Thailand’s industrial giant Siam Cement Group (SCG) is set to restart operations at its $5.4 billion Long Son Petrochemical Complex in Vietnam this August, nearly a year after a temporary shutdown. This strategic move signals SCG’s flexible adaptation to shifting global trade dynamics, particularly in response to new U.S. tariffs and regional supply chain disruptions.
Located near Ho Chi Minh City, the Long Son complex was once SCG’s flagship project in Southeast Asia’s petrochemical sector. It began commercial operations in late 2023, only to be suspended in October 2024 due to market saturation caused by oversupply from China. This led to a significant financial setback for SCG, with a recorded loss of $304 million in 2024.
Now, according to SCG Chemicals CEO Sakchai Patiparnpreechavud, the company is ready to resume operations at the end of August 2025, anticipating a slight improvement in margins as crude oil prices decline.
"We can’t be certain of a profit just yet,” Sakchai admitted during a recent press briefing, “but keeping the plant idle would only add to accumulated losses.”
The restart also prepares the facility for a critical technological transition—from using naphtha to ethane as feedstock. Ethane is not only cheaper but also considered more efficient, and SCG believes this shift will be a "game changer" for its long-term competitiveness.
One of the key incentives for SCG’s relaunch is Vietnam’s new 2% import tariff on certain types of polyethylene, effective from July 2025. This policy aims to protect domestic production and support large-scale investments like Long Son.
Polyethylene is one of the core outputs of the Long Son complex and plays a vital role in various industrial and consumer sectors, including packaging and plastics.
With operations spanning Thailand, Vietnam, Indonesia, and other ASEAN nations, SCG benefits from geographic diversification. In Indonesia, the group holds a 30% stake in leading petrochemical firm Chandra Asri Pacific.
According to SCG President Thammasak Sethaudom, this regional presence allows the company to adjust production locations in response to global trade changes. As the U.S. under President Trump introduces more protectionist measures, SCG can shift supply sources to mitigate impact.
“We don’t rely on a single country for our operations, and that gives us a strong competitive edge,” Thammasak noted.
Beyond petrochemicals, SCG is investing in environmentally friendly building materials. The group plans to launch a new cement facility in Vietnam this August with a daily capacity of 8,000 tons. The plant will cater to both domestic consumption and exports to the U.S., Canada, and Australia.
This move comes shortly after President Trump signed a 19% tariff order on imports from Cambodia, Malaysia, and Thailand—countries where SCG also operates. The new tariffs could enhance Thailand’s relative advantage, further benefiting Thai multinationals with a diversified footprint.
“Thailand’s favorable trade status with the U.S. will significantly boost our economy,” Thammasak stated.
In the first half of 2025, SCG’s revenue fell 1% year-over-year to 249 billion Baht (~$6.9 billion). However, EBITDA rose 5% to 30.3 billion Baht, reflecting tighter cost controls.
Notably, net profit doubled to 18.4 billion Baht, primarily due to a one-time gain from a chemical business restructuring. Excluding this extraordinary item, core profit plunged 47% to just 3.2 billion Baht—mainly attributed to costs related to restarting the Long Son plant and inventory write-downs.
SCG anticipates a tough second half of 2025, citing ongoing global headwinds such as tariffs, geopolitical instability, and energy price volatility.
CEO Sakchai warned that the current oversupply in the Southeast Asian chemical market may persist until 2027–2028, when less efficient producers are forced to exit. In the meantime, SCG will focus on cost efficiency and leveraging AI-driven automation to enhance productivity.
“Global and regional growth is slowing,” Thammasak remarked. “To stay competitive, we must embrace AI, robotics, and automation—technologies that will become even more essential in the future.”
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