Thai industrial conglomerate Siam Cement Group (SCG) has ink deals to borrow loans worth over US$3.2 billion in a move to kick-start the construction of Vietnam’s first fully integrated petrochemical-complex project, Long Son Petrochemicals (LSP). The loan agreements were signed with six financial institutions namely Sumitomo Mitsui Banking Corp, Mizuho Bank, Bangkok Bank, Krungthai Bank, Siam Commercial Bank and Export-Import Bank of Thailand, The Nation reported.
The loans have a tenor of 14 years. Sumitomo Mitsui Banking is the project’s financial adviser.
The loans will help accelerate the pace of the project which has lagged behind its initial schedule, and meet soaring demand for petroleum products in Vietnam which is as high as 2.3 million tons per year, SCG said on Monday.
Thailand’s largest cement maker in February this year held a breaking ground ceremony for its flagship project Long Son Petrochemicals, with an estimated investment of US$5.4-billion, with the presence of Vietnamese Prime Minister Nguyen Xuan Phuc.
The plant is set to start commercial operations in the first half of 2023.
LSP is located in Ba Ria-Vung Tau province, which is 100 kilometers from Ho Chi Minh City, the country’s largest economic hub.
The plant’s olefins production capacity will be 1.6 million tons per year for manufacturing high-density polyethylene, linear low-density polyethylene, and polypropylene.
In June 2018, SCG reached an agreement with state-owned energy giant PetroVietnam to acquire a 29% stake of the latter in LSP, making it its 100% owned subsidiary.