SCG CEO: China's Overcapacity Is 'A Fact of Life'

Thammasak Sethaudom, president and CEO of SCG, stated at the Fortune Southeast Asia 500 Summit that overcapacity from mainland China is a reality in the region's petrochemical industry.

Overcapacity occurs when factories produce more than customers can buy, and China's rapid expansion has squeezed producers in other parts of the world.

According to industry research firm ICIS, China's exports of polypropylene, a common plastic, increased from 1.3 million tonnes in 2022 to 3.1 million tonnes in 2025. Analysts estimate exports could reach 5.1 million tonnes in 2026 if current trends continue.

Thammasak argued that individual Southeast Asian markets are too small to absorb the impact of China's production surge, emphasizing the need for larger-scale operations serving the entire ASEAN region.

SCG is scaling up production in Vietnam, replacing smaller factories with a larger plant, and has filed to merge its Thai olefins and polyolefins business with PTT Global Chemical, Thailand's largest petrochemical company.

The proposed merger, valued at 187 billion Thai baht ($5.5 billion), would see SCG Chemicals hold 44% of the new venture, with shareholder votes set for December 3.