ANNUAL REGISTRATION STATEMENTS/ ANNUAL REPORT 2021 (Form 56-1 One Report) PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED
วันนี้…เราไม ต องการเป นที่ 1 แต เรา…อยากก าวไปให ถึง 0 ยกระดับการดำเนินงานสู การสร างมูลค าเพ� � มทางธุรกิจในระยะยาว ก าวสู เป าหมายที่ท าทาย ในการเป นองค กร ที่ลดการปล อยก าซเร� อนกระจกให เป น 0 (Net Zero) ภายในป 2593 ควบคู ไปกับการเติบโตที่ยั่งยืน ด วยแนวทาง Decarbonization ที่ขับเคลื่อนด วย 3 เสาหลัก คือ EFFICIENCY เพ�่ อเพ�� มประสิทธิภาพการ ลดการปล อยของเสีย COMPENSATION-DRIVEN ประยุกต ว� ธีดูดซับคาร บอนจากธรรมชาติและค นหาเทคโนโลยี ดูดซับคาร บอนมาสนับสนุนการดำเนินงานให ได ตามเป าหมาย อย างมีประสิทธิภาพสูงสุด PORTFOLIO-DRIVEN ิจในระยะยาว ังคงรักษา
GC, as a global corporate citizen, is seriously concerned about climate change because this matter affects us all. In response, we are working hard on environmental preservation with our expl icit plan and strong determination to guarantee a healthier environment for the next generation. This goal cannot be achieved in isolation, so TOGETHER TONET ZERO requires all of us to foster environmental sustainability on earth.
Leverage our expertises and technologies to maximize efficiency of our assets by reducing energy consumption and resources use. GC strives to develop & deploy emerging low-carbon technologies and renewable energy to further strengthen the business sustainability. Efficiency-Driven
These are example of our projects which employ low-carbon technologies and renewable energy sources. Use of Biogas instead of hydrocarbon fuel to decrease greenhouse gas emissions The Solar Rooftop Project Collaborations and investments through Corporate Venture Capital (CVC) in clean energy technology: Green and Blue Hydrogen BIO CO2
Transforming our long-term business structure to a low-carbon business by management processes relevance and reshape investment direction towards the High Value Business (HVB), green chemicals, and recycled products. While implementing Circular Economy concepts to create innovations & solutions to our customers. Portfolio-Dr
By obtaining the Circular Economy certification standard (BS8001:2017), YOUTURN is only the platform has been certified on its well management of all collected plastics for being recycled & upcycled. CO2 พลาสติก ยืด พลาสติก เเข็ง
Carbon offsetting is another key decarbonization actions after the Efficiency-Driven and PortfolioDriven pillars.We offset our emissions through nature-based solutions s u c h a s r e f o r e s t a t i o n , a n d technology-based solutions such as Carbon Capture and Storage (CCS).Compen
GC is focused on our drive toward NET ZERO emissions and shared our ideas on tackling climate change at the 2021 United Nations Climate Change Conference (COP26) in Glasgow, Scotland. GC HIGHLIGHTS IN 2021 Dow Jones Sustainability Indices (DJSI) GC has been ranked first in the world for sustainability in the 2021 Dow Jones Sustainability Indices (DJSI) Chemical Sector for three consecutive years, and placed among the top ten in the DJSI World Index and Emerging Market Index for nine consecutive years. UN Global Compact LEAD Since 2016, GC has been ranked in the top tier of the UN Global Compact LEAD initiative, along with 38 other organizations across the world, for our determination in developing strategies for achieving the UN SDGs goals through collaboration with our stakeholders. GC leveled up to the low carbon transition framework and targeted the NET ZERO greenhouse gas emission by 2050. Carbon Disclosure Project GC was ranked as a leader in water management (A Level) and environment management in climate change (A-Level), which is the highest rank of any business in Thailand’s chemical industry. International Sustainability & Carbon Certificate GC subsidiaries (2 plants) i.e. olefins cracker plant and polyethylene plant, have been certified in sustainability and carbon reduction (ISCC PLUS) by International Sustainability & Carbon Certificate. This proves that GC have commitment and plan to transform the corporate to support bio-economy and circular economy.
Acquiring allnex led to GC becoming a global leader in the chemical business GC increased its investment in allnex, the global leader in resin coatings, reflecting our vision to be a leader in the global chemical industry and grow high-value businesses. We shifted our portfolio from commodity chemicals to performance chemicals to meet our goal of increasing our production of performance chemicals to 35% by 2030. Moreover, allnex is the leader in green technology, and is committed to reduce its carbon emissions, while having been a pioneer in sustainable innovation for the resins coatings industry for over 70 years. GC’s investment in allnex embodies the principle of TOGETHER TO NET ZERO. RESPONSIBLE CARING PORTFOLIO-DRIVEN EFFICIENCY-DRIVEN SMART OPERATING GC aims to enhance efficiency by maximizing resource utilization and raising awareness of the importance of energy conservation during the production process. In 2021, GC has initiated 82 projects for energy conservation. Greenhouse gas emissions (scope 1 and 2) are at 8.19 million tons CO2 equivalent. achieving the targeted goal (not exceeding 8.56 million tons CO2 equivalent) Reduced 7 consecutive years of zero landfill disposal.
LOOP CONNECTING owns of, washable, sed up to ucing the amount of medical waste. The YOUTURN project success is being converted into a YOUTURN application, aiming to cover the entire waste management pipeline. ขนส งและคัดแยกขยะ จ� ดรับขยะพลาสติก โรงงานร� ไซเคิล กระบวนการอัพไซเคิล Recycling Hub เม็ดพลาสติกร� ไซเคิล ผลิตภัณฑ อัพไซคลิง Drop point for plastic waste Transport to waste separation plant Recycle Upcycle Recycled plastic pellets Upcycled products The “Yak Kuad Chuay Mor” project collected 120 tons of PET bottles which have been upcycled into 6,345 Level 2 PPE Gowns for medical staff. They were donated to over 50 hospitals throughout Thailand. Upcycling Upstyling the second year is a home and living themed collaborative project between GC and world-renowned designers. Its goal is to build a loop connecting customers and stakeholders with efforts to recycle plastics and transform them into upcycled products. 180 square meters of upcycled cloth was donated by GC to the 2021 Miss Earth Thailand competition. The cloth was produced from 2,520 PET bottles, Which is equivalent to planting 25large trees, for 19 beauty contestants’ evening dresses to raise awareness about social responsibility and environment preservation.
