Integrated Report 2024

TOGETHER. HARNESSING POTENTIAL.

INSIDE THIS REPORT

The theme “Together. Harnessing Potential.” encapsulates the spirit of collaboration at the heart of our success. The cover celebrates the seamless integration of science, people and purpose, highlighting the collective strength that drives meaningful change. It showcases how innovation and cooperation unlock pathways to sustainability and progress, bridging the gap between challenges and opportunities. By harnessing the unique potential of our partnerships and expertise, we pave the way for impactful solutions that benefit industries, communities and the environment, demonstrating that together, we achieve more.

BASIS OF THIS REPORT

1. Integrated Reporting Approach
2. Our Reporting Suite

PCG AT A GLANCE

4 Overview of PCG

6 Sustaining Value Creation*

1. Integrated Product Value Chain

1. Our Global Sustainable Impact

LEADERSHIP MESSAGES

1. Chairman’s Statement

1. MD/CEO’s Review

1. CFO’s Review

OUR PERFORMANCE

22 SEGMENTAL REVIEW

• Commodities
• Specialty Chemicals

33 FINANCIAL REVIEW

• Simplified Group Statement of Financial Position
• Analysis on Financial Position
• Analysis on Consolidated Statement of Profit or Loss
• Analysis on Cash Flows
• Group Quarterly Performance
• Key Interest Bearing Assets and Liabilities
• 5-YearGroup Financial Summary
• 5-YearGroup Financial Highlights
• Statement on Value Added

41 SUSTAINABILITY REVIEW

• Sustainability Approach

NAVIGATION ICONS

HOW WE CREATE VALUE

1. Operating Environment and Outlook

1. Stakeholder Engagement

1. Material Matters
2. Value Creating Business Model

1. Strategic Review
• Operational Excellence
• Commercial Excellence
• Growth Delivery Excellence

66 Risks Overview

COMMITMENT TO STRONG GOVERNANCE

1. Organisational Structure
2. Corporate Information
3. Board of Directors’ Profile

1. Company Secretaries
2. Management Committee Profile

1. Corporate Governance Overview Statement

1. Nomination and Remuneration Committee Report

1. Board Audit Committee Report

1. Board Sustainability and Risk Committee Report

1. Statement on Risk Management and Internal Control

ADDITIONAL INFORMATION

1. Top 10 Properties of PCG Group

1. Analysis of Shareholdings

1. Performance Data

1. Independent Limited Assurance Report

1. Notice of 27th Annual General Meeting

1. Administrative Guide

1. Glossary of Terms, Abbreviations and Acronyms

• Proxy Form

* This information is available in our corporate website via QR code generated on the respective page

Dear Stakeholders,

At PETRONAS Chemicals Group Berhad, we create value for stakeholders through our Sustainability Agenda, which integrates Environmental, Economic and Social pillars, with Governance as a cornerstone. Transparency, accountability and responsibility remain essential in building trust and driving sustainable progress.

BASIS OF THIS REPORT

INTEGRATED REPORTING APPROACH

PETRONAS Chemicals Group Berhad (PCG or the Group) ranks among the largest companies listed on Bursa Malaysia Main Market. In line with our commitment to good governance and transparent communication, we focus on delivering comprehensive and balanced performance reports for our stakeholders, partners and communities we engage with. This commitment is encapsulated in PCG’s Integrated Report 2024, which not only covers financial results but also integrates discussions on sustainability and future prospects, providing stakeholders with a clear vision of our direction in the short, medium and long-term.

OUR REPORTING BOUNDARIES

This Integrated Report (IR) covers the reporting period of 1 January 2024 to 31 December 2024, unless otherwise stated. Information presented relates to the risks, opportunities and outcomes of activities in the Group, comprising our subsidiaries, joint operation, associates and joint ventures.

