Pursuing excellence through operational, commercial and innovation excellence

E XC EL LEN C E.
DYNAM I C G R OW T H
ANNUAL REPORT 2016

PETRONAS CHEMICALS GROUP BERHAD (459830-K)
THE PURSUIT OF EXCELLENCE IS A DRIVING FORCE
I T S PA R K S O U R C R E A T I V I T Y, E M B E D S O U R C O M M I T
VA L U E I N E V E R Y T H I N G W E D O. T H I S A L L O W E D U S
FOCUSING OUR ENERGIES ON STRENGTHENING
D I V E R S I F Y I N G I N T O D E R I VA T I V E S , S P E C I A L T Y C H E M
MARKET UNCERTAINTIES, WE SET NEW BENCHMARKS
9 6 % P L A N T U T I L I S A T I O N , S U R PA S S I N G W O R L D - C L A S S
A N D I N N O VA T I O N E X C E L L E N C E , L E D T O O U R H I G H E S
O N O U R U N D E R S T A N D I N G O F M A R K E T D E M A N D, W
PROJECTS THAT DRIVE OUR STRATEGIC VISION. WITH
A K E Y C A T A LY S T, T H E S E P R O J E C T S W I L L C R E A T E G R E
E M P L O Y E E S , B U S I N E S S PA R T N E R S A N D C O M M U N I T
T H E M O L E C U L A R S T R U C T U R E O F T H E C H E M I CA L S W
R E L A T I O N S H I P S W E H AV E B U I L T W I T H O U R VA R I O U S S T A
DY N A M I C G R OW T H .
EXCELLENCE. DY
AT P E T R O N A S C H E M I CA L S G R O U P B E R H A D ( P C G ) .
M E N T T O S A F E T Y, A N D F U E L S A D E S I R E T O C R E A T E
T O R I D E OV E R Y E T A N O T H E R C H A L L E N G I N G Y E A R .
OUR BASIC P E T R O C H E M I CA L S BUSINESS, WHILE
M I C A L S A N D S O L U T I O N S , W E N O T O N LY O V E R C A M E
S I N 2 0 1 6 . O P E R AT I O N A L E XC E L L E N C E R E S U LT E D I N
S S TA N DA R D S . T H I S , C O M B I N E D W I T H C O M M E R C I A L
S T E B I T DA M A R G I N S I N C E O U R L I S T I N G. L E V E R AG I N G
W E H AV E I N T H E P I P E L I N E A N U M B E R O F G R O W T H
H THE PENGERANG INTEGRATED COMPLEX (PIC) AS
E A T E R VA L U E F O R O U R C U S T O M E R S , S H A R E H O L D E R S ,
T I E S . T H E H E X AG O N S O N T H E C OV E R R E P R E S E N T
W E P R O D U C E . T H E I R L I N K AG E D E P I C T S T H E M A N Y
AKEHOLDERS WHICH CONTRIBUTE TO OUR ONGOING
NAMIC GROWTH
OPERATIONAL EXCELLENCE COMMERCIAL EXCELLENCE I N N OVA T I O N EXCELLENCE
EXCELLENCE.
Efficiency, reliability and safety are at the heart of everything we do. Sound management Customised value propositions and reliability are valuable differentiators to our success. Innovation is an integral part of the company that differentiates and allows us to adapt
and the drive for excellence continues our pursuit for greater heights across all of our Leveraging on our marketing acumen, we are able to sustain as well as expand our to changing market landscapes. We are able to connect the dots for our customers from
operating units. network and capabilities. a wide range of industries and fortify our market position.
PLANT RELIABILITY CUSTOMER FOCUS INNOVATIVE SOLUTIONS

Perform internal reliability and efficiency enhancement programmes. Develop innovative customised solutions and channel towards high value Connect with our customers specific business challenges and fortify our
applications. market position through differentiation.
Invest in technical capabilities of our people.
Offer effective technical support to serve our customers better. Pursue collaborative efforts between customers and various innovation
Maintain consistent top quartile world-class plant performance and Health, networks to deliver focused applications of products and process
Safety & Environment (HSE) performance at all our operating units. technologies.
SUSTAIN & ENHANCE MARKET POSITION
Focus on domestic and key markets in the Asia Pacific region where we have
TURNAROUND MANAGEMENT geographical advantage. INNOVATIVE CULTURE
Centralised our turnaround functions and installed tighter controls to deliver Cultivate innovation mindset to deliver breakthrough performance through
flawless plant turnarounds; executed safely, effectively and on schedule. Ensure unyielding reliability in delivery and product quality, as well as establish establishment of ideas and innovation management platform accessible
strategic collaborations with customers to develop solutions. throughout the Group.
Coordinate downtime plans of all our facilities at optimum level through
centralised management. Strengthen our regional presence with overseas marketing subsidiaries in Position innovation as a key leadership attribute.
Thailand, China and Indonesia.
SUPPLIER RELATIONSHIP MANAGEMENT CX CAPABILITIES