COMPENSATION-DRIVEN Huai Mahat Forest Restoration Project certified by the Thailand Greenhouse Gas Management Organization (Public Organization), the project aims to promote private sector participation in the Low Emission Support Scheme (LESS) in forestation efforts. The Eco-Forest Rayong Wanarom Project Is under supervision of the GC Group through GC Estate and is registered as a Thailand Voluntary Emission Reduction Program (T-VER), with the Thailand Greenhouse Gas Management Organization, under the forest and green area category. The project aims to plant a sustainable forest under the eco forest principle. It has a greenhouse gas uptake of tons of CO2 equivalents, which is equivalent to planting large trees. Currently, GC is studying Carbon Capture Utilization and Storage (CCUS) as well as new technology access via corporate venture capital, with coordination among the company’s groups, to increase business opportunities. Our carbon capture target is 6.30 million tons by 2050. From 2013 to 2018, the Project showed an uptake amount of tons of CO2 equivalents, anting large trees.
Vision, Mission and Corporate Strategies 02 Financial Highlights 08 Awards and Recognitions 10 Major Events and Activities in 2021 12 Message of the Chairman 22 CONTENTS 24 BUSINESS OPERATION AND PERFORMANCE Business Structure and Operation 26 Business Structure 28 Business Value Chain 30 Nature of Business 35 - Refinery and Shared Facilities 36 - Aromatics 38 - Olefins 40 - EO-Based Performance Business Unit 42 - Phenol Business Unit 44 - Polymers Business Unit 46 - Green Chemicals Business Unit 49 - Performance Materials and Chemicals 54 - Services and Others 57 Market and Competition 59 Shareholding Structure in Subsidiaries 70 and Affiliates Securities 74 01 114 CORPORATE GOVERNANCE Corporate Governance Policy 116 Corporate Governance Structure and Material Facts 132 - Organization Structure 132 - Board of Directors 133 - Sub-Committees 139 - Executives 142 - Employees 146 - Other Important Information 152 Corporate Governance Report 162 Audit Committee Report 188 Report of the Corporate Governance 191 and Sustainability Committee Report of the Nomination 194 and Remuneration Committee Report of the Risk Management Committee 196 Internal Control and Connected Transactions 198 02 Issuance of Other Securities 74 Dividend Payment Policy 75 Risk Management 76 Driving Business Towards Sustainability 88 Management Discussion and Analysis 97 Company Information 112 and Other Important Information
FINANCIAL REPORTS AND FINANCIAL STATEMENTS 214 Report of the Board of Directors’ 216 Accountability to Financial Report Report of the Independent Certified 217 Public Accountants Financial Statements 221 Notes to the Financial Statements 232 03 Technical Terms and Abbreviations 346 Audit and Compliance Units Attachment 4 Assets Used in Business Operations 382 and Details of Asset Valuations Attachment 5 GC Policy and Practices of 392 Corporate Governance and Business Code of Conduct APPENDIX 345 04 Controllers and Company Secretary
VISION, MISSION AND CORPORATE STRATEGIES We d e l i v e r t h e b e s t b u s i n e s s performance through t r u s t w o r t h i n e s s to create fai r and sustainable value for shareholders. “LeadingGlobal” means GC Group, a wo r l d - c l a s s chemical company. “Chemical Company” means GC Group, producers of integrated pe t rochemi ca l s and chemi ca l s throughout the value chain, growing business through local and international investment, wi th a focus on high value-added products. “Better Living” means GC Group, producers striving to deliver values to improve the quality of life with chemicals consumed in the downstream market, being responsible to the society and the envi ronment , as wel l as playing part in encountering climate change. We integrate social and environmental responsibility into our business practices to achieve sustainable development. We provide superior s o l u t i o n s f r o m innovative products and services to be the best choice for our business partners. We build an organization that is prepared for change and learning by providing a happy working env i ronment that promotes the development of employees’ capabilities and abilities, enabling them to meet new challenges with dedication to the organization and to professional excellence. VISION MISSION To be a Leading Global Chemical Company for Better Living 2 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2021
RETURN ON INVESTMENT GC is committed to achieving a return on investment on par with leading industry players in Asia-Pacific. BUSINESS GROWTH GC is committed to being a world-class p e t r o c h em i c a l a n d c h em i c a l manufacturer with an integrated value chain, fostering growth, and generating profit in a sustainable and uninterrupted manner, with emphasis on growing investment in performance and specialty chemicals, low-carbon businesses, and international investments. SUSTAINABILITY GC is commi t ted to operat ing i ts businesses under the framework of sustainability by consistently working towards international acceptance as a global leader in sustainability. OBJECTIVES AND GOALS OBJECTIVES AND GOALS PTT Global Chemical Public Company Limited (GC) systematically reviews its corporate vision, mission and direction annually for alignment with the current business context and long-term trends. It aspires to become a leader in three aspects as follow: 3 BUSINESS OPERATION AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL REPORTS AND FINANCIAL STATEMENTS APPENDIX GC VISION, MISSION AND CORPORATE STRATEGIES
CORPORATE STRATEGIES Overall, in 2021, the economic conditions started to recover resulting from the rolling out of COVID-19 vaccination, the relaxation of border closure measures and the economic stimulus policies of various countries around the world. As a result, petroleum and petrochemical industry has improved overall. However, there remains instability from the spread of new variants of COVID-19 virus, competition pressure and trade barriers, including the implementation of stricter climate change policies as a result of global trend on environment. GC has closely monitored and analyzed various trends and timely adjusted working plans to be in line with existing situations resulting in excellent achievements in our operation amidst challenging business condition and standing as the leader in the area of sustainability whereby we have been ranked the 1st in the chemicals product sector by the 2021 Dow Jones Sustainability Indices (DJSI) for 3 consecutive years Maintaining operational excellence by being determined to improve the operation to be at the 1st Quartile on a long-term basis with a goal to reach a