OUR REPORTING SUITE

At PCG, we recognise that transparency and clarity are essential to maintaining the trust of our stakeholders. As a global integrated chemicals enterprise, we are committed to providing comprehensive insights into our business direction, strategic priorities and performance. Equally, we acknowledge the importance of addressing the material risks that affect our operations and growth. Through consistentandthoughtfulreportingpractices,weaimtobuildupontheconfidence our stakeholders place in us and demonstrate our commitment to accountability, resilience and sustainable value creation.

Integrated Report 2024 (IR)

BASIS OF THIS REPORT

OUR APPROACH TO

DELIVERING IMPACT IS GUIDED BY

Financial Reporting Boundary

Covers our operating subsidiaries, joint operation, associates and joint

ventures.

Non-Financial Reporting Boundary

Covers our operating subsidiaries, joint operation, associates and joint

ventures where we have management responsibility. We have excluded the plant utilisation statistics from our Specialty Chemicals division given the non-commoditised nature of its business.

Strategy, including key strategic trade-offs

1. Read more on pages 50 to 65 in the Integrated Report.

Business model, including value created for stakeholders

1. Read more on pages 50 to 53 in the Integrated Report.

External environment, including sustainability-driven initiatives

1. Read more on pages 42 to 44 in the Integrated Report.

Stakeholder interests, including our responses

1. Read more on pages 45 to 48 in the Integrated Report.

The objective of PCG’s IR is to provide our stakeholders with a thorough and balanced assessment of both financial and non-financial performance. By reading this report, stakeholders will gain a better understanding of our business operations, sustainability initiatives, performance metrics, governance, risk management and future prospects. This report demonstrates our commitment to transparency and aims to bolster the trust and confidence of our stakeholders. Within the governance section, we provide comprehensive coverage of our Corporate Governance activities via the Corporate Governance Overview Statement, Nomination and Remuneration Committee Report, Board Audit Committee Report, Board Sustainability and Risk Committee Report and the Statement on Risk Management and Internal Control.

Guided by:

We have prioritised 13 of the 17 UN SDGs where we believe we have the greatest ability to deliver meaningful impact through our core business.

For more information on PCG’s:

1. Sustainability Agenda, refer to Sustainability Approach on page 41 of the Integrated Report and page 10 of the Sustainability Report.

INDEPENDENT COMBINED ASSURANCE STATEMENT

Assurance for this report is provided by our Board of Directors and supported by independent assurance by KPMG PLT for both financial and non-financial information.

An independent limited assurance was performed by KPMG PLT on selected sustainability indicators for the financial year ended 31 December 2024 as listed below:

The boundary of the limited assurance for indicators 1-9 cover PCG's manufacturing subsidiaries in Malaysia whilst Indicator 10 and 11 cover all of PCG's subsidiaries in Malaysia (boundary for Indicator 11 includes BRB International B.V., BRB Lube Oil Additives & Chemicals B.V. and CSL Silicones Inc.).

KPMG Sweden has been engaged to perform a limited assurance engagement on the selected sustainability indicators listed above for Perstorp Group (Perstorp), excluding air emissions.

1. Read more on pages 103 to 106 for the Independent Auditors' Report in the Financial Report.

1. Read more on pages 139 to 140 for the Independent Limited Assurance Report in the Integrated Report.

• International Integrated Reporting Framework (IIRF) as issued by Value Reporting Foundation (VRF)
• Malaysian Code on Corporate Governance (MCCG)
• Main Market Listing Requirements (MMLR) as issued by Bursa Malaysia
• Companies Act 2016 (CA 2016)
• MFRS Accounting Standards as issued by the Malaysian Accounting Standards Board
• IFRS Accounting Standards as issued by the International Accounting Standards Board
• Corporate Governance Guide – 4th Edition as issued by Bursa Malaysia

Financial Report 2024 (FR)

Our FR includes the Directors’ Report, Audited Financial Statements and Independent Auditors’ Report. The report offers comprehensive financial information to our shareholders, investors, analysts and other relevant parties.