Collaborate across the value chain through various improvement programmes Improve our market savviness capabilities with the right systems and tools to
resulting in higher feedstock volume and better feed composition from capture better value.
upstream with higher recovery and more reliable utilities supply.
Develop internal expertise to enhance our competitive edge and resilience.
SABAH AMMONIA PENGERANG INTEGRATED 2-ETHYLHEXANOIC H I G H LY R E AC T I V E
UREA (SAMUR) INTEGRATED A R OMA AC I D ( 2 - E H AC I D ) P O LY I S O B U T E N E
COMPLEX (PIC) INGREDIENTS (HR-PIB)
C OMP L EX
DYNAMIC GROWTH
UREA
SAMUR
POLYMERS
& GLYCOLS P IC
CITRAL,
CITRONELLOL
& L-MENTHOL
I n te g ra te d Aro m a
I n g re d ie n ts C o mplex
2-EHACID
2 - E HAcid HR-PIB
H R - PI B
/LOCATION/ /LOCATION/ /LOCATION/ /LOCATION/ /LOCATION/
Sipitang, Sabah Pengerang, Johor Gebeng, Pahang Gebeng, Pahang Gebeng, Pahang
/CUMULATIVE CAPACITY/
5.1 million mtpa primarily contributed by SAMUR and PIC
/PRODUCT APPLICATION/ /PRODUCT APPLICATION/ /PRODUCT APPLICATION/ /PRODUCT APPLICATION/ /PRODUCT APPLICATION/
Granular urea fertiliser for agriculture and industrial applications Polymers - Feedstock for manufacturing plastic products, Aroma ingredients are sold to the flavour and fragrance industry, Chemical intermediate used as a compound, in the production of Intermediate product for the manufacturing of
such as adhesives and moulding powder including packaging films, wires, cables and ducting mainly in home and personal care products and in the food synthetic lubricants, as well as oil additives, functional fluids like high-performance fuel and lubricant additives
industry as well as pharmaceutical applications automotive coolants and other applications in various industries
lycols Feedstock for manufacturing polyester fibres, resins
and oil & gas chemicals
/PROGRESS STATUS/ /PROGRESS STATUS/ /PROGRESS STATUS/ /PROGRESS STATUS/ /PROGRESS STATUS/
uccessfully produced on specification urea and in the process he pro ect is progressing on schedule. Achieved the final ithin the range of start up schedule and expect Citral The plant came on-stream as planned with the successful Construction underway and expected to start production in the
of ramping up for full commercial operations in 2017 investment decision F for flexi polyethylene Flexi P plant production in 2017. The production units for Citronellol and production of on specification Acid in late fourth quarter of 2017
L-Menthol will come on-stream in phases in 2017
/POSITION/ /POSITION/ /POSITION/ /POSITION/ /POSITION/
PCG becomes second largest urea producer in Southeast Asia PCG becomes the largest glycols and polypropylene (PP) First plant in Asia Pacific to produce intermediates for flavours he first and only Acid plant in outheast Asia paving the he first and only P plant in outheast Asia allowing PC
producer as well as the second largest P producer in and fragrances, marking PCGs foray into derivatives, specialty way for PCG to diversify into specialty chemicals to further diversify into specialty chemicals
Southeast Asia chemicals and solutions
/EMPLOYMENT OPPORTUNITIES/ /EMPLOYMENT OPPORTUNITIES/ /EMPLOYMENT OPPORTUNITIES/
Some 400 high-value direct jobs are created from this investment, An approximately , , workers at peak pro ect phase ome high value direct obs are expected to be created from these three investments, in addition to providing spin off opportunities for over , local contractors
in addition to spin-off opportunities for local support and services
providers
PETRONAS
CHEMICALS
GROUP
BERHAD
OUR VISION The preferred

CHEMICAL
COMPANY
providing innovative
customer solutions
SHARED
VALUES
1 LOYALTY
3 PROFESSIONALISM
INTEGRITY
2 COHESIVENESS
4
WHATS INSIDE AR16
01
ABOUT PETRONAS CHEMICALS
GROUP BERHAD
About his eport

04
OUR
RESPONSIBILITIES
ustainability at P A Chemicals roup erhad

1
Section
one
ur eporting uite he oundaries at ur eporting
A eading Chemical Player in the egion ow ustainability is overned
hy nvest in s dentifying our ustainability Focus Areas
ur Performance ighlights eporting on ur Focus Areas
ur ilestones ur ay Forward
ur perations
05
ur each
roup tructure HOW WE ARE
Corporate nformation
GOVERNED
rganisational tructure
tatement on Corporate overnance
Product Portfolio
oard Audit Committee eport
02
omination and emuneration Committee eport
THE tatement on isk anagement and nternal Control
LEADERSHIP
25

The Value Our Board Brings
Profile of oard embers
anagement Committee
Profile of anagement Committee
06
OUR
NUMBERS
irectors eport
tatement by irectors
03
tatutory eclaration
OUR STRATEGIC tatements of Financial Position
PERFORMANCE tatements of Profit or oss and ther Comprehensive
ncome
anagement iscussion Analysis tatements of Changes in uity
anaging irector C tatements of Cash Flows
Chief Financial fficer otes to the Financial tatements
ead of anufacturing ndependent Auditors eport
ead of Commercial ist of Properties
ey lobal egatrends Analysis of hareholdings
arket utlook Corporate irectory
trategic ntent otice of Annual eneral eeting A
ow e reat isks Administrative etails of P A Chemicals
nvestor elations and hare Performance roup erhad th A
Financial Calendar Proxy Form
ur Achievements
PC in the ews
Calendar of vents
PETRONAS
CHEMICALS
GROUP
BERHAD
This section provides a comprehensive account of
who we are, how we create value for our various
s ta keholder s , and the domains w here we opera te.
It also explains what we intend to accomplish
through this annual report and provides details
of where supplementary information on the
Company can be found.
ABOUT CONTENTS
About his eport
PETRONAS
ur eporting uite
A eading Chemical Player in the egion
hy nvest in s
CHEMICALS

ur Performance ighlights
ur ilestones
ur perations
GROUP

ur each
roup tructure
Corporate nformation
BERHAD

rganisational tructure
Product Portfolio
he cross referencing icons refer readers to

information elsewhere in this report
ABOUT THIS REPORT AR16
AS THE LEADING INTEGRATED CHEMICALS PRODUCER IN MALAYSIA AND ONE 3
OF THE LARGEST IN SOUTHEAST ASIA, PCG HAS AN EXTENSIVE NUMBER OF Section