world class operational excellence in safety and production stability, including to improve efficiency in areas on which the Company has been working continuously under MAX Infinity Project and Map Ta Phut Integration (MTP Integration) based on the creation of synergy among Map Ta Phut plants through integrated supply chain management, from feedstock sourcing and manufacturing to product delivery to customers. Furthermore, GC has improved its capacity to compete by updating the production facilities and enhancing the innovative operation (modernization and innovation) to create cost and value advantages over the competitors. STEP CHANGE GC actively strengthens its business competitiveness and improving various aspects of the operation so that the Company can sustainably carry on the business amidst challenges and fluctuation of external situations by enhancing resilience and creating an advantage over competitors to create a foundation for future growth. Below are the key strategies: Elevating the integration and diversification by making investments in upstream petrochemical businesses focusing on feedstock management and feedstock flexibility enhancement so as to achieve competitive production costs and long-term feedstock security and extend the value chain to downstream petrochemical businesses to meet the growing demand. Expand the home base and strategic market to foster long-term distribution security, increase market shares, and expanding opportunities to create business partners in Thailand, Cambodia, Laos, Myanmar, Vietnam, and Indonesia, all of which have consistently shown high growth, as core targets. GC has also set China and India as strategic markets to build sales agility. Implementing market-focused business strategies, placing emphasis on High Value Products (HVP) and diverse applications to better meet the needs of the market and end-users, while also fostering product development collaborations with partners across the value chain, developing markets of the existing products, and generating demand among new customers. 1 and remained within the top-10 for 9 consecutive years, being the only Asian and Thai petrochemical company that has been ranked first for three consecutive years. GC also set target for net zero greenhouse gas emission under both scope 1 and scope 2 by 2050, emphasizing our determination in being an organization that is an example on sustainability at an international level. GC’s business directions and strategic plans strive to build and maintain competitiveness, sustainable business growth, and readiness in various aspects in support of future growth. GC uses these directions and strategic plans as frameworks for business operations and regularly monitor outcomes to accomplish short-term and long-term corporate goals, with emphasis on the following 4 strategic focuses: 4 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2021
Tackling climate change relying on circular economy principle by cooperating with all stakeholders throughout the supply chain under (1) smart operating, (2) responsible caring and (3) loop connecting frameworks focusing on the integration of cost-effective use of resources and efficient waste management together with portfolio management for low emission business and creating consolidated product circularity in order to reduce the greenhouse gas emission and number of used plastic waste. GC is seeking to invest in High Value Businesses (HVB) with a focus on growth products with superior profitability which will meet consumer needs according to megatrends. In 2021, the Company is seeking to acquire the business of allnex Holding GmbH, a world-class producer of industrial coating materials, remarking an important step of the Company towards entering into a High Value Business (HVB) which will cause the Company to grow dramatically and increase the high value business ratio which in turn will help reduce risk from fluctuation of operating results of commodity product. GC also seeks new business opportunities by utilizing Corporate Venture Capital (CVC) to enter new businesses with outstanding technologies and innovations, including low-carbon business which can be used to further strengthen and expand current businesses. Furthermore, to strengthen the ability to compete in a long-run, GC seek opportunity to establish the second business base in other country (i.e., the second home base) to gain competitive feedstock advantages and market growth. GC elevates its sustainability operation for business connectivity in response to industrial trends as well as strikes a sustainability balance in three aspects: economic, social, and environment, to become a model of sustainability operation at the international level and reduce the greenhouse gas emission under both scope 1 and 2 to net zero by 2050. The key activities are as follows: In order to accomplish all of three strategies aforementioned, it is necessary for GC to transform its operation method so that it becomes efficient and ready to tackle business changes which are subject to fluctuation, and to be in line with the growth direction. GC has set out direction for organization transformation involving suitable process and working method which are highly flexible and and adjustable under the “FiT Project” by improving the end-to-end working process and introducing the use of digital platform in the working process to reduce costs, improve operational efficiency, enhance system effectiveness, boost agility, and decrease risks as well as carrying on people upskill and reskill so that existing staff become knowledgeable and holding skills which are in line with directions of the Company. Knowledgeable, and create a corporate culture that improves preparedness for change, as well as strengthen supporting units and lays down the foundation for effective Governance, Risk management and internal control, and Compliance (GRC), to ensure compliance with laws, rules, and regulations and assure transparency and accountability to its stakeholders. STEP OUT 2 STEP UP 3 TRANSFORMATION 4 Engaging in decarbonization via compensation to promote the work towards net zero carbon emission goal. The remaining carbon emission will compensated by the use of Carbon Capture for Utilization and Storage (CCUS) technology wh i ch i s h igh l y efficient and has competitive cost, and the use of nature-based solutions, e.g., forestation, forest restoration, efficient carbon credit management, etc. Ma i n t a i n i ng l eade r s h i p i n sustainabi l ity by focusing on adopting international-standard sustainability-led practices in the main aspects of operation (i.e., Environmental, Social and Governance aspects (ESG) ) , sustainably creating value to the society, as well as extending sustainability-led practices to the Group in accordance with the decarbonization roadmap in order to achieve the net zero emission goal in 2050 and becoming a model in the petrochemical and other relevant industries. 5 BUSINESS OPERATION AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL REPORTS AND FINANCIAL STATEMENTS APPENDIX CORPORATE STRATEGIES