Guided by:

• MMLR as issued by Bursa Malaysia
• CA 2016
• MFRS Accounting Standards as issued by the Malaysian Accounting Standards Board
• IFRS Accounting Standards as issued by the International Accounting Standards Board

Sustainability Report 2024 (SR)

PCG’s SR details our performance in Environmental, Economic, Social and Governance (EESG) contexts. The report describes our initiatives and their outcomes that are aimed at creating positive and sustainable impacts for all our stakeholders.

Guided by:

• MMLR as issued by Bursa Malaysia
• Global Reporting Initiative (GRI) Universal Standards 2021
• FTSE4Good Bursa Malaysia Index’s Environmental, Social and Governance (ESG) Indicators
• IPIECA Sustainability Reporting Guidance for the Oil and Gas Industry – 4th Edition, 2020
• Dow Jones Best-in-Class Indices
• The United Nations Sustainable Development Goals (UN SDGs)
• IFRS Sustainability Disclosure Standards, IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures)

1. Contribution to the 13 selected UN SDGs, refer to SDG Targets Alignment on https://www.petronas.com/pcg/sustainability/ sustainability-pcg.

MATERIALITY

The information in the report focuses on issues that are most material to our business operations and stakeholders. Our approach to identifying, prioritising and confirming these material matters involves a comprehensive four-step materiality assessment process.

FEEDBACK

PCG is committed to constantly enhancing the quality of our reports and we greatly value input from our stakeholders. If you have any questions or suggestions, please contact:

Name : Zaida Alia Shaari

Position : Head of Investor Relations

Email : petronaschemicals_ir@petronas.com

FORWARD-LOOKING STATEMENTS

This report includes several forward-looking statements relating to future performance. These projections and forecasts are grounded in present assumptions and conditions, which are subject to change and therefore carry some uncertainties. Numerous factors might lead to actual outcomes that may vary from those expressed or implied in these forward-looking statements.

BOARD RESPONSIBILITY STATEMENT

OVERVIEW OF PCG

PETRONAS Chemicals Group Berhad (PCG) stands as the chemical arm of PETRONAS and as Malaysia’s premier integrated chemical manufacturer. Our operations span the production, marketing and distribution of a wide variety of chemical products. PCG marked a significant milestone by going public on 26 November 2010. Through our commitment to Operational Excellence and Commercial Excellence, we are now a prominent integrated chemical producer in Southeast Asia. Our global presence extends across 21 manufacturing sites located in Malaysia, the Netherlands, Sweden, Singapore, Germany, Italy, China, India, the USA and Canada. The Group’s dedication to Growth Delivery Excellence has been pivotal in our expansion into specialty chemicals sector, ensuring our business is future-ready.

In line with our aspiration to become ‘The Preferred Chemical Company Providing Innovative Customer Solutions’, we strive to generate positive outcomes across economic, environmental and social spheres. Central to our strategy is sustainability, guiding us towards our ambition to achieve Net Zero Carbon Emissions (NZCE) by 2050.

DRIVEN BY OUR STRATEGY

FIRST-PRONG

Sustain strength in basic petrochemicals through Operational Excellence & Commercial Excellence in Maximising Cash Generation from existing business

OUR EXPERTISE

With 21 world-class chemical manufacturing sites worldwide, we produce a diverse range of commodities and specialty chemicals that serve industries from agriculture and automotive to packaging and personal care.