one
STAKEHOLDERS WHO ARE IMPACTED BY OUR BUSINESS, NOT ONLY BY OUR

FINANCIAL PERFORMANCE BUT ALSO THE WAY WE CONDUCT OUR BUSINESS.
WE APPRECIATE THAT THIS LARGE AND VARIED GROUP NEEDS TO UNDERSTAND
OUR COMMITMENTS AND POLICIES, OUR DIRECTIONS AND STRATEGIES, AND
OUR CURRENT AS WELL AS FUTURE PROSPECTS TO BE ABLE TO PLACE THEIR
TRUST IN US.
Although we provide various reports throughout the year see ur eporting uite
on page , our Annual eport is intended to present a clear and comprehensive FORWARD-LOOKING
summary of the way in which we have continued to create financial and non financial
STATEMENTS
value for our stakeholders over the months. his years Annual eport marks
a sharp departure from our previous reports as we have strived to create greater
transparency in the content disclosed as well as the manner in which it is presented. Certain statements in this document are
his is in line both with the latest reporting guidelines for listed companies by ursa forward looking. ypically, they contain words such
alaysia ecurities erhad ursa alaysia , as well as our own desire to produce
as anticipates, estimates, expects, pro ects,
a report that is relevant, readable and responsible.
believes, intends, plans, may, will and should,
e have introduced a new section ow e reat isks see page which or similar expressions. uch statements relate
provides an insight into our efforts to contain and manage current risks. e to the plans, ob ectives, goals, strategies, future
have also restructured what was previously our ustainability eport into
operations and performance of PC . hey are not
disclosure of ur esponsibilities see pages to that is more aligned with
our stakeholders interests, focusing on areas that are relevant to them. guarantees of future operating, financial or other
results and involve certain risks, uncertainties
ur financial statements, audited by P P , have been prepared in and assumptions. Actual results and outcomes
accordance with the alaysian Financial eporting tandards F ,
may therefore differ materially from those
nternational Financial eporting tandards F and re uirements of the
Companies Act, in alaysia. ur non financial statements reflect local expressed or implied. e make no express or
and international reporting guidelines, namely ain arket isting e uirement implied representation or warranty that the results
of ursa alaysia, the alaysian Code on Corporate overnance anticipated by such forward looking statements
CC , ursa alaysia ustainability eporting uidelines, nternational
will be achieved. hese statements represent one of
ntegrated eporting Framework, as well as the F ood recommendations.
many possible scenarios and should not be viewed
e have made every effort to ensure this Annual eport presents a balanced and as the most likely or standard scenario. e are not
accessible assessment of our strategy, performance, governance and prospects. obligated to update the historical information or
he issues and developments included were determined by uantitative
forward looking statements in this document.
and ualitative considerations that have an impact on our current and future
performance.
OUR REPORTING SUITE PETRONAS
CHEMICALS
GROUP
BERHAD
4 ur annual report serves as the most comprehensive report we produce for our shareholders and other stakeholders. n addition to providing
Section
an account of our financial performance, it also describes the way in which we uphold corporate governance and safeguard our sustainability.
one t is supplemented with online disclosures of our uarterly financial results, analyst briefings, ursa announcements and media releases.
Report Reporting frameworks Assurance/Approval
ANNUAL REPORT
ur primary report for communicating to our Companies Act, in alaysia nternal controls and management
shareholders and other stakeholders alaysian Financial eporting tandards assurance
F Compliance and internal audit reviews
nternational Financial eporting xternal audit by P P on financial
tandards F statements
ain arket isting e uirements oard approval on governance and
of ursa alaysia financial information
alaysian Code on Corporate overnance
CC
nternational ntegrated eporting
Framework
ursa alaysia ustainability eporting
uidelines
F ood recommendations
QUARTERLY FINANCIAL STATEMENTS
Financial statements on our performance Companies Act, in alaysia nternal controls and management
every uarter alaysian Financial eporting tandards assurance
F Compliance and internal audit reviews
nternational Financial eporting imited review by P P on financial
tandards F information
ain arket isting e uirements oard approval upon endorsement by the
of ursa alaysia oard Audit Committee
ANALYSTS AND STAKEHOLDERS BRIEFINGS
Presentations on the roups performance nternal controls and management

and key activities assurance
BURSA ANNOUNCEMENTS
Announcements made to ursa alaysia on ain arket isting e uirements nternal controls and management
material information of ursa alaysia assurance
oard approval
MEDIA RELEASES
Announcements made to the media on key nternal controls and management

corporate, social, environmental and financial assurance
events and activities
eported to the oard and does not cover Part , ther xplanatory otes of uarterly eport to ursa alaysia
o access more information on our announcements, log on to

www.petronaschemicals.com or scan the code
A LEADING CHEMICAL PLAYER IN THE REGION AR16
PCG OPERATES A NUMBER OF WORLD-CLASS PRODUCTION

Section
one
SITES, WHICH ARE FULLY VERTICALLY INTEGRATED FROM

FEEDSTOCK TO DOWNSTREAM END PRODUCTS.
ith a total combined production capacity of . million metric tonnes per annum mtpa , it is involved primarily in manufacturing,
marketing and selling a diversified range of chemical products, including olefins, polymers, fertilisers, methanol and other basic
chemicals and derivative products. isted on ursa alaysia and with three decades of experience in the chemicals industry,
PC is established as part of the P A roup to maximise value from alaysias natural gas resources.
PC is one of the top companies in the F ood ursa alaysia F ndex, out of largest companies ranked by
market capitalisation. t is committed to ensuring that its business practices are in line with globally recognised standards for
nvironment, ocial overnance practices.
THE LEADING INTEGRATED OPERATES A NUMBER OF

CHEMICALS WORLD-CLASS
PRODUCER PRODUCTION SITES
IN MALAYSIA
A TOTAL COMBINED
DIVERSIFIED RANGE OF
PRODUCTION CAPACITY OF
10.8 MILLION CHEMICAL

