Corporate Governance

The Company recognizes the importance of risk management
integration policy to ensure the Company's steady growth

Corporate Risk Management

The Company recognizes the importance of risk management integration policy to ensure the Company's steady growth with reduced or minimum damages caused by surrounding environmental and potential risks, which could have damaged the Company's employees, assets, business operations, and reputation.

Executives and the employees are to adhere to the risk management policy so as to create awareness, collaborate, and streamline the risk management practices throughout the organization. Risk management processes and the level of manageable risk at an appropriate level are clearly defined, and in-line with the risk management strategies, action plans, and activity plans of all units. This includes such measures as continued risk assessments, review, enhancement, development of risk management process, as well as the annual review of risk management policy. Such measures aim to ensure the Company's risk management process and policy are in place and able to respond positively to the changing business environment. The Company shall appoint the Risk Management Committee to oversee and manage the overall risk management of the organization, who are required to submit quarterly risk reports to the Audit Committee.

Risk Management Structure

IRPC’s risk management structure consists of the Board of Directors, Risk Management Committee (RMC), Risk Management Steering Committee (RMSC), and Risk Management Division.

Risk Correlation

The risk analysis was initially identified the correlation addressing the utmost impact to IRPC business, of which resulting in price volatility of raw materials and products as business risk and foreign exchange rate and Interest as financial risk. The statistically data from the previous 3 years have been considered and finding the mathematical equation correlation to forecast the future risk.

Risks Correlation Analysis Matrix

Emerging Risk and Mitigations

Description of Risks Mitigations
1. Risk for Free Trade Area and Changing Trading Regulation, for example, Trans-Pacific Partnership (TPP) that will affect with IRPC’s business opportunities in term of product development and market opportunities, as well as to promote the new product research in order to respond the customer’s various needs, for instance, green and energy saving product, etc. Develop the production and marketing to adapt to the new regulation. As well as expand the markets to the region where there is no impact from regulation change.
2. Risk for Natural Gas (NG) Supply will be shortage which will affect to IRPC business operation such as power and utility plant will be shut down due to black out. The forecast of NG supply may be exhausted from drilling in the Gulf of Thailand within 10 years. Study the process to change other raw material to replace NG such as fuel oil, LPG etc. and coordinate within PTT Group to prepare infrastructure for impacting or using from other source of NG.
3. Risk of disruptive technology such as Electric Vehicles (EV): The technology substitution will decrease gasoline demand. The electrical power demand will increase instead. In consequence, the demand in the market can create minor impact to IRPC’s gasoline production in short team period, and can lead to significantly impact in long term (estimated gasoline for sales may be decreased 10%, which will happen in more than 10 years). 1) Study the new technology to change or replace gasoline product to the other products such as gasoil product or petrochemical products.
2) Develop new grade of polymer products use in EV car.
4. Risk of Bunker Fuel specification will be changed to 0.5% sulfur in 2020-2025 by International Maritime Organization (IMO). It will force the usage to shift from high sulfur fuel oil to low sulfur fuel oil or gasoil product. The major impact to IRPC is that the high sulfur fuel oil product cannot be sold for marine ships anymore. Moreover, the freight cost will be increased. The expansion of electrical power business is considered to capture future opportunity. 1) Upgrade conversion unit (UHV plant) for cracking high sulfur fuel oil to gasoil or gasoline product
2) Study the optimized ways of transportation to reduce cost.