Report 2009 IRPC Public Company Limited VISION
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Soaring High Annual Report 2009 IRPC Public Company Limited VISION “Top Quartile Integrated Petrochemical Complex in Asia by 2014” Index Index Message from the Chairman 07 Message from the President 09 Phoenix Project 011 General Information 013 Board of Directors 017 Management Team 031 Milestones in 2009 047 Organization Chart 049 Management Structure 051 Shareholding Structure 063 Nature of Business 065 Business and Shareholding Structure 072 Financial Highlights 079 Risk Factors 081 Human Resources Management 083 Corporate Social Responsibilities and Environmental Care 085 Corporate Governance 093 Connected Transactions 111 Report of the Audit Committee 113 Report of Board of Directors’ Responsibility for Financial Reporting 114 Auditor’s Report 115 05 Good corporate governance is also the crest our agenda as we see that we can only arrive at sustainable development through being ethical, transparent and auditable by the general public. Message from the Chairman 06 Message from the Chairman IRPC Public Company Limited Amid waves of challenges in 2009, the continuing success of IRPC Public Company Limited is a solid proof of our strength for not only being able to withstand but also to prosper in unfavorable conditions; from fluctuating product costs to declining economic confidence. IRPC never ceases to drive towards achieving the operational excellence by revisiting our strategies and restructuring the organization to increase efficiency during times of constant transformations, as well as to flourish as a leader in an international arena. IRPC is committed to constantly developing its business by enhancing the standards of our products and production processes as to become recognized internationally. The company is extensively exploring the opportunities of expanding its investment, increasing our production capacity, improving our resources to maximize benefits and keeping our eyes open for new prospects and innovations to stabilize the company’s growth. With great focus and dedication at the heart of our operation, the management and personnel of IRPC have collaborated to the best of their capability to ensure that we will survive impeding factors and become “the Top Quartile Integrated Petrochemical Complex in Asia by 2014” per our vision statement. Operating in a highly competitive market environment, IRPC strongly believes that developing our human capital lies at the foundation of our business. People are our asset and IRPC sees the value of knowledge and skills embedded in each and everyone of our recruits. It is notable that we regard this as one of our principal goals to develop, support and coach our personnel so that they adapt to become proactive and flexible to changes and at the same time comply with our code of conduct and ethics. Good corporate governance is also the crest our agenda as we see that we can only arrive at sustainable development through being ethical, transparent and auditable by the general public. Responsibilities to our shareholders are taken to great consideration. We deploy a variety Corporate Social Responsibility programs to develop the environment, social and people lifestyle for the betterment of community in the area. IRPC is proud to be trusted by our shareholders and is more than ready to cultivate the business sustainably and confidently, committing to the maintenance of social and environmental balance for our Thai society. (Norkun Sitthiphong) Chairman IRPC Public Company Limited 07 “IRPC” will strive towards business excellence without neglecting our environment, society and community to become “the Top Quartile Integrated Petrochemical Complex in Asia by 2014.” Message from the President 08 Message from the President IRPC Public Company Limited In the wake of wavering global and local economic situations in 2009, IRPC Public Company Limited has carefully revised and devised our business operation approaches to focus on building a solid foundation from within to benefit our organization in a long run and to add value to our business. Among these developments, IRPC has seen a new vision and corporate structure to prepare our organization for taking the leadership as the fully-integrated petrochemical player. IRPC also has operated proactively to better respond to the needs of our customers, increased our competitive advantages, created more value to our business, expanded our range of products to be more advanced and varied, and invested in product innovations. To support our continued growth and expansion, a number of projects have been undertaken, for example, Refinery Performance Improvement Project, ABS Production Expansion Project, Propylene Booster Project and green product development research to reduce