METRIC TONNES PER ANNUM PRODUCTS
OVER
30
THREE DECADES
OF EXPERIENCE IN THE
CHEMICAL INDUSTRY
YEARS
WHY INVEST IN US PETRONAS
CHEMICALS
GROUP
BERHAD
PCG IS THE INDUSTRY LEADER FOR HIGHLY ATTRACTIVE VALUE CREATION OPPORTUNITIES
6
FOR INVESTORS. WE HAVE MARKET LEADERSHIP ACROSS PRINCIPAL PRODUCTS BESIDES
Section
one
GAS FEEDSTOCK ADVANTAGE AND FULLY INTEGRATED PRODUCTION FACILITIES. OUR CLOSE
PROXIMITY TO KEY GROWTH MARKETS HAS ENABLED US TO FORGE STRONG PARTNERSHIPS
WITH LEADING CHEMICALS AND ENERGY MAJORS.
acked by the parentage and support of P A roup, our competitive strengths also include an attractive
financial profile and an experienced leadership team.
FULLY INTEGRATED FACILITIES AND INFRASTRUCTURE RESULTING IN LOWER COST,

OPTIMUM YIELDS AND GREATER FLEXIBILITY
PCG VALUE CHAIN
l inimise molecule loss
Feedstock asic Products erivatives
l aximises production efficiency margins
ownstream
ncrease argin Capture
erivatives
SECURE AND COMPETITIVE GAS BASED FEEDSTOCK SUPPLY
PC METHANOL,
LABUAN
PC FERTILISER ethane based
KEDAH, GURUN
ethane based PC FERTILISER
KERTIH IPC
thane methane based
SABAH, SABAH
ethane based
GEBENG IPC
Propane butane based
Peninsular as tilisation
ABF, BINTULU
ethane based
pipeline network
as fields
Why Invest in Us (Contd) AR16
MARKET LEADERSHIP WITH ATTRACTIVE GROWTH 7
MARKETS AND RETURNS Section

one
MTBE, BUTANOL, BGE &

1
LARGEST
ST ETHANOLAMINES
PRODUCER IN SEA*
METHANOL PRODUCER AMMONIA, UREA &
IN ASIA PACIFIC AND 2ND BUTYL ACETATE

PRODUCER IN SEA*
4TH LARGEST IN
THE WORLD 3RD ETHOXYLATES, MEG &
LDPE PRODUCER IN SEA*
* by capacity
PROXIMITY TO KEY GROWTH MARKETS

WHICH ENABLES US TO OPTIMISE
CAPACITY
INVENTORY AND HAVE COMPETITIVE
STORAGE AND DISTRIBUTION
l Close to key growth

markets in Asia Pacific
GROWTH
days WITH WORLD-SCALE PLANTS
days
LARGE-SCALE AND
PORTFOLIO DIVERSIFIED
EXPANSION PRODUCT PORTFOLIO
WITH LEADING EDGE LEADING TO ECONOMIES
TECHNOLOGY OF SCALE AND SPREADING
MARKET RISKS
OUR PERFORMANCE HIGHLIGHTS PETRONAS
CHEMICALS
GROUP
BERHAD
8
Section
one
EBITDA MARGIN PROFIT AFTER TAX
38% RM
3.2 billion
EBITDA REVENUE TOTAL DIVIDEND
5.3 13.9 19sen

RM 2016
billion RM per ordinary share
billion
PLANT UTILISATION RATE
96%
l HIGHEST PLANT UTILISATION OF 96% C
83% 85% 85%
78% 80% WORLD
CLASS
l IMPROVED PLANT RELIABILITY
F FF C A A A
l P F C PP
CLOSE RELATIONSHIP WITH SUPPLIERS
2012 2013 2014 2015 2016
CAPITAL EXPENDITURE ALLOCATED FOR EXISTING ASSETS AND FUTURE GROWTH
Capital xpenditure illion 3.3
OPERATIONS CAPEX
.
consists of reliability and integrity pro ects,
turnaround activities, value improvement pro ects
.
.
and other operational re uirements
.
GROWTH CAPEX
. . . 0.7
mainly for A , ntegrated Aroma ngredients
.
Complex, Acid, P and P C
2012 2013 2014 2015 2016

Our Performance Highlights (Contd) AR16
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ITEMS: 9

Section
one
illion unless otherwise stated
2012 2013 2014 2015 2016
months ended
evenue , , , , ,
Profit efore ax , , , , ,
Profit efore ax as evenue 27% 30% 24% 28% 30%
Profit After ax , , , , ,
Profit After ax as evenue 23% 23% 19% 23% 23%
arnings per hare sen asic . . . . .
A , , , , ,
A argin 35% 33% 32% 34% 38%
STATEMENT OF FINANCIAL POSITION ITEMS:
illion unless otherwise stated

2012 2013 2014 2015 2016
As at ecember
otal Assets , , , , ,
otal uity , , , , ,
otal iabilities , , , , ,
et angible Asset per hare . . . . .

Our Performance Highlights (Contd) PETRONAS
CHEMICALS
GROUP
BERHAD
10
Section
one
REVENUE INCREMENT PROFIT AFTER TAX INCREMENT
+ 2% + 4%
2016 2016
compared to compared to
REVENUE (RM Million) PROFIT (RM Million) & MARKET PRICE (USD/MT)
,
820 759
809
557 467
, , ,
, ,
, ,
, , ,
, , ,
,
2012 2013 2014 2015 2016

2012 2013 2014 2015 2016
Profit efore ax Profit After ax Average arket Price
month ended month ended
PROFIT AS % REVENUE EARNINGS PER SHARE-BASIC (SEN)
30% 30%
27% 28%
.
24% .
23% 23% 23% 23%
.
19%
2012 2013 2014 2015 2016

2012 2013 2014 2015 2016
Profit efore ax Profit After ax
month ended month ended

Our Performance Highlights (Contd) AR16
11
Section
TOTAL ASSETS INCREMENT TOTAL EQUITY INCREMENT one
+ 4% + 6%
2016 2016
compared to compared to
TOTAL ASSETS (RM Million) TOTAL EQUITY (RM Million)