PTT Global Chemical Public Company Limited (GC) was founded through the amalgamation of PTT Chemical Public Company Limited (PTTCH) and PTT Aromatics and Refining Public Company Limited (PTTAR). It was registered on October 19, 2011 to be PTT Group’s Chemical Flagship. At present BACKGROUND AND SIGNIFICANT DEVELOPMENT GC, registered and paid-up capital is Baht 45,088,491,170 The number is common shares is 4,508,849,117 shares the par value is Baht 10 per share 6 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2021
Due on March 18, 2031, bear the fixed interest rate at 2.98 percent per annum, payable every 6 months throughout the tenor of 10 years with principal amount of USD 700 million. Due on March 18, 2051, bear the fixed interest rate at 4.30 percent per annum, payable every 6 months throughout the tenor of 30 years with principal amount of USD 550 million. SERIES 2: 30 Years DEBENTURE ISSUANCE AND OFFERING In 2021, GC Treasury Center Co.,Ltd., a 100% subsidiary of the company, issued and offered unsubordinated and unsecured USD debentures. The details are as follows: BUSINESS OPERATION AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL REPORTS AND FINANCIAL STATEMENTS APPENDIX BACKGROUND AND SIGNIFICANT DEVELOPMENT SERIES 1: 10 Years 7
SALES REVENUE EBITDA & ADJUSTED EBITDA* Unit: Baht Million NET PROFIT 2020 2020 2020 2021 2021 465,128 2021 326,270 465,128 20,291 0.04 61,141 28,579 55,186 44,982 SALES REVENUE OF MAIN PRODUCTS Breakdown by Geography Year 2021 SALES REVENUE Breakdown by Business Year 2021: Baht 465,128 Million ADJUSTED EBITDA* Breakdown by Business Year 2021: Baht 55,186 Million EBITDA Earning per Share (Baht per Share) Adjusted EBITDA* Net Profit (Baht Million) Note: * Adjusted EBITDA refers to EBITDA excluding Stock gain/(loss), NRV and Extra item FINANCIAL HIGHLIGHTS Unit: Baht Million 10.01 Other China AEC Thailand Asia (Excluding AEC China & Thailand) 2% 16% 11% 63% 8% 200 Olefins and Derivatives Green Chemicals Other 3% -2% 49% Refinery & Shared Facilities 3% Aromatics 13% Performance Materials and Chemicals 34% Olefins and Derivatives Green Chemicals Aromatics Performance Materials and Chemicals 34% 4% 9% 15% Refinery & Shared Facilities 38% Notes: - Represent the sales revenue based on the geographical location of customers - More than 90%of consolidated sales revenue is generated fromcompanies in Thailand 8 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2021
BUSINESS OPERATION AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL REPORTS AND FINANCIAL STATEMENTS APPENDIX FINANCIAL HIGHLIGHTS STATEMENT OF FINANCIAL POSITION (Baht Million) 2019 2020 2021 Total Assets 452,514 489,383 753,862 Cash and Cash Equivalents + Current investments in financial Assets 25,560 60,658 74,994 Other Current Assets 78,934 69,253 133,360 Property, Plant and Equipment 264,564 269,177 289,579 Non-Current Assets 83,457 90,295 255,929 Total Liabilities 158,919 200,389 426,259 Interest Bearing Debt (IBD) 107,087 155,083 275,375 Other Liabilities 51,832 45,306 150,884 Total Equity 293,595 288,994 327,603 STATEMENT OF FINANCIAL POSITION 2019 2020 2021 Current Ratio (times) 1.97 2.20 1.41 EBITDA to Tatal Revenues (%) 6.79 6.22 13.14 Net Profit on Total Revenues (%) 2.85 0.06 9.67 Return on Total Assets (%) 3.50 0.86 9.44 Return on Equity (%) 4.02 0.07 15.01 Interest Bearing Debt to Equity (times) 0.36 0.54 0.84 Net Interest Bearing Debt to Equity (times) 0.28 0.33 0.61 Net Interest Bearing Debt to EBITDA (times) 2.93 4.65 3.28 DIVIDEND PAID (Baht/Share) 2019 2020 2021(1) 1st Half 1.00 0.00 2.00 2nd Half 1.00 1.00 1.75 Full Year 2.00 1.00 3.75 Earning per Share (Baht/Share) 2.59 0.04 10.01 Dividend Payout Ratio (%) 77% >200% 37% Remark: (1) The Board of Directors’ Meeting No. 2/2022 held on February 14, 2022, agreed to propose the Annual General Meeting of Shareholders to consider and approve on the dividend payment for the year 2021 operating performance of Baht 3.75 per share, or dividend payout ratio at 37% of the net profit of consolidated financial statements, of which Baht 2.00 per share was paid as interim dividend on September 22, 2021. The remaining dividend of Baht 1.75 per share is to be proposed to the 2022 Annual General Meeting of Shareholders for approval. 9
AWARDS AND RECOGNITIONS 10 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2021 Our outstanding performance in the economic, social and environmental dimensions in 2021 has been recognized by leading organizations in both national and international levels. Dow Jones Sustainability Indices (DJSI) GC has been ranked as the first in the 2021 Dow Jones Sustainability Indices (DJSI) in the chemicals sector for three consecutive years and also ranked among the top 10 companies in the DJSI World and Emerging Markets Index for the ninth consecutive year. UN Global Compact LEAD GC is 1 of 38 organizations across the world that has been recognized as Global Compact as Lead level since 2016 dr i ven by commi tment on con t i nuou s i mp r o v emen t t ha t expanding throughout supply chain to supporting to achieve SDGs. Carbon Disclosure Project (CDP) GC has been rated at Leadership Level in Water Security (A Level) and env i r onmen t a l managemen t i n Climate Change (A- Level) by the CDP that is the highest rating in chemicals sector in Thailand. INTERNATIONAL LEVEL Ecovadis Supplier Sustainability Ratings GC has been evaluated in ESG in gold medal by EcoVadis, that the score is 70 with percentile at 97, has been ranked Top 3% in the Commodity Chemicals sector. MSCI ESG Rating GC has been listed in Top 10th of rating the Commodity Chemicals sector by MSCI. The assessment represents how GC gains investor conf idence by running its operations in accordance with the Environmental, Social and Governance (ESG) principles. International Sustainability & Carbon Certificate GC subsidiaries (2 plants) i.e., olefins cracker plant and polyethylene plant, have been certified in sustainability and carbon reduction (ISCC PLUS) by International Sustainability & Carbon Certificate. This proves that GC have commitment and plan to transform the corporate to support bio-economy and circular economy. The Asset Awards GC received Platinum Award for ESG from the Asset Awards 2021, which organized by The Asset magazine, a regional leading financial magazine in Asia.