emission. Our projects also include the property development and deep-sea port project aiming at making the best use of our existing resources. IRPC believes that having personnel with high potential is a vital factor to our accomplishment and we are committed to develop our personnel aligning with the line of relevant international standard to better equip them for the future of IRPC. Along with our operation, IRPC considers it of great importance to grow sustainably and continuously but at the same time being responsible for the environment, society and community. IRPC has initiated a number of Corporate Social Responsibility projects to benefit the environment, education, religion, culture and public health. One of our newly initiated projects is “Community Center” in Rayong Province which aims at bettering the livelihood of the community through the use of knowledge and promotes collaboration between the business and public sector for long-term sustainability. On behalf of all management and personnel of IRPC, I would like to graciously thank all of our shareholders and supporters for the trust in and support of IRPC along the way. Rest assured that IRPC will continue to work with all our effort and strength, keeping in mind good corporate governance, for the benefit of all stakeholders. “IRPC” will strive towards business excellence without neglecting our environment, society and community to become “the Top Quartile Integrated Petrochemical Complex in Asia by 2014.” (Pailin Chuchottaworn) (Pailin Chuchottaworn) President IRPC Public Company Limited 09 Phoenix Project 010 Phoenix Project IRPC Public Company Limited Phoenix Project : The Forthcoming Step for IRPC to Become the Leading Petrochemical Complex The current economic fluctuation has simultaneously affected the global market leading to increasing aggressive competition. For IRPC to grow and develop steadily amidst the rapid economic changes and strive to become the leading petrochemical complex, the Company has initiated the Phoenix Project with the objective to increase competitiveness and monetize existing assets. The project is carried out by ascertained increasing returns on investment including defining the direction taken for the growth of the Company by increasing production in business lines that provide the highest returns. The Phoenix Project will enhance the economic value of the Company and further increase returns on investment. The Phoenix Project consisted of several sub-projects covering every business segment enhancing the Company to achieve the vision “To be Top Quartile Integrated Petrochemical Complex in Asia by 2014”. “Phoenix - a symbol of resurrection and immortality” Phoenix is a mythical bird which has its counterpart in many folklore and legend around the world. Its special attribute is immortality; the Phoenix is consumed by flames at the end of its life, only to immediately rise again from the ashes to anew its life as the dignified Phoenix. Akin to IRPC, even though the Company has been through numerous crisis but we are able to resurrect with strength to again become the dignified IRPC. Top Quartile Integrated Petrochemical Complex in Asia by 2014 2015 Onwards 2011-2014 2010 - 2011 Growth and Investing for utilization Expansion Operational and growth of existing Excellence businesses • Expand investment in fast • Develop deep sea port for growing business. • Increase production • Develop specialty grade efficiency and energy commercial use. • Increase operating returns product for added value. conservation. for raw material and finished • Achieve highest returns goods storage tanks. for production and sales. • Develop vacant land to • Increase inventory achieve highest benefit and management efficiency. utilization. 1Top Quartile in petrochemical company is determined by Return On Invested Capital (ROIC) of more than 20% per year. 011 General Information 012 IRPC Information Company Name : IRPC Public Company Limited Symbol : IRPC Company Registration : 0107537002567 Type of Business : Petroleum and Petrochemical Industry : Resources Sector : Energy & Utilities Registered Capital : Baht 20,475,000,000 including 20,475,000,000 common shares, Baht 1 per share (as of 8 January, 2010) Paid-up Capital : Baht 19,900,262,400 including 19,900,262,400 common shares, Baht 1 per share (as of 8 January, 2010) Location : Headquarters and Plant 299 Moo 5 Sukhumvit Road, Choengnoen, Rayong, Thailand Tel. (038) 611-333 Fax. (038) 612-813 Bangkok Office 123 Suntowers B, 12th Floor, Vibhavadi Rangsit Road, Chompol, Chatuchak, Bangkok 10900, Thailand Tel. (662) 649-7000 Fax. (662) 649-7001 Web Site : www.irpc.co.th References Share Registrar : Thailand Securities Depository Company Limited 62 Stock Exchange of Thailand Building Ratchadapisek Road, Klong Toey, Bangkok 10110, Thailand Tel.