US firm eyes Vietnam’s petrochemical industry

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The chair of the Vietnam Energy Association, Tran Viet Ngai, said that foreign companies see great development potential for Binh Son Refining and Petrochemical Co Ltd (BSR), the operator of the Dung Quat Oil Refinery in central Quang Ngai province. 

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BSR will hold an IPO of 7.79 percent of its chartered capital

It will hold an IPO (initial public offering) of 7.79 percent of its charter capital, or 242 million shares, on the HCM City Stock Exchange with a starting price of $0.64 (VND14,600) per share. Binh Son is expected to be the biggest ever IPO in Vietnam, slated for January 17. The US-based Polestar, through a representative in Vietnam, wants to buy the entire 49 percent of BSR stake to be offered at the IPO. The representative said if Polestar can become the strategic partner of BSR, it will upgrade and expand the oil refinery and build bonded warehouses to lease to businesses which import petroleum products temporarily for later re-export.  It has also promised to be responsible for outlets selling products from BSR. Commenting about the US investor’s interest in BSR, Ngai said Polestar is aiming to make a profit, not from oil refining, but from petrochemistry. The long-term development prospects of BSR are in petrochemistry.

Vietnam still doesn’t have a petrochemical technology. Petrochemicals can bring great added value with products such as polymer particles, fibers and bitumen which are very expensive in the world

“Vietnam still doesn’t have a petrochemical technology. Petrochemicals can bring great added value with products such as polymer particles, fibers and bitumen which are very expensive in the world,” Ngai commented.  “At present, BSR earns money from oil refining, and producing petrol and oil products, which cannot bring high value,” he explained. The expert believes that the US firm is eyeing a 49 percent BSR stake because it wants to become a strategic partner of the Vietnamese company. BSR also had large workshops, seaports and good transport conditions which develop 40-50 million tons of oil a year. In general, BSR’s long-term prospects are excellent. Local newspapers report that Vitol, an energy group, will also attend the IPO. More than 4,000 investors have registered to buy 652 million BSR shares, or 2.7 times higher than the offered amount. Ngai said that only large investors like Polestar can buy a BSR stake, because BSR will need further investment capital of tens of billions of dollars. Ngo Tri Long, an economist, said that the US investor can see the great potential of the petrochemical industry in Vietnam.  Long believes that investment from the US company would be good for Vietnam because it has powerful financial capability and advanced technology.

Mai Chi

Source: VietNamNet

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