BUSINESS OPERATION AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL REPORTS AND FINANCIAL STATEMENTS APPENDIX AWARDS AND RECOGNITIONS 11 Thailand Sustainability Investment (THSI) GC has been honored on the l ist of Thailand Sustainability Investment for the seventh consecut ive year (2015-2021). This represents GC’s efforts in creating a benefit on both internal and external stakeholders, in the aspect of Environmental, Social and Governance that is in line with the THSI assessment and international standards. Low Carbon and Sustainable Business Index (LCSi) GC has been recognized as a leading company in the Low Carbon and Sustainable Business Index (LCSi) with an Ou t s t and i ng sco r e f o r t h r ee consecutive years. This demonstrates GC’s commitment to lower greenhouse gas emissions with an aim to reduce environmental impact. SET Sustainability Awards of Honor GC has received SET Sustainability Award of Honor for four consecutive years. This reflected on the corporate operation that remarkably aligned with sustainable development, as well as comprehensive and t ransparent disclosure on the operation. CSR-DIW Continuous Award GC’s subsidiaries (18 plants) received the CSR-DIW Continuous Award for the 14th consecutive year. Thailand Corporate Excellence GC received a Distinguished award in Innovation Excellence category from the Thailand Management Association (TMA) . This award ref lects GC’s commitment to operating its business w i t h a f ocus on r esea r ch and development, including innovation to push the organization to sustainably grow wi t h en f orcemen t on t he competitive capabilities. The Prime Minister’s Industry Award GC’s subsidiaries received The Prime Minister’s Industry Award fromMinistry of Industry for four awards i.e., Quality Management, Ci rcular Economy, Productivity, and Social Responsibility. This award pushes Thai industries to be performance excellence and being great role model for other corporates. Thai Chamber of Commerce (TCC) Outstanding Ethics Award GC received the Business Ethics for Sustainable Development from Thai Chamber of Commerce (TCC). This demonst rates that GC conducts business under the good corporate governance and integrity, fairness for stakeholders, and awareness of resource efficiency. The award truly represents a sustainable achievement for the organization. Sustainability Disclosure Award GC received Sustainability Award from Thaipat Institute that reflects on being a great representative that excellent d i s c l o s u r e o n i n f o rma t i o n o f sustainability. NATIONAL LEVEL NACC Integrity Awards GC was awarded a consolation prize for the 10th NACC Integrity Awards by Office of the National Anti-Corruption Commission (NACC) being recognized for i ts business operat ions wi th transparency, anti-corruption, and corporate social responsibility under good corporate governance principles as well as for its emphasis on human r ights and compl i ance wi th the international ethics standard.
SUPPORTING THAI SOCIETY DURING THE COVID-19 PANDEMIC AND OTHER CRISES MAJOR EVENTS AND ACTIVITIES IN 2021 GC initiated the “How to Yeak...How to Manage InfectiousWaste” Project in collaboration with Royal Thai Government and private partners to support the correct sorting and disposal of infectious waste during the COVID-19 pandemic. GC has provided 120-litre contactless red bins with foot pedals for infectious waste and red disposal bags made from InnoPlus plastic resin that are durable, humidity-resistant and carbon-footprint certified to various locations. GC and its partners also communicated with foreign workers from Myanmar using the Burmese language, as they are a primary at-risk group. The initiative was carried out in areas of high community spread, such as Samut Sakhon, Chonburi, and Rayong. GC partnered with Royal Thai Government and private agencies to provide medical supplies under the “Greater Care by GC” brand to medical personnel. The supplies included PE gowns made from PE resin which were made from InnoPlus plastic resin; coveralls made of 100% recycled PET (rPET), which are the Level 2 PPE that can be reused 20 times; leg covers made from rPET; and GelCo hand sanitizer. The supplies were distributed to various hospitals and other locations around the country. Through projects initiated by GC and its partners and other agencies such as “Millions Support Ensuring a Safe Space for All” Project, 4 million PE gowns were given to hospitals and public heal th agencies around the country. GC also collaborated with “Less Plastic Thailand” and partners to launch the “Sorting Bottles for Doctors” Project which provided PPE to the Mahidol University Faculty of Dentistry Foundation and the Chulabhorn International College of Medicine at Thammasat University for further donation to other areas in need. In 2021, to support Thailand’s resilience in the face of crises, (especially regarding the COVID-19 pandemic), GC Group promoted products related to COVID-19 prevention and offered assistance to medical personnel, frontline staff, and those suffering from the crisis throughout the country with the following contributions. JANUARY FEBRUARY AND MAY 2021 2021 12 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2021
