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Ahead of the upcoming Asia Pacific Coatings Show in Bangkok this September, PPCJ spoke to Harakhun Tanatavikorn, Business Development Manager at Thailand’s Union Petrochemical, a chemicals distributor, about the opportunities and challenges of doing business in the south east Asian powerhouse economy
Q. Can you give us a brief history of Union Petrochem, including when and where the company was established and what your business was initially?
A. First, our business started out in the agricultural sector where we explored setting up a business to serve the agriculture sector in Thailand. Then we slowly got into the agricultural chemicals business by supplying fertilisers, chemicals and raw materials to various customers in Thailand. As business continued and we expanded our business network, we had the opportunity to receive training from European partners who are in the Agrochemical, Paints, and Coatings Industry. At that time, we handled various chemicals and “Solvent” was a significant portion of business and had good growth potential. This strengthening relationship with suppliers and increased accumulation of knowledge over the years allowed us to transform ourselves from a “Trader” into a “Distributor” with a growing portfolio.
"It’s part of our core business practice to ensure compliance to regulations and legislation of the chemical industry. We try to look at it in positive manner as it also acts as an entry barrier that hinders new competitors."Harakhun Tanatavikorn, Business Development Manager at Thailand's Union Petrochemical
Q. Moving forwards to today, how has Union Petrochemical expanded and what products do you distribute?
A. Union Petrochemical Public Company Limited has grown to be a leading importer and distributor of chemicals with special expertise in chemicals. The company distributes chemical solvents, which are a component used in the production of products in various industries such as paints, coatings, adhesives and printing. Solvents are also widely used in industrial cleaning and degreasing.
Most of the products that we distribute to the paint industry belong to various groups of chemicals. Most of them are Solvents. We supply a wide range of Hydrocarbons, Ketones, Esters and Glycol Ethers.
Distribution to the paint and coatings industry is quite a large share of our business.
Q. Which countries do you predominantly export your products to?
A. The countries we predominantly export to are our neighbouring countries: Cambodia, Myanmar, Laos, Vietnam (CMLV).
Q. What services does Union Petrochem provide to its customers?
A. As a distributor we provide a wide range of solutions. Of course, we specialise in the development of customised solutions that meet our customer’s needs. This involves solutions that are addressed to technical, logistical or financial challenges that our customer face in their operations. For more than 42 years, we’ve provided our customers with highly competitive, consistent and flexible solutions that have helped us grow together.
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Q. Why is Thailand an important market for your company?
A. Thailand remains a south east Asian powerhouse economy with a mature market that is projected to grow around 3.9% in 2023. The country has a well-established manufacturing industry for various key industries, such as Automotive, Paints, Coatings, Adhesive, Inks and Packaging. It has also been able to capture export markets to various regions and has proven itself as a reliable business and manufacturing hub in the region. Therefore, we continue to focus our business efforts and expansion plans towards our development in Thailand.
Q. What are the perks of being a distribution company based in Thailand? Are there any difficulties?
A. I’ll sum up the key perks as:
- A well-developed logistics infrastructure that enables efficient import and export activities.
- Presence of excellent financial institute that are very supportive of our business.
- Thai Culture and Workforce provides stable and skilled labour for business operation.
As for the difficulties, the challenge is that the Thai Market is a highly competitive. This comes with it’s typical set of issues of competing in a mature competitive market. Another notable challenge, in my opinion, is the regulations covering hydrocarbon fluids. These regulations are intended to ensure traceability of Solvents and separate them from Fuels, which is under the management of Thailand’s “Oil Fund” Office. The regulations are quite detailed and require a high level of compliance to be able to handle hydrocarbons-based solvents.
Q. Regulations and legislation is often cited as a challenge when working in the chemical industry. How does Union Petrochem cope with this aspect of distribution?
A. It’s part of our core business practice to ensure compliance to regulations and legislation of the chemical industry. We try to look at it in positive manner as it also acts as an entry barrier that hinders new competitors. As the chemical industry in Thailand develops, it becomes necessary for us to continuously adapt to increasingly strict regulations, which allows our customers to be confident in our distribution solutions.
Q. How important is sustainability as a ‘trend’ to Union Petrochem and how does it affect your business? What sustainability goals and practices do you have in place?
A. Customers have been asking us more about what we can do together to achieve sustainability together. As for us, our goals can be summed up as business flexibility, conscious value consumption and intelligent stakeholder management. Some examples of practices that we have in place are reusable packaging (Drums & IBCs) and providing Volatile Organic Compounds (VOCs) information to our clients. Sustainability is one of our current areas of focus and we continue to develop and provides solutions that address this challenge.
Q. How was your business affected by the COVID-19 pandemic and has it recovered?
A. COVID-19 has drastically changed the behaviour and expectations of our customers. In general, they’ve become more conservative and only procuring materials “as needed”. This is in response to the volatile fluctuations and uncertainties in the availability and prices of raw materials, which include Chemicals and Solvents.
During COVID-19, we faced the challenge of securing material due to global and regional supply chain disruptions. Therefore, the players in the supply chain were willing to pay a premium to secure material. On the other hand, currently, we are facing a different situation where supply-demand is still fluctuating and balancing out in a post-COVID-19 era. In my opinion, we are still in the process of recovery, and we’ll have to monitor the global and domestic macro-conditions in the upcoming months to have clearer picture.
The Asia Pacific Coatings Show and Conference will take place on September 6-8, 2023, in Bangkok. More information on how to attend can be found here: www.asiapacificcoatingsshow.com