Our integrated chemical solutions

OVERVIEW OF PCG

OUR KEY DIFFERENTIATORS

Environmental

Commitment to Net Zero

• PCG is committed to achieving NZCE by 2050 through sustainable investments, climate risk management, and strategic initiatives
• Ongoing initiatives include driving emissions reduction across operational assets and prioritising decarbonisation projects that are value accretive

Green Product Innovations

• The commissioning of an International Sustainability and Carbon Certification (ISCC) PLUS certified plant in India underscores PCG’s commitment to offering sustainable products aligned with global environmental standards

Economic

OUR PURPOSE

A progressive energy and solutions partner enriching lives for a sustainable future

OUR VISION

To be the preferred chemical company providing innovative customer solutions

At PCG, we define our purpose beyond the traditional business boundaries, aligning our efforts with environmental stewardship, social responsibility and economic growth. We strive to meet current business demands while ensuring long-term sustainability through advanced technologies and sustainable practices. Our vision to be the preferred chemical company is underpinned by our commitment to providing innovative solutions that are designed with resilience and adaptability in mind, preparing us and our stakeholders for the challenges and opportunities in an evolving world.

customers to create products that enhance everyday life. Through innovation and expertise, we deliver best-in-class commercial value to customers globally.

Global Reach and Market Leadership

• Strong customer relationships and a diversified global product portfolio to meet current and future needs
• Reputable industry leader with a robust network of strategic alliances built on long-standing partnerships

Financial Strength and Growth Potential

• Strong financial performance, with RM30.7 billion in revenue and an EBITDA of RM3.5 billion in 2024
• Focused on asset growth and portfolio expansion into derivatives and specialty chemicals, with a commitment to sustainable investments, delivering strong returns, and maintaining the capacity to fund future growth
• Attractive dividend policy that consistently delivers substantial returns to shareholders

Operational Excellence

Our approach integrates innovation into our core, aiming to deliver solutions that not only meet current demands but also anticipate future needs, ensuring our adaptability and resilience. This dedication extends to our workforce and societal engagement, where we foster a culture of growth and achievement, driving positive change beyond our industry. As we look to the future, PCG will continue to be guided by sustainability in its efforts to create long-term value, seeking to minimise its impact on nature while promoting social responsibility. We aim to strike a balance between Environmental, Economic, Social and Governance (EESG) imperatives and value creation as well as operational resilience.

TWO-PRONGED

STRATEGY

KEY FACTS

Social

Investing in People

• A diverse and inclusive workforce with strong support for women’s representation and consistent investments in training and professional development

Creating Positive Impact

OUR SHARED VALUES

Our shared values are deeply embedded in our culture to ensure we operate with integrity at all times while contributing to the well-being of people in every nation where we have presence.

SECOND-PRONG

Selectively diversify into derivatives, specialty chemicals and solutions through Growth Delivery Excellence via Expanding Core & Stepping-out opportunities

Market Capitalisation:

As at 31 December 2024

RM41.4 billion

Production Capacity:

16.8 million TPA

Total Assets Base:

RM60.0 billion

One of the largest integrated chemicals producers in Southeast Asia

Constituent of FTSE4Good Bursa Malaysia Index for 11 consecutive years

Listed as Top 10% Companies for four consecutive years in the Dow Jones Best-in-Class Indices (formerly known as Dow Jones Sustainability Indices) for World and Emerging Markets (Chemicals Industry)

• PCG contributes to community development through social impact initiatives
• Effective customer engagement ensures alignment with stakeholder expectations

Focus on Talent and Innovation

• Seven global Research & Development (R&D) laboratories drive innovation and position PCG as a leader in delivering customer- focused chemical solutions

Governance

Ethics and Transparency

• Adherence to high standards of corporate governance and business ethics ensures PCG’s reputation as a trusted and reliable partner
• Transparency in disclosures enables informed decision-making for

investors and stakeholders Industry Recognition

• Sustained inclusion in the Dow Jones Best-in-Class Indices for World and Emerging Markets (Chemicals Industry) and FTSE4Good Bursa Malaysia Index demonstrates leadership in sustainability practices
• Multiple awards in 2024, including Australasian Reporting Awards (Gold) and The Edge Malaysia ESG Awards (Silver), reinforce PCG’s

commitment to governance excellence Strategic Alliances and Partnerships

• Long-standingpartnerships and a strong network of alliances bolster PCG’s capacity to navigate industry challenges and deliver value

SUSTAINING VALUE CREATION

AWARDS & RECOGNITIONS

Our dedication and relentless contributions to the industry in 2024 earned us various awards and recognitions. These accolades reflect our commitment to delivering long- term value for our stakeholders through innovating sustainable products and solutions for our customers.