On March 4, 2021, having recognized drought as a recurring issue, which grows increasingly serious every year, GC, PTT, the Provincial Waterworks Authority Department of Water Resources, and the Provincial Electrici ty Authori ty launched the “2021 Stopping Drought Crisis” Project at the Royal Thai Army Headquarters to mitigate the effects of drought on farmers and other groups in remote rural areas. On June 9, 2021, with Rayong as its second home, the “Greater Care by GC” brand provided coveralls and PE gowns made of plastic resin for medical personnel doing fieldwork and helping Samet Island, Rayong to become the first area in Thailand to have a 100% COVID-19 vaccination rate and the first place to use the “Tambon Health Promoting Hospital” as a vaccination location. The effort is the result of col laboration between Rayong Hospital and other organizations. GC also provided hand sanitizer, upcycled shirts for Ban Pae volunteers and Samet Island volunteers. On September 1, 2021, amid growing COVID-19 case counts, GC, GC Marketing Solutions Co., Ltd. and 84 plast ic manufactur ing partners launched the “GreaterCare Charity by GC & Customers” Project to support medical personnel in taking care of COVID-19 patients. In its primary phase, the project p r ov i ded i n t eg r a t ed p l as t i c innovations and products to field hospitals and community isolation centers in Samut Sakhon, Samut Prakan, and Rayong. In the second phase, the project granted money to the Thai Red Cross Society for the development of 200 Chula High Flow Nasal Cannula (Chula HFNC) devices to be distributed to hospitals around the country. The Chula HFNC was developed and manufactured jointly by the Thai Red Cross Society, the Chulalongkorn University Faculty of Medicine, and the alumni of the Chulalongkorn University Faculty of Engineering. It is a high-quality medical innovation developed by Thai people that is 3-4 times less expensive than imported devices and can be quickly distributed to hospitals in need in response to the COVID-19 crisis. With severe flooding in several areas in Thailand affecting people in many communities, GC organized the “GCCares for Flooding” Project to help mitigate the impact of flooding – in which GC distributed plastic rowboats that were provided to various state agencies to help people in many provinces. The plastic rowboats were made of LLDPE compound plastic resin and manufactured through a rotational molding process to ensure the rowboats are durable, strong, flexible, impact-resistant, and scratch-resistant. The rowboats are also UV-resistant and suitable for extended outdoor use. The rowboats are 90 cm wide, 3 meters long and weigh 35 kg, while accommodating 2-3 people (net weight of 200 kg). As they are made from 100% plastic, they can be recycled if damaged or not used. MARCH 4, 202 JUNE 9, 2021 SEPTEMBER 1, 2021 OCTOBER AND NOVEMBER 2021 13 BUSINESS OPERATION AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL REPORTS AND FINANCIAL STATEMENTS APPENDIX MAJOR EVENTS AND ACTIVITIES IN 2021
JANUARY 28, 2021 FEBRUARY 10, 2021 SUPPORTING STRATEGIES TO ENHANCE COMPETITIVENESS GC AND PTT SIGNED A COLLABORATION AGREEMENT UNDER PROJECT ONE GC signed on as a PTT PLC Project ONE collaborator at PTT headquarters, continuing their collaboration on value creation driven by supply & trading optimization that will lead to sustainable growth to the PTT Group, while ensuring power stability and enhanced competitiveness in the country. GC SIGNED AGREEMENT WITH SAMSUNG ENGINEERING TO IMPROVE THE OLEFINS 2 FACTORY, ENSURING FLEXIBILITY IN USING THE MATERIAL, WHILE BUILDING ON THEIR DOWNSTREAM PETROCHEMICAL BUSINESS GC held a signing ceremony for the Olefins 2 Modification Project (OMP) between GC, Samsung Engineering (South Korea) Ltd., and Samsung Engineering (Thailand) Co., Ltd. The project is a part of the Step Change strategy to ensure flexibility in using propane as feedstock, adding value to the downstream business, while enhancing competitiveness. GC signed an engineering design agreement to procure machinery and construction equipment. Commercial manufacturing is expected to begin in the first quarter of 2023 with investment value of 165 million US dollars or Baht 5.198 billion. 14 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2021
JUNE 8, 2021 MARCH 19, 2021 GC HELD THE “INTELLIGENT PIPELINES INFRASTRUCTURE – WATER PIPING SYSTEM & DESIGN SOLUTION” SEMINAR TO ENHANCE THE PIPE MANUFACTURING INDUSTRY IN THAILAND GC held the “Intelligent Pipelines Infrastructure –Water Piping System & Design Solution” seminar to enhance the pipe manufacturing industry and polymer products business in Thailand at The Energy Complex Building in Bangkok. This effort highlighted GC’s commitment to develop polymer products in response to the piping needs of its customers and partners through collaboration among its partners in every sector. This should help enable Thai piping products to compete at the international level and to be part of the “thinking buddy” in improving the Thai pipe manufacturing industry. GC REDUCED ITS STAKE IN GLOBAL POWER SYNERGY PCL GC informed The Stock Exchange of Thailand of its sale of Global Power Synergy PCL (GPSC) common stock. GC sold 305,000,000 shares, representing 10.82% of GPSC’s available shares, to PTT PCL. Also 53,936,756 shares were sold to Siam Management Holding Co., Ltd. (1.91% of GPSC’s available shares). MARCH 25, 2021 GC ANNOUNCED THE DELISTING OF VINYTHAI PLC FROM LISTED SECURITIES AND A TENDER OFFER TO STRENGTHEN DOWNSTREAM CHEMICAL PRODUCTS AND DRIVE EXPANSION INTO CLMV MARKETS GC informed The Stock Exchange of Thailand of its Board resolution to delist VinyThai PLC (VNT) from listed securities and tender offer for VNT securities. AGC Inc. (AGC) as a major stockholder of VNT does not intend to sell its shares of VNT common stock. After VNT securities are delisted, GC and AGC have plan to merge VNT and AGC Chemicals Co. , Ltd. (AGC-TH) (a subsidiary with all shares held by AGC). Before the merger, AGC-TH will reorganize by merging PVC under AGC in Vietnam into AGC-TH. Post-merger, GC may consider buying rights offerings in the new company with volumes and prices to be considered later. This investment will drive the capacity, strength, and development of the downstream businesses of GC, which are PVC and Chlor-Alkali both of which continue to experience rising demand in line with the economic growth. Moreover, this gives an opportunity for GC to expand into CLMV countries. In total, 358,936,756 shares (~12.73% of GPSC’s available shares) were sold. The GPSC’s common stock was sold to the contractual party on June 8, 2021. GC reduced its ownership of GPSC from 22.73% to 10% through these transactions. The sale is accordance with GC’s strategy to divest from non-core business while focusing on increasing its performance chemicals business lines. 15 BUSINESS OPERATION AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL REPORTS AND FINANCIAL STATEMENTS APPENDIX MAJOR EVENTS AND ACTIVITIES IN 2021
