PETROCHEMICAL EARNINGS UP SHARPLY IN SINGAPORE

PETROCHEMICAL EARNINGS UP SHARPLY IN SINGAPORE

Companies in Singapore's petrochemicals complex reported higher earnings for 1994 after several years of poor results as demand improved for petrochemicals used for packaging, plastics and fiber.

Petrochemical Corp. of Singapore Pte. Ltd. and its subsidiary Tetra Chemical of Singapore posted net earnings of 68.5 million Singapore dollars (US$49 million) for the year through last Dec. 31. That represents a 372 percent gain from the S$14.5 million of 1993, a company spokesman said.Revenue was S$514.8 million, up from S$485.5 million previously.

Polyolefin Co. (Singapore) Pte. Ltd., a downstream firm that makes polypropylene and low-density polyethylene, reported earnings of S$55 million in 1994 against a loss of S$5 million in 1993. Revenue improved to S$425 million from S$381 million.

A spokesman attributed the improved earnings to better prices driven by Chinese demand.

Ethylene Gylcols (Singapore) Pte. Ltd. reported a decline in the group's net loss to S$2 million last year from S$12 million in 1993 on higher revenue.

Phillips Petroleum Singapore Chemicals, another downstream plant, could not be reached for comment.

Despite the better performance in 1994, most petrochemical companies remain only cautiously hopeful that the industry has emerged from the slump of the early 1990s.

"The better earnings seen last year was in line with the upturn in the industry cycle," said an official at Singapore's Economic Development Board. ''But it's hard to say if 1994 was the turning point for the industry."

While the short-term outlook appears to hinge on the return of Chinese demand, some traders fear the balance of supply and demand over the longer run may be threatened by new capacity in traditional markets like Thailand, Malaysia, the Philippines and Vietnam.

The petrochemical complex here is owned by the Shell Overseas Investments BV unit of Royal Dutch/Shell, Oklahoma-based Phillips Petroleum International Corp. and various Japanese groups headed by Sumitomo Corp. and Mitsubishi Petrochemical Co.