Scan the QR code to view the full list of our Awards & Recognition.

OUR MILESTONES

PCG has consistently demonstrated a deep commitment to creating value. PCG’s dedication to value creation extends beyond singular achievement in diversification, specifically in the specialty chemicals segment, and is rooted in a sustained track record of excellence.

Our growth from one production site in East Malaysia to 21 world-class chemical manufacturing sites and seven Research & Development (R&D) laboratories in Malaysia, the Asia-Pacific, Europe, and North America stemmed from our perseverance and vision in providing innovative customer solutions and enriching lives.

SynmerseTM DC

SynmerseTM DC is a high- performance immersion cooling solution, a specialty product, based on a readily biodegradable synthetic fluid to meet growing data centre cooling needs.

Synmerse™ DC was introduced at Data Centre World Asia, Singapore, on 9-10 October 2024, showcasing its innovative and sustainable solutions to meet thermal management challenges in modern data centres.

Aligned with Perstorp’s Finite Material Neutrality goal, Synmerse™ DC is designed with a future adaptable approach that flexibly uses traceable, mass-balanced, renewable, or recycled raw materials.

Its key features include exceptional thermal management, reduced power consumption, extended fluid lifetime, low maintenance, material compatibility and operational safety with high flash and fire points. 100% Per-and Polyfluoroalkyl Substances (PFAS)-free and non-hazardous under Globally Harmonised System (GHS).

Emfinity®

Emfinity® is BRB’s new brand for personal care

2024

Achieved commercial operations for our growth investments for

• Pengerang Petrochemical Complex and Nitrile Butadiene Latex plant in Pengerang, Malaysia
• Specialty Ethoxylates and Polyether Polyols plant in Kertih, Malaysia
• 2-EthylhexanoicAcid (2-EHA) in Gebeng, Malaysia

• Introduced Emfinity®, BRB new brand for personal care ingredients
• Introduced SynmerseTM DC, a high-performance immersion cooling solution, to meet data centre cooling needs
• Achieved the following for CDP (formerly known as Carbon Disclosure Project): B- for Water Security
  C for Climate

B- indicates solid environmental management

1. reflects awareness and measurement of environmental impacts

ingredients. Through Emfinity®, we hope to empower beauty through emphatic consumer engagement, fuelled by an infinite array of cosmetic ingredients solutions.

Co-developed with PETRONAS Research Sdn. Bhd., Emfinity® CGSA 200B is a biobased emollient that offers superior product texture, performance, and sustainability, enhancing consumer experience in personal care applications.

Emfinity® CGSA 200B was introduced in April 2024 at in-cosmetics Global, Paris, France, thereafter transitioned from R&D to preparation for commercialisation in November 2024.

In 2025, BRB is set to expand the Emfinity® CGSA 200B range to enrich the offering for personal care ingredient through innovation and sustainability endeavours.

INTEGRATED PRODUCT VALUE CHAIN

Methane C1

Methanol Acetic Acid

Ammonia Urea NPK Fertilisers

Butane C4 MTBE Aroma Chemicals

Highly Reactive Polyisobutene (HRPIB)

M A R K E T

Naphtha Aromatics

Ethylene

Propylene

Mix C4

Polymers

Glycols

Butadiene Nitrile Butadiene Latex

Resource

Air

Land

Sea

Olefins, Glycols, and Derivatives

Methanol and MTBE

Aromatics

Ammonia and Fertilisers

Polymers

Products from Associates and Joint Ventures (JVs)