,
,
, ,
,
, ,
,
, ,
2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
As at ecember As at ecember
TOTAL LIABILITIES (RM Million) NET TANGIBLE ASSETS PER SHARE (RM)
.
,
.
.
,
.
.
,
,
,
2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
As at ecember As at ecember
OUR MILESTONES PETRONAS
CHEMICALS
GROUP
BERHAD
1985
Commenced
12 production
Section of urea and ammonia in
one
intulu.
1992 1995
Commenced production of
Commenced production of
1997
propylene, polypropylene and Commenced production of
ethylene and polyethylene at
at ebeng Complex. styrene monomer in Pasir
ertih ntegrated Petrochemical
Ac uisition of methanol plant in udang.
Complex PC .
abuan.
2000 1999
Commenced production of acrylic
Commenced production of urea,
acid at A F P A Chemicals
ammonia and methanol in urun.
dn hd, ebeng. Commenced
production of ben ene, paraxylene,
ammonia, vinyl chloride monomer,
polyvinyl chloride and acetic acid at
PC.
2002
Commenced production of 2004
olefins, glycols and derivatives at xpanded production
PC. Commenced production of capacities of urea and
polyvinyl chloride in aria ung ammonia in intulu.
au, ietnam.
2009
Commissioning of mega
2006 methanol plant in abuan.
xpanded production Ac uired interest in P A
capacities of urea and Chemicals lefins dn hd,
ammonia in urun. P A Chemicals lycols
dn hd and P A
Chemicals erivatives dn hd
from ow Chemicals.
Our Milestones (Contd) AR16
13
2010 2011 Section
one
Ac uired interest in P A
anctioned development and
Chemicals thylene and
construction of a new world
P A Chemicals
scale fertiliser plant in ipitang,
Polyethylene from P. isted on
abah A .
ain arket of ursa alaysia.
2012
2013 ook over marketing of chemicals
anctioned development and and performance chemicals in
construction of Asia Pacific s ndonesia and ingapore from
largest ntegrated Aroma ow Chemicals. ecision to
ngredients Complex at A F discontinue vinyl business.
P A Chemicals dn hd
in ebeng.
2014
2014 ecured license for P A
Chemicals arketing abuan td
Completed divestment of Phu
as abuan nternational Commodity
y Plastics Chemicals Co
rading Company. ncorporated
td pursuant to decision to
overseas marketing subsidiaries in
discontinue vinyl business.
hailand PC hailand Co td and
China PC China Co td.
2015 2016
anctioned development and
construction of Acid and P Produced on specification urea for
pro ects at A F P A Chemicals A . Produced on specification Acid
dn hd in ebeng. Ac uired e uity
at A F P A Chemicals dn hd.
in P PC Polymers dn hd, P PC lycols
dn hd and P PC lastomers dn anctioned development and construction
hd which will undertake petrochemical of Flexi P pro ect at P PC Polymers dn
pro ects as part of Pengerang
hd in Pengerang. ncorporated overseas
ntegrated Complex in
Pengerang. marketing subsidiary in ndonesia P
PC imia ndonesia.
OUR OPERATIONS PETRONAS
CHEMICALS
GROUP
BERHAD
14 TERENGGANU
Section Kertih Integrated Petrochemical Complex
one
Ammonia thylene
KEDAH
en ene thylene lycols
Gurun
utanol lycol thers
Ammonia
utyl Acetate Oxogas
ethanol
Carbon onoxide Paraxylene
rea
thanolamines Polyethylene
P Fertilisers
thoxylates Propylene
Acetic Acid
PAHANG
Gebeng Integrated
Petrochemical Complex
ethyl ertiary utyl ther
n utane
Propylene
Acrylics
utanediol
xo alcohols
Acid
JOHOR
Pasir Gudang
tyrene onomer
PETRONAS CHEMICALS GROUP

is headquartered in the FEDERAL TERRITORY
PETRONAS TWIN OF LABUAN

Federal Territory of Labuan
TOWERS
ethanol
SABAH
uala umpur City Centre. he roup Sipitang
Ammonia
comprises subsidiaries, oint rea
ventures and associate companies,

producing and marketing a wide range
of chemical products.
SARAWAK
Bintulu
Ammonia
rea
Products produced by oint venture and associate companies

Our Operations (Contd) AR16
15
Section
one
CURRENT TOTAL
PRODUCTION
CAPACITY OF
10.8 MILLION
METRIC TONNES PER
ANNUM (MTPA)
4.9 MILLION
MTPA 5.9 MILLION
MTPA
PRODUCTION OF PRODUCTION OF
OLEFINS & DERIVATIVES FERTILISER & METHANOL
11 5
FROM FROM
PLANTS PLANTS
PC PC P PC ethanol
PC erivatives A F P A A F
PC lycols Chemicals dn hd PC Fertiliser edah
PC Polyethylene demitsu PC Ammonia
PC lefins alaysia dn hd alaysian P Fertili er dn hd
PC thylene P P A
PC Aromatics Acetyls dn hd
OUR REACH PETRONAS
CHEMICALS
GROUP
BERHAD
16
Section
one
USA
WE MARKET A WIDE RANGE OF CHEMICAL

PRODUCTS TO CUSTOMERS IN 30 COUNTRIES
WORLDWIDE PARTICULARLY IN ASIA PACIFIC. BESIDES
MALAYSIA, OUR KEY MARKETS INCLUDE THAILAND,
INDONESIA, SINGAPORE, VIETNAM, THE PHILIPPINES,
NORTHEAST ASIA, INDIA SUBCONTINENT, NORTH
AMERICA AND AUSTRALASIA.
e are physically present in hailand, China, ndonesia, ndia, ietnam and the Philippines through
our overseas subsidiaries and representative offices.
n total, of our volume is sold in outheast Asia excluding alaysia markets while is
being consumed by the alaysian market. he remaining of our total volume are being channeled
to other key growth chemical markets in ortheast Asia such as China, apan, outh orea, aiwan
and ong ong.
Our Reach (Contd) AR16
17
Section
one
CHINA
SOUTH
KOREA JAPAN
THAILAND VIETNAM
TAIWAN
INDIA
MALAYSIA PHILIPPINES
SINGAPORE
INDONESIA
OUR
AUSTRALIA
REACH
NEW
ZEALAND
GROUP STRUCTURE PETRONAS
CHEMICALS
GROUP
BERHAD
18
Section
one
PETRONAS CHEMICALS GROUP BERHAD
Manufacturing
100% 100% 100% 100% 100% 100% 100% 100%

