Thai SCG to halt Vietnam petrochemical plant in mid-May over Middle East conflict

Thai conglomerate Siam Cement Group (SCG) will suspend the operations of its Long Son Petrochemicals Complex in southern Vietnam, starting mid-May, as the Middle East conflict weighs on supply chain.

In a filing with the Thailand Stock Exchange on Wednesday, Thammasak Sethaudom, president and CEO of SCG, said that the Middle East situation remains protracted and highly uncertain, with no clear sign of a near-term resolution.

Despite its efforts, the prolonged conflict has continued to cause constraints in feedstock procurement in terms of both cost and continuity of supply, the CEO said.

As a result, after careful consideration, Siam Cement Public Company Limited (SCC), a subsidiary of SCG, has concluded that it is necessary to temporarily suspend operations at Long Son Petrochemicals Co., Ltd. (LSP) in Ho Chi Minh City, an SCC subsidiary under its Chemicals Business, from around mid-May 2026.

The temporary suspension of LSP is estimated to incur a fixed cash cost of approximately THB250 million ($7.69 million) per month, the firm noted.

During the halt, LSP will carry out maintenance activities and expedite preparations for the project to increase ethane gas feedstock at the LSP plant in Vietnam (LSPE project), in order to ensure the operational readiness of the plant and machinery and to support the plan to strengthen long-term competitiveness in line with the planned schedule.

SCC will continue to closely monitor the situation and adjust its operating plans in response to the ongoing uncertainty, while giving due consideration to customers and all relevant stakeholders, the firm added.

The Long Son complex is the country’s first fully integrated petrochemical project, with total investment of over $5 billion. It includes an olefins plant with annual capacity of 1.35 million tons, along with three polyolefin plants capable of producing 1.4 million tons per year.

The facility manufactures key plastic resins such as polyethylene (PE) and polypropylene (PP), supplying both domestic and export markets.

LSP had previously suspended operations in October 2024 due to oil price volatility and lingering impacts from the Covid-19 pandemic, before resuming production in August 2025 alongside the rollout of its upgrade plan, targeted for completion by end-2027.

Vietnam’s plastics demand reached around 11.2 million tons in 2025, according to the Vietnam Plastics Association, though the country remains heavily reliant on imported raw materials.

Consultancy B&Company estimates domestic capacity for key resins, including PVC, PP, PET, PS and PE, has expanded to nearly three million tons annually, driven by major producers such as Long Son Petrochemicals, Hyosung Vina Chemicals, and Binh Son Refining and Petrochemical.

With output of roughly 100,000 tons of PE and PP per month, equivalent to 1.2-1.4 million tons annually, LSP is one of the largest contributors to Vietnam’s domestic supply. Its temporary shutdown could therefore have a significant impact on local resin availability.

In 2025, SCG booked $1.7 billion in revenue from Vietnam in 2025, up from $1.55 billion in 2024 and accounting for over 11% of the group’s total revenue of $15.1 billion.

SCG has operated in Vietnam since 1992 and currently runs 28 subsidiaries across building materials, smart living solutions, chemicals, packaging, and logistics. In 2025, the firm contributed more than $31.5 million to Vietnam’s state budget, according to the company.