JULY 13, 2021 FEBRUARY 4, 2021 DRIVING STRATEGY TO SEEK NEW OPPORTUNITIES TO GROW NEW BUSINESSES OR BUSINESSES OVERSEAS SUPPORTING STRATEGIES TO FOSTER BUSINESS SUSTAINABILITY AND ADOPT CIRCULAR ECONOMY PRACTICES PTTGC INTERNATIONAL (NETHERLANDS) B.V., A SUBSIDIARY OF GC ACQUIRED allnex, A GLOBAL LEADER IN THE RESIN COATINGS BUSINESS PTTGC International (Netherlands) B.V. or GC BV, a wholly owned subsidiary of PTT Global Chemical Public Company Limited (GC), has signed an agreement with allnex Holdings S.a` .r.l and allnex S.a` .r.l, funds advised by Advent International (Advent), to acquire industrial coating resins producer allnex Holding GmbH (allnex). Being a global leader in the resin coatings, allnex manufactures and sells industrial coatings and additives used with a variety of materials such as wood, metal, and plastic. allnex is also a leader in offering solutions of in the application and development of industrial coatings for metals, automobiles, and packages. This investment was a big step forward for GC in increasing its portfolio of chemical products, which strengthens itself as a leader in chemical products and integrates environmentally friendly innovations with state-of-the-art technology. GC will be a long-term strategic partner, helping allnex improve access to the Asia Pacific market and to expand into emerging markets through future investments. GC PRESENTED UPCYCLED CHAIRS TO THE FACULTY OF FISHERIES, KASETSART UNIVERSITY FOR USE IN A CO-WORKING SPACE AND VISITED THE MARINE SCIENCE DEPARTMENT’S MARINE DEBRIS REDUCTION UNIT GC presented upcycled chairs to the Faculty of Fisheries, Kasetsart University to use in a co-working space for students to use, to learn, exchange knowledge, be creative, or read. GC also presented red trash bags for infectious waste and contactless red bins with foot pedals as part of its “How to Yeak...How to Manage Infectious Waste” Project to encourage waste sorting and proper infectious waste disposal to prevent contamination and the spread of disease at Faculty of Fisheries, Kasetsart University. The upcycled chairs were made of materials composed of 30-40% plastic. The seat cushion was made from waste plastic resins from the Waste Side Story exhibition that GC organized at Bangkok Design Week 2018. The chair structures were made with a wood-plastic composite made by mixing polyethylene (PE) from plastic bag handles with natural waste materials such as sawdust. It is formed to be strong and more durable than real wood. 16 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2021
MARCH 5, 2021 JUNE 15, 2021 GC BUILT AN INTEGRATED PLASTIC WASTE MANAGEMENT PLATFORM BY PROCESSING CONTAMINATED PLASTIC WASTE, THROUGH A PARTNERSHIP WITH THE SURANAREE UNIVERSITY OF TECHNOLOGY GC and the Suranaree University of Technology signed a collaboration agreement regarding the “Study on Plastic Waste Management and Contaminated PlasticWaste ValueAdding” which is a pilot research and development project at the commercial plant level aimed at studying an end-to-end integrated process for managing plastic waste, and adding value to the contaminated plastic waste by using a chemical recycling process to allow the material to be reused as fuel or raw material for chemical products. GC also created an end-to-end management plan to strive for sustainable development and compliance with circular economy principles at the Energy Complex Building in Bangkok. GC JOINED “ALL THAILAND FOR SUSTAINABLE PLASTIC MANAGEMENT” On June 15, 2021, as one of the founders of the “Collaboration on Sustainable Plastic and Waste Management” Project (PPP Plastics), which aims at reducing plastic waste based on a sustainable waste management according to the circular economy and 3Rs principles, GC partnered with The Federation of Thai Industries (FTI), the private sector, and the Alliance to End Plastic Waste (AEPW) to launch the “ALL Thailand for Sustainable Plastic Management” Project. GC, PPP Plastics, FTI, and AEPW will jointly research systematic and sustainable plastic waste management processes which correspond with the Bio-Circular-Green Economy (BCG) guidelines. The project encompasses 1. Eco Digiclean Klongtoei Project which apply digital technology to manage plastic waste in big cities that is currently piloting in Khlong Toei, Bangkok; 2. Rayong Less-Waste Project which expands an already working waste management system to cover 68 municipalities in Rayong; and 3. Paving Green Roads Project that studies road construction using plastic waste and asphalt to reduce resource use intensity. 17 BUSINESS OPERATION AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL REPORTS AND FINANCIAL STATEMENTS APPENDIX MAJOR EVENTS AND ACTIVITIES IN 2021
