Risk Factor Key Risk Management Measures Establish a Business Continuity Management System (BCMS) and regularly conduct the Business Continuity Plan (BCP) drills for emergencies and crises that may result in business interruption to mitigate the effects of such events and/or shorten the rehabilitation period, as well as establish pre-incident plans and consistently conduct drills both in the factories and for oil spills. GC Group has necessary insurances in place to limit any potential damage from unforeseen circumstances. Market Volatility and Business Performance Risk GC is facing market pressures driven by various external factors, such as geopolitical unrest, and the ongoing risks of economic recession, which impact the demand for end products. These are accompanied by an increase in production capacity, particularly in China due to its self-sufficiency policy, which has led Chinese manufacturers to expand into performance/specialty chemicals and increase backward integration. Simultaneously, the direction of certain national-level policies may also affect product pricing and demand and GC’s profitability, such as free trade agreements and petrochemical trade flows from the United States and the Middle East, which are expected to intensify competition in the Southeast Asian market in the future. Mitigation measures for market impacts Implement Market-Focused Business Transformation (MFBT) strategies, expand the product portfolio towards HVP business with low price volatility, improve the innovation portfolio, and develop product solutions that better cater to end markets. Conduct rolling price forecasts and weekly assessments of impact on operating results and adjust production/sales plans accordingly. Foster cooperation within PTT Group in various dimensions, such as re-optimization, product exchange, and location swap/ co-load. Implement a defensive strategy to safeguard existing customer bases in CLMV and broaden market reach to new countries, such as Africa and India. Work with the Petrochemical Industry Club of the Federation of Thai Industries in presenting insights on the impact of free trade agreements with UAE to the Department of Trade Negotiations. Mitigation measures for impacts on business performance and liquidity Prepare a robust GC Recession Playbook for both GC and companies in GC Group. Implement commercial hedging to reduce the impact of product price volatility as approved by the Value Chain Management Committee (VCM). Establish and implement additional ancillary measures, such as the sale and leasing of precious metals and business restructuring. Plan portfolio adjustments and intensify supervision of GC Group companies with regard to financial, investment, and operational policies to achieve the established goals in collaboration with partners. 89 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2023
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