P A P A P A P A P A P A P A P A
Chemicals Chemicals Chemicals Chemicals Chemicals Chemicals Chemicals Chemicals
Ammonia erivatives Fertiliser Fertiliser lycols ethanol Polyethylene
Sdn Bhd Sdn Bhd Kedah abah Sdn Bhd Sdn Bhd Sdn Bhd Sdn Bhd
PC Ammonia PC erivatives Sdn Bhd Sdn Bhd PC lycols PC ethanol PC PC Polyethylene
PC Fertiliser PC Fertiliser
edah abah
20% 88% . 70% . 60%

alaysian P A P A P A A A P A
P Chemicals Chemicals Chemicals intulu Chemicals
Fertili er lefins thylene Aromatics Fertili er P
Sdn Bhd Sdn Bhd Sdn Bhd Sdn Bhd Sdn Bhd Sdn Bhd
PC lefins PC thylene PC A F PC P
Aromatics
holly owned subsidiaries a ority owned subsidiaries oint ventures and associates

*
holly owned subsidiary as remaining shareholding is held through other subsidiaries within PC
**
ubsidiary pursuant to alaysian Financial eporting tandard
Group Structure (Contd) AR16
19
Section
one
Marketing & Sales Services
100% 100% 100% 100% 100%

Polypropylene inyl Chloride P PC P A ertih Port
alaysia alaysia lastomers Chemicals arketing Sdn Bhd
Sdn Bhd Sdn Bhd Sdn Bhd Sdn Bhd P
PP C P PC PC arketing
lastomers
100% 100%
P A PC China
Chemicals Company
arketing imited
abuan td PC arketing
PC arketing China
abuan
100% 100%
P PC P PC
lycols Polymers
. *
. *
Sdn Bhd Sdn Bhd

PC hailand P PC
P PC P PC
Company imited imia
lycols Polymers
PC arketing ndonesia
hailand PC arketing
ndonesia
40% 30% 30% . 40%

A F demitsu BP PC ertih
P A alaysia P A Chemical erminals
Chemicals Sdn Bhd Acetyls ndia Private Sdn Bhd
Sdn Bhd Sdn Bhd imited
CORPORATE INFORMATION PETRONAS
CHEMICALS
GROUP
BERHAD
20 BOARD AUDIT COMMITTEE REGISTERED OFFICE

Section
one DIRECTORS Vimala V.R. Menon Tower 1
(Chairman) P A win owers
Ching Yew Chye uala umpur City Centre
MD ARIF MAHMOOD uala umpur
Dong Soo Kim
(Chairman) alaysia
Datuk Toh Ah Wah
el
Freida Amat Fax
DATUK SAZALI HAMZAH
(Managing Director/Chief Executive
NOMINATION & REMUNERATION BUSINESS ADDRESS
Officer)
COMMITTEE
evel , ower
VIMALA V.R. MENON Ching Yew Chye P A win owers
(Chairman) uala umpur City Centre
Vimala V.R. Menon uala umpur
CHING YEW CHYE
alaysia
Dong Soo Kim
el
DONG SOO KIM Fax
COMPANY SECRETARIES
DATUK TOH AH WAH Noor Lily Zuriati Abdullah BANKING SERVICES PROVIDER
Kang Shew Meng
P A ntegrated Financial
ZAKARIA KASAH hared ervice Centre F C
REGISTRAR
FREIDA AMAT ymphony hare egistrars dn hd STOCK EXCHANGE LISTING

evel , ymphony ouse
ain arket of
Pusat agangan ana
ursa alaysia ecurities erhad
alan P A
Petaling aya
AUDITORS
elangor, arul hsan
alaysia P P
el
Fax WEBSITE
www.petronaschemicals.com
* Banking requirements are managed centrally by PETRONAS IFSSC to enable more efficient banking management for the Group and the Company
ORGANISATIONAL STRUCTURE AR16
21
CHAIRMAN Section
one
BOARD OF DIRECTORS
BOARD AUDIT
COMMITTEE
COMPANY
SECRETARY
NOMINATION AND
REMUNERATION
COMMITTEE
MANAGING DIRECTOR/
CHIEF EXECUTIVE OFFICER
MANAGEMENT COMMITTEE
PRODUCT PORTFOLIO PETRONAS
CHEMICALS
GROUP
BERHAD
22
Section
OUR PRODUCTS ARE ALL
one
AROUND YOU IN AND OUT OF

YOUR HOME, IN THE OFFICE, THE
MALL AND CINEMA. BECAUSE
OF THEIR COMPOSITION AND
PROPERTIES, PETROCHEMICALS
HAVE APPLICATIONS IN A WIDE
RANGE OF ITEMS THAT WE USE
DAILY. THEYRE FOUND IN WHAT
WE WEAR, OUR SKIN AND HAIR
PRODUCTS, AND IN ALMOST ALL
PACKAGING OF GOODS WE BUY.
ith innovation, more uses are being found for petrochemicals

to make life better. hey keep enriching the world we live in. And
we are proud to be a part of this evolution.
Product Portfolio (Contd) AR16
OLEFINS,
G LY C O L S & 23
D E R I VAT I V E S Section
one
P O LY M E R S
A R O M AT I C S
& MTBE
METHANOL
AMMONIA &
FERTILISERS
CHEMICALS
GROUP
BERHAD
22
Section
one
O L E F I N S , G LY C O L S
& D E R I VAT I V E S
KEY PRODUCTS DESCRIPTION FEEDSTOCK APPLICATION
Ethylene A two carbon molecule Ethane Feedstock for production of polyethylene,

colourless gas converted ethylene glycol, ethylene oxide (EO) and
from natural gas derivatives of EO
Propylene A three carbon molecule Propane Feedstock for the production of acrylic
colourless gas converted acids, acrylic esters and oxo-alcohols
from natural gas
Monoethylene A colourless hygroscopic Ethylene Feedstock for manufacturing polyester