Specialty Chemicals

Siloxane

Butene

Propylene

Ethylene

Acetaldehyde

Methanol

OUR GLOBAL SUSTAINABLE IMPACT

AS AT 31 DECEMBER 2024

BUSINESS ACHIEVEMENTS

SALES BY MARKETS

Malaysia

30%

Southeast Asia

excluding Malaysia

39%

CHAIRMAN’S STATEMENT

Dear Stakeholders,

PCG has demonstrated conviction and commitment to creating value for our stakeholders as well as adapting to an evolving global landscape. Despite numerous challenges, including economic headwinds and a persistent downcycle in the chemicals industry, we remained steadfast in pursuing our strategic initiatives. Guided by our strategic thrusts and the courage to face challenges, we strengthened our position for a brighter future.

DATUK SAZALI HAMZAH

Chairman

NAVIGATING CHALLENGES, STRENGTHENING OUR FUTURE

ESG-RELATED INITIATIVES

GHG Reduction Initiatives:

PCG achieved 151 kilotonnes of CO₂e reduction through energy efficiency improvements as well as flare and vent reduction projects.

Sustainable Certifications & Compliance:

PCG secured Protect & Sustain Certification for urea, renewed ISCC PLUS certification and initiated EcoVadis sustainability benchmarking.​

Water Conservation Success in Sweden:

Perstorp’s Stenungsund wastewater facility in Sweden is projected to save 1.1 billion litres of freshwater annually, contributing to resource conservation.

Northeast Asia

17%

Rest of the World

14%

To view our Malaysian operations, please scan the QR code.

OVERVIEW OF THE YEAR

The year 2024 presented a dynamic operating environment that tested our resilience and adaptability. Amidst global economic fluctuations, the geopolitical landscape remained complex, impacting supply chains and market stability. According to the International Monetary Fund (IMF), global gross domestic product (GDP) growth for 2024 stood at 3.2%. Regional economies displayed varied performances, with Southeast Asia remaining resilient, supported by targeted policy measures and improved export activities.

Crude oil prices were stable within USD70 to USD85 per barrel range, primarily due to Organisation of the Petroleum Exporting Countries (OPEC+) market management, yet rising energy costs and inflationary pressures weighed heavily on production expenses. For the chemicals sector, the interplay of these factors led to a year of cautious recovery with ethylene prices in Southeast Asia averaging about 9% higher compared to 2023. Industry production levels grew year-on-year, supported by the gradual easing of the destocking cycle and the resurgence of demand in key markets. A significant stimulus package announced by China in September 2024 buoyed regional markets, although volatility persisted as implementation measures unfolded.

In this challenging climate, we were steadfast in our commitment to our strategic thrusts: Operational Excellence, Commercial Excellence and Growth Delivery Excellence. We proactively navigated market headwinds with focused initiatives that improved plant reliability, returning our plant utilisation rates to optimum levels. Additionally, we enhanced energy efficiency, diversified product offerings, expanded our market base, explored cross-selling opportunities and strengthened our regional presence to ensure uninterrupted supply to customers. Sustained investments in customer engagement initiatives fostered long-term relationships and emphasised value-added services, further solidifying our competitive positioning.

Noteworthy growth projects that commenced commercial operations in 2024 are Pengerang Petrochemical Complex, Specialty Ethoxylates and Polyether Polyols, Nitrile Butadiene Latex and 2-Ethylhexanoic Acid plants, which expanded our product portfolio and improved our ability to meet market needs. Furthermore, our acquisition of OQ Chemicals Nederland B.V., renamed as Perstorp Amsterdam B.V., strengthened our specialty chemicals platform, enabling greater control over production assets and technologies.

In line with our resilient performance, the Group achieved a record-breaking revenue of RM30.7 billion in 2024, up from RM28.7 billion in 2023, even with the downturn in product prices. Profitability was impacted by cost pressures with EBITDA declining to RM3.5 billion