AUGUST 10, 2021 AUGUST 13, 2021 GC AND CARGILL HIGHLIGHTED THEIR GLOBAL LEADERSHIP IN SUSTAINABILITY, WHILE SUPPORTING THE BCG ECONOMY BY BUILDING A NEW FULLY-INTEGRATED BIOPLASTIC PRODUCTION FACILITY IN THAILAND GC International Corporation, a subsidiary of GC, and Cargill Incorporated (Cargill) as a 50% stockholder in NatureWorks LLC, the No.1 manufacturer of polylactic acid (PLA), announced their plans to construct a new fully-integrated bioplastic production facility in Thailand to meet increased demand for sustainable materials in the global market. The project supports the Bio-CircularGreen economy model aimed at Thai economic growth and enhanced competitiveness to propel Thailand towards achieving the sustainable development goals. This new production facility will use the world’s most advanced biopolymer technology and sugar from Thai sugarcane farmers to help expand partnerships in the bio-polymer market, including the production and development of products to meet the demand for sustainable materials. Located in the Nakhon Sawan Biocomplex (NBC) in Nakhon Sawan, the production facility is a fully-integrated polylactide and PLA facility with an annual biopolymer capacity of 75,000 tons. This is the first project in Thailand that aligns with the BCG economy model according to the Royal Thai Government policy. GC SUPPORTS A PR PROJECT ON FORESTATION UNDER THE “BREATH” CONCEPT On August 13, 2021, the Ministry of Natural Resources and Environment and Royal Forest Department organized a PR project on forestat ion under the “Breath” concept to promote the conservation and rehabilitation of forests and the sustainable utilization of forestlands. The public sector, private sector and civil society support increasing green areas with net zero goals in Thailand. Having awareness of the importance of this project, GC encouraged the public to understand and be aware of the significance of forest resources and participation in adding more green areas. 18 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2021
SEPTEMBER 21, 2021 SEPTEMBER 30, 2021 GC LAUNCHED “YOUTURN” TO HIGHLIGHT WAYS TO MANAGE USED PLASTIC On September 21, 2021, in recognition of the need to start tackling the plastic waste issue, GC launched “YOUTURN”, a plastic waste management platform, under the “YOUTURN – starts from you” concept where everyone can add value to plastic waste in an integrated way. People can drop their used plastic products, whether they are rigid such as water bottles, shampoo bottles, milk bottles, food containers or they are flexible such as plastic bags, or plastic wrap, at the YOUTURN Drop Point, located in many areas of Bangkok and in Rayong. The collected plastics will be forwarded to ENVICCO, a global standard plastic recycling factory owned by GC, or partner factories that meet appropriate standards of management, to be upcycled in accordance with the circular economy, instead of being sent to the landfill. GC JOINED THAIBEV AND THAI UNION AS FOUNDERS OF THAILAND SUSTAINABILITY EXPO TO HOLD “THAILAND SUSTAINABILITY EXPO 2021” TO HIGHLIGHT ITS SUCCESS IN SUSTAINABILITY FOR THE SECOND YEAR GC, Thai Beverage PLC (ThaiBev) and Thai Union Group PLC (Thai Union) organized a virtual “Thailand Sustainability Expo 2021” under the sufficiency for sustainability concept from September 30, 2021, to October 10, 2021, to raise awareness of sustainable development and to create the opportunity to network regarding the application of theory on industrial practices. 19 BUSINESS OPERATION AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL REPORTS AND FINANCIAL STATEMENTS APPENDIX MAJOR EVENTS AND ACTIVITIES IN 2021
OCTOBER 21, 2021 NOVEMBER 8, 2021 GC GROUP TARGETED “TOGETHER TONET ZERO” GOALS, DRIVING BUSINESS FOR STRONG AND SUSTAINABLE GROWTH WHILE SERVICING CUSTOMERS GC announced its goal of “Together To Net Zero” which aligns GC with the Paris Agreement. GC aims to reduce Greenhouse Gas (GHG) emission by 20% by 2030 on the journey to achieving net zero by 2050. The 3 pillars are 1. Efficiency-driven: lowering GHG by 20% by ensuring the least GHG emission through modifying current and future manufacturing process and applying new technologies; 2. Portfolio-driven: reducing GHG by 25% by restructuring future business lines to focus on environmentally friendly low-carbon businesses, such as performance chemicals, biochemicals, green and recycling businesses; and 3. Compensation-driven: reducing GHG by 55% by using various methods and streamlined technologies to compensate for the remaining carbon. The effort is an important milestone for GC in highlighting its “Chemistry for Better Living” concept. GC strives to drive the business in a long-term oriented way by prioritizing the balance between the environment, society, and corporate governance as well as integrating circular economy principles that align with sustainable development goals. Its net zero goal reflects its aim to become a global leader in the chemical industry in the future. Believing that the net zero goal requires effort from all sectors, GC is ready to collaborate with global partners to reduce GHG emission, helping the world to reach the net zero goal together. GC EXPRESSED ITS NET ZERO VISION IN THE “THAILAND MINISTER’S CLIMATE TALK AND BUSINESS LEADERS TO SHARE VISION AND EXPERIENCES ON NET-ZERO TRANSFORMATION” ON COP26 On November 8, 2021, representatives from Thailand and the Thailand Carbon Neutral Network (TCNN) organized an online event alongside the UN Climate Change Conference (COP26) at the Thai Pavilion in Glasgow, Scotland. GC shared its vision in the “Thailand Minister’s Climate Talk and Business Leaders to Share Vision and Experiences onNet-Zero Transformation” to showcase its commitment in collaborating with the public and private sectors to reach net zero. GC highlighted its use of circular economy principles to run its business and its goal to produce chemical products that are environmentally friendly to improve people’s lives. With its decarbonization goal to achieve net zero goal in 2030 which aligns with the Paris Agreement, GC stives to reduce GHG emission by 20% by 2030 on the way to achieving net zero by 2050. GC intends to meet the challenge through the 3 pillars which are Efficiency-driven, Portfolio-driven and Compensation-driven. The COP26 was held from October 31, 2021, to November 12, 2021, and attended by leaders from 196 countries to discuss guidelines and agreements to prevent a 1.5 degree Celsius rise in global temperature and to prevent global impacts of natural disaster. Being one of ten countries affected by climate change, Thailand is determined to urgently develop and elevate climate change solutions to achieve carbon neutrality by 2050 and zero emissions by 2065. 20 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2021