Glycol (MEG) liquid derived from Oxide fibers, polyethylene terephthalate resins
ethylene glycol (PET) and an ingredient of antifreeze
products
Diethylene Glycol A colourless hygroscopic Ethylene Oxide Ingredient in printing ink, pigments and dyes
(DEG) liquid derived from ethylene
glycol
Performance Colourless liquids derived Ethylene Oxide, Surfactants, gas treating solvents and
Chemicals from ethylene oxide Ammonia, personal care products
Fatty Alcohol
23
Section
one
WE KEEP YOU AND YOUR

SURROUNDINGS CLEAN
Petrochemicals are found in a wide range of cleaning agents, from shampoos
and soaps to dishwashing liquids, and detergents used to wash your clothes.
They remove grit and grime from your home, keep your clothes spotless, and
your own body feeling fresh and clean.
CHEMICALS
GROUP
BERHAD
22
Section
one
P O LY M E R S
Polyethylene Solid resins produced Ethylene Feedstock for manufacturing plastic

(LLDPE, HDPE, from the polymerisation of products, including packaging films, wires,
LDPE) ethylene cables and ducting
A R O M AT I C S
Paraxylene A six-carbon ring structure Naphtha Production of terephthalic acid, used in the
molecule, which is a manufacture of polyester for packaging
colourless, flammable liquid applications, drink bottles and textiles
Benzene A six-carbon ring structure Naphtha Feedstock for manufacturing polystyrene

molecule, which is a used for packaging
colourless, flammable liquid
MTBE
Methyl Tertiary A five-carbon molecule Butane, Gasoline additive to boost octane level
Butyl Ether colourless liquid Methanol to improve burning of fuels and reduce
(MTBE) emissions
23
Section
one
WE MAKE SURE YOU HAVE

FRESH, NOURISHING FOOD
Not only do we produce fertilisers that enhance food production, our petrochemicals are also used
in the manufacture of plastics and packaging materials that ensure fresh food maintains all its
goodness until it reaches your table, and that cooked or processed food can be kept till needed.
CHEMICALS
GROUP
BERHAD
22
Section
one
METHANOL
Methanol Simplest organic alcohol Methane Production of formaldehyde, acetic acid,

and is a colourless chloromethanes and methyl methacrylate,
flammable liquid which in turn are used in the production
of resins, adhesives, paints, plastics,
flavourings, silicones and plexiglass
AMMONIA &
FERTILISERS
Ammonia A nitrogen and hydrogen Methane, Feedstock for the production of urea and
compound colourless gas Hydrogen, other industrial applications, including use
with a characteristic Nitrogen as refrigerant and latex anti-coagulant
pungent odour
Urea A high nitrogen-content Ammonia, Fertiliser used for the supply of nitrogen to
organic solid Carbon Dioxide crops and raw material for manufacturing
adhesives, moulding powders, varnishes and
foams
23
Section
one
WE ADD COLOUR
TO YOUR LIFE
All the colours you see around you the paint on walls and works of art; the
interesting patterns on garments; hair dyes and even cosmetics they contain
petrochemical products that have been refined and are safe to use.
CHEMICALS
GROUP
BERHAD
22
Section
one
JOINT VENTURE & ASSOCIATE PR ODUCTS
Acrylics Crude Acrylic Acid (CAA): Propylene Primarily used in the production of superabsorbent
Colourless liquid with a strong polymers (SAP) used in diapers, in the production of acrylic
smell. t is flammable and esters and in the manufacturing of plastic resins, coatings
corrosive and adhesives
Glacial Acrylic Acid (GAA): Clear, Primarily used in the production of superabsorbent
colourless liquid with a pungent polymers (SAP) used in diapers, in the production of acrylic
odour. It is corrosive and is esters and in the manufacturing of plastic resins, coatings
flammable and adhesives
Butyl Acrylate (BA): Flammable, Mainly used in the manufacture of resins, coatings,
colourless liquid with a "fruity" adhesives and plastics
smell
2-Ethylhexyl Acrylate (2-EHA): Mainly used in the manufacture of resins, coatings,

Clear, colourless liquid with a adhesives and plastics
"fruity" smell
Oxo-Alcohols 2-Ethylhexanol (2-EH): Flammable, Propylene Mainly used for the production of plasticisers
clear liquid with a distinctive smell
n-Butanol (n-Bol): Flammable, Mainly used as a solvent in the paint industry and for the
colourless liquid with an alcoholic production of PVC plasticisers
smell
iso-Butanol (i-Bol): Flammable, Mainly used as a solvent in the paint industry and for the
colourless liquid with an alcoholic production of PVC plasticisers
smell
Iso-butyraldehyde (i-BA): Toxic, Chemical intermediate or raw material used to make

flammable, colourless to yellow different types of solvents and resin intermediates for the
liquid with a strong smell paint and ink industries
Oxo Oil: Flammable, yellowish ainly used as an auxiliary in floatation processes in the
liquid with pungent odour mining industry (coal, copper, silver, gold and phosphorus,
etc) and as a defoamer in the aluminium industry
23
Section
one
Butanediol 1,4-Butanediol (BDO): Colourless n-Butane Butanediol and its derivatives are used in a broad spectrum
and almost odourless liquid of applications in the chemical industry; amongst others
in the manufacturing of technical plastics, polyurethanes,
solvents, electronic chemicals and elastic fibres
Tetrahydrofuran (THF): Colourless, Mainly used in the production of a polymer used to

water-miscible liquid with an ether- manufacture elastomers and fibers. F is also a versatile
like odour solvent with applications in areas such as adhesives,
vinyl films and cellophanes, industrial resins, elastomers,
coatings and printing inks
gamma-Butyrolactone (GBL): An sed in the production of clinical needs, for filtering

industrial chemical with excellent beverages and cleaning auxiliaries. GBL is also used for
solvency, little toxicity and few applications in conductor wafer cleaning in the electronics
environmental hazards industry or high-tech industry as well as an intermediate for
the synthesis of other chemicals
2-EHAcid Colourless to yellow liquid with a 2-ethylhexenal Chemical intermediate used in esters for Polyvinylbutyral
faint odour (2-EHol) P film plasticisers and synthetic lubricants, in metal
salts for paint dryers, in automotive coolants, PVC
stabilisers, cosmetics and various other applications. In
cosmetics, 2-EHAcid is used to produce emollients. Other
applications include corrosion inhibitors in automotive
coolants, catalyst for polymer production, raw material for
acid chloride and fragrances
Styrene Monomer A clear, colourless, flammable Benzene, Production of polystyrene which is used in packaging
liquid with a distinctive aromatic Ethylene containers and high impact plastic such as acrylonitrile
odour butadiene styrene (ABS), latex paints and most synthetic
rubber
Acetic Acid Chemical intermediate in the Methanol, Precursor for making various vinyl acetate, metal acetate
form of colourless liquid Carbon and cellulose acetate. Vinyl acetate is used for coatings and
Monoxide adhesives, metal acetate is used in printing, and cellulose
acetate is used to make film for photography. Also used
in the production of esters used as solvents in many
commercial products, such as inks and paints
Various NPK Grades Clear colourless granules with a Urea, Ammonia, nd fertilisers of high yield growth for paddy fields and oil
of Fertilisers characteristic odour Phosphates, palms
Potassium
CHEMICALS
GROUP
BERHAD
W E R E A L L A R O U N D YO U
22
Section
one
23
Section
one
E N R I C H I N G YO U R L I V E S
E V E R Y DAY, I N E V E R Y WAY
CHEMICALS
GROUP
BERHAD
22
Section
one
www.petronaschemicals.com
OLEFINS,
G LY C O L S & 23
D E R I VAT I V E S Section
one
P O LY M E R S
A R O M AT I C S
& MTBE
METHANOL
AMMONIA &
FERTILISERS

Pursuing excellence through operational, commercial and innovation excellence

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E XC EL LEN C E.

ANNUAL REPORT 2016

FOCUSING OUR ENERGIES ON STRENGTHENING

MARKET UNCERTAINTIES, WE SET NEW BENCHMARKS

PROJECTS THAT DRIVE OUR STRATEGIC VISION. WITH

OUR BASIC P E T R O C H E M I CA L S BUSINESS, WHILE

H THE PENGERANG INTEGRATED COMPLEX (PIC) AS

AKEHOLDERS WHICH CONTRIBUTE TO OUR ONGOING

PLANT RELIABILITY CUSTOMER FOCUS INNOVATIVE SOLUTIONS

SUPPLIER RELATIONSHIP MANAGEMENT CX CAPABILITIES

/LOCATION/ /LOCATION/ /LOCATION/ /LOCATION/ /LOCATION/

5.1 million mtpa primarily contributed by SAMUR and PIC

/POSITION/ /POSITION/ /POSITION/ /POSITION/ /POSITION/

/EMPLOYMENT OPPORTUNITIES/ /EMPLOYMENT OPPORTUNITIES/ /EMPLOYMENT OPPORTUNITIES/

OUR VISION The preferred

About his eport

ustainability at P A Chemicals roup erhad

This section provides a comprehensive account of

who we are, how we create value for our various

s ta keholder s , and the domains w here we opera te.

It also explains what we intend to accomplish

through this annual report and provides details

of where supplementary information on the

Company can be found.

About his eport

A eading Chemical Player in the egion

he cross referencing icons refer readers to

AS THE LEADING INTEGRATED CHEMICALS PRODUCER IN MALAYSIA AND ONE 3

OF THE LARGEST IN SOUTHEAST ASIA, PCG HAS AN EXTENSIVE NUMBER OF Section

STAKEHOLDERS WHO ARE IMPACTED BY OUR BUSINESS, NOT ONLY BY OUR

Report Reporting frameworks Assurance/Approval

QUARTERLY FINANCIAL STATEMENTS

ANALYSTS AND STAKEHOLDERS BRIEFINGS

Presentations on the roups performance nternal controls and management

Announcements made to the media on key nternal controls and management

o access more information on our announcements, log on to

PCG OPERATES A NUMBER OF WORLD-CLASS PRODUCTION

SITES, WHICH ARE FULLY VERTICALLY INTEGRATED FROM

THE LEADING INTEGRATED OPERATES A NUMBER OF

10.8 MILLION CHEMICAL

FULLY INTEGRATED FACILITIES AND INFRASTRUCTURE RESULTING IN LOWER COST,

SECURE AND COMPETITIVE GAS BASED FEEDSTOCK SUPPLY

MARKET LEADERSHIP WITH ATTRACTIVE GROWTH 7

MARKETS AND RETURNS Section

MTBE, BUTANOL, BGE &

METHANOL PRODUCER AMMONIA, UREA &

IN ASIA PACIFIC AND 2ND BUTYL ACETATE

PROXIMITY TO KEY GROWTH MARKETS

l Close to key growth

EBITDA REVENUE TOTAL DIVIDEND

5.3 13.9 19sen

PLANT UTILISATION RATE

2012 2013 2014 2015 2016

CAPITAL EXPENDITURE ALLOCATED FOR EXISTING ASSETS AND FUTURE GROWTH

Capital xpenditure illion 3.3

2012 2013 2014 2015 2016

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ITEMS: 9

Profit efore ax as evenue 27% 30% 24% 28% 30%

Profit After ax as evenue 23% 23% 19% 23% 23%

arnings per hare sen asic . . . . .

A argin 35% 33% 32% 34% 38%

STATEMENT OF FINANCIAL POSITION ITEMS: