Rayong Olefins Company (ROC), a unit of Thailand’s Siam Cement Group (SCG), has restarted its olefins production facility after roughly six months of suspended operations caused by a Middle East-driven feedstock crunch. The plant, which halted production in March amid disruption to naphtha and propane supplies routed through the Strait of Hormuz, resumed operations on September 17, 2026, after SCG secured alternative, non-Hormuz feedstock from sources including Malaysia and Africa.
ROC is an olefins production subsidiary under SCG Chemicals (SCGC), SCG’s chemicals business arm, producing ethylene and other olefins in Rayong, Thailand, that feed into the country’s downstream petrochemical value chain. According to SCG’s disclosure, ROC suspended operations on March 10, 2026, citing feedstock procurement disruption stemming from the situation in the Middle East. At the time, the ongoing conflict in the region constrained the flow of crude oil, natural gas, and petrochemical feedstock through the Strait of Hormuz, a route that is reported to account for a substantial share of SCG’s raw material imports. Speaking at the company’s annual general meeting in March 2026, SCG management described the closure of the Strait of Hormuz as one of the most serious challenges the company has faced in recent years, noting that an estimated 50 to 60 percent of its feedstock is transported through the route. As a result, ROC declared force majeure to its trading partners and customers and scaled back production to manage limited feedstock availability. The latest restart is reported to follow SCG’s success in securing alternative supply routes bypassing the Strait of Hormuz, including feedstock sourced from Malaysia and Africa.
ROC’s olefins production capacity is reported at approximately 1.35 million tonnes per year. The suspension began on March 10, 2026, and lasted roughly six months until the September 17, 2026 restart. SCG estimated that the shutdown added fixed cash costs of around 150 million baht per month during the suspension period. Map Ta Phut Olefins Company (MOC), another SCG affiliate with an annual production capacity of approximately 2.05 million tonnes, continued normal operations throughout the disruption and is reported to have absorbed part of ROC’s feedstock allocation to support output. SCG stated it is targeting a combined utilization rate of over 80 percent across ROC and MOC once integrated, approaching pre-crisis levels. On the sourcing side, the company is reported to have secured additional naphtha and propane supplies from non-Hormuz origins, including Malaysia and Africa.
The restart illustrates how prolonged instability in the Middle East is prompting petrochemical producers to restructure feedstock sourcing away from reliance on a single maritime chokepoint. SCG is reported to be pursuing feedstock diversification in parallel through overseas assets such as the Long Son Petrochemicals (LSP) complex in Vietnam.
This case underscores how materially geopolitical risk in the Middle East can affect olefins and broader petrochemical plant operations once it materializes. It confirms that feedstock sourcing structures overly dependent on a single maritime chokepoint, such as the Strait of Hormuz, can translate directly into production halts and elevated fixed costs when geopolitical shocks occur. This is likely to accelerate a broader industry trend of diversifying feedstock origins and pre-arranging alternative routes and supply sources for contingency scenarios across the regional petrochemical sector. For feedstock trading and logistics players, the episode may also drive increased naphtha and propane volumes sourced from non-Hormuz origins such as Malaysia and Africa. Additionally, the case demonstrates how operators running integrated production complexes can partially offset the impact of a single unit’s shutdown by reallocating feedstock and output across other units within the same group.
First, the timeline for actually achieving combined utilization above 80 percent across ROC and MOC — approaching pre-crisis levels — will be a key indicator of how quickly normalization proceeds. Second, it remains to be seen whether alternative feedstock sourcing from Malaysia and Africa can be sustained reliably, and how much additional cost this sourcing shift entails. Third, should conditions around the Strait of Hormuz deteriorate again, it will be worth watching whether SCG’s newly established contingency sourcing network can respond effectively or whether a similar shutdown could recur. Fourth, the pace at which SCG advances its broader overseas diversification strategy, including the Long Son Petrochemicals complex in Vietnam, in the wake of this disruption is also worth monitoring going forward.