment indicates that PIPC will take the lead in meeting Malaysias
future downstream demand.
PIPC will play key roles in increasing Malaysian plastics capacity to an optimal level by
producing feedstocks we have comparative advantage of. In addition, JPDC should also focus
on attracting producers of the highest imported feedstocks namely PVC, PP, PE, styrene and
ACN to invest in PIPC since these feedstocks present vast potentials and are extensively
needed in producing plastic products. JPDC need to target these feedstocks producers6 which
are currently operating in other parts of Malaysia to invest in PIPC in effort to have holistic
petrochemical value chain and subsequently paving the path to reduce our dependence on
imported feedstocks.
In order to further promote the growth of plastics industry, Malaysia plastics industry is
indeed in need to adopt new strategies that can focus on diversifying plastic feedstock and to
also invest in establishing inventive R&D power houses that promote scientific findings on
efficient petrochemical process.
Furthermore Malaysia need to promote synergies in the industry with the support of the
Government. It is vital for Malaysia to have a strategic roadmap to make sure that the
presence of global petrochemical companies such as BASF and Lotte, together with our own
PETRONAS to create synergies with the local or smaller plastic producers. Most of these small
players generally lack economies of scale, capital capability, technical expertise and marketing
encouragement. This proper scheme of encouraging consolidation within the industry, via
strategic partnerships and other forms of incentives by Government will ensure the local
producers to benefit from funding support, technology transfers, cost efficiencies and larger
market penetration specifically in areas such as plastic packaging and consumer and industrial
products.
Although Malaysia will gradually reduce import dependency on plastic feedstocks, becoming
a net exporter in the near future should not be the main focus, at least for now. As explained
in the earlier part of this report, Malaysia might need some time for the industry to have the
capabilities in terms of production capacity, technology readiness and address the current
restrictions such as long term contract obligation before taking the path to be the net
exporting country.
6
These feedstocks producer are presented in the Potential Post Cracker Products report.
16
APPENDICES
Appendix 1: Trade Volume 2014 (tonnes)
Feedstock Import Export Balance of Trade
Acrylonitrile Butadiene
Styrene (ABS) 52,930.03 181,629.58 128,699.55
Acrylonitrile (ACN) 96,884.82 701.23 (96,183.59)
Benzene 148,782.01 199,357.17 50,575.16
Ethylene Glycol (EG) 13,414.46 146,459.76 133,045.29
Expansible Polystyrene
(EPS) 29,853.70 1,293.33 (28,560.37)
Polycarbonates (PS) 72,790.15 14,787.73 (58,002.42)
Polyethylene
Terephthalate (PET) 95,420.55 166,524.80 71,104.25
Polyacetals (PA) 6,809.44 78,638.24 71,828.80
Polyethylene (PE) 931,712.72 764,940.20 (166,772.52)
Polypropylene (PP) 391,007.46 190,933.18 (200,074.28)
Polystyrene (PS) 74,840.96 56,763.60 (18,077.36)
Polyvinyl Chloride (PVC) 207,530.49 36,884.42 (170,646.07)
Styrene 145,913.67 66,471.77 (79,441.90)
Toluene 27,459.76 17,131.28 (10,328.48)
Total 2,295,350.20 1,922,516.27 (372,833.93)
17
Appendix 2 : Trade Volume 2015 (tonnes)
Styrene (ABS) 42,494.51 189,324.23 146,829.73
Benzene 90,822.45 211,200.72 120,378.28
(EPS) 29,914.30 1,222.74 (28,691.56)
Polyethylene
Polyacetals (PA) 7,619.62 85,581.07 77,961.44
Polyethylene (PE) 1,085,107.97 1,043,390.19 (41,717.78)
Polystyrene (PS) 61,378.75 108,594.47 47,215.72
Styrene 169,321.58 85,982.14 (83,339.44)
Toluene 31,765.63 26,029.62 (5,736.01)
Total 2,453,718.63 2,510,193.34 56,474.70
18
Appendix 3: Trade Volume 2016 (H1) (tonnes)

Styrene (ABS) 21,324.24 103,369.48 82,045.24
Benzene 32,781.92 100,614.71 67,832.79

(EPS) 15,308.11 0.28 (15,307.83)

Polyethylene
Polyacetals (PA) 4,639.15 49,609.00 44,969.85
Polyethylene (PE) 546,623.78 489,942.50 (56,681.28)
Polystyrene (PS) 37,843.84 51,690.18 13,846.33
Styrene 103,180.96 15,203.32 (87,977.64)
Toluene 18,334.04 10,819.26 (7,514.78)
Total 1,291,569.84 1,252,858.18 (38,711.66)
19
Glossary
mtpa Million Tonnes Per Annum
ETP Economic Transformation Programme
EPP Entry Point Project
Mmbtu Million British Thermal Unit
PIPC Pengerang Integrated Petrochemical Complex
RAPID Refinery and Petrochemical Integrated Development
tpa Tonnes Per Annum
20
REFERENCES:
1. Department of Statistics Malaysia
2. PETRONAS Chemicals Group Berhad , Corporate Presentation April 2016
3. APIC, Malaysia Petrochemical Country Report 2015
4. https://www.weforum.org/agenda/2014/09/top-10-competitive-economies-asia-
pacific/
5. http://www.sgc.org.sg/fileadmin/ahk_singapur/DEinternational/IR/diffIR/Oil_Petroc
hemicals_2014.pdf
6. http://uk.reuters.com/article/exxon-singapore-petrochemical-
idUKL3N0KH2VU2014010
7. GlobalData, Petrohemical Market Analysis, 2012
8. KPMG,Asia Pacifics Petrochemical Industry 2014
21

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OVERVIEW OF MALAYSIAS PLASTIC MARKET

26th September 2016

NATIONAL KEY ECONOMIC AREAS (NKEAs)

Figure 1 : Balance of Trade

Figure 2 : Import of Plastic Feedstocks

TRADE STATISTICS FOR MAIN PLASTIC FEEDSTOCKS

RM 478 million for 112,426 tpa 150,000

Styrene is mainly consumed in (85,000)

On the contrary, PS is moving towards export-oriented, as explained in Figure 4. Imports have

Expandable polystyrene (EPS)

PE is mainly produced in three forms

2015 Balance of Trade

-400,000 -200,000 0 200,000 400,000 600,000

Polyvinyl Chloride (PVC)

60000 -20000 imported last year down from

Ethylene Glycol (EG)

Figure 9 : Acrylonitrile-Butadiene-Styrene (ABS)

Balance of Trade Export Import

Polyacetals, or known as polyoxymethylene or polyformaldehyde have export value of half a

MALAYSIAS PLASTIC TRADE AT A GLANCE

Table 1: Underlying Factors for Malaysias Plastic Imports

Figure 13 : Malaysias Top 10 Import Sources

2014 2015 2016 (H1)

MOVING FORWARD: PIPC TO SPEARHEAD THE PETROCHEMICAL INDUSTRY

PIPC to increase capacity for Malaysia

Global petrochemical and plastic demand is projected to expand on average 4% to 5% every

Figure 10 : Polyethylene Capacity vs Demand : 2011 - 2020

Figure 11 : Polypropylene Capacity vs Demand : 2011 - 2020

Figure 12 : PVC Capacity vs Demand : 2011 2020

Table 2 : Malaysia Current and Future Nameplate Capacity

Malaysia to have feedstock competitiveness

Table 3 : Typical Petrochemical Cost Structure

Net Margin In Asia Pacific, there is

As Malaysia is heading in the direction to be a major petrochemicals producer of choice,

Feedstock Competitiveness: Case study of Saudi Arabia

Saudi maintains their position as the cost-efficient petrochemicals manufacturer, thanks to

Figure 14 : Feedstock Prices

Feedstock Competitiveness: Case study of Singapore

Appendix 1: Trade Volume 2014 (tonnes)

Feedstock Import Export Balance of Trade

Acrylonitrile (ACN) 96,884.82 701.23 (96,183.59)

Benzene 148,782.01 199,357.17 50,575.16

Ethylene Glycol (EG) 13,414.46 146,459.76 133,045.29

Polycarbonates (PS) 72,790.15 14,787.73 (58,002.42)

Polyacetals (PA) 6,809.44 78,638.24 71,828.80

Polyethylene (PE) 931,712.72 764,940.20 (166,772.52)

Polypropylene (PP) 391,007.46 190,933.18 (200,074.28)

Polystyrene (PS) 74,840.96 56,763.60 (18,077.36)

Polyvinyl Chloride (PVC) 207,530.49 36,884.42 (170,646.07)

Styrene 145,913.67 66,471.77 (79,441.90)

Toluene 27,459.76 17,131.28 (10,328.48)

Total 2,295,350.20 1,922,516.27 (372,833.93)

Appendix 2 : Trade Volume 2015 (tonnes)

Feedstock Import Export Balance of Trade

Acrylonitrile (ACN) 99,819.99 44.55 (99,775.43)

Benzene 90,822.45 211,200.72 120,378.28

Ethylene Glycol (EG) 9,968.40 146,377.88 136,409.49

Polycarbonates (PS) 58,755.31 8,514.38 (50,240.93)

Polyacetals (PA) 7,619.62 85,581.07 77,961.44

Polyethylene (PE) 1,085,107.97 1,043,390.19 (41,717.78)

Polypropylene (PP) 477,375.40 381,873.33 (95,502.06)

Polystyrene (PS) 61,378.75 108,594.47 47,215.72

Polyvinyl Chloride (PVC) 204,971.13 40,149.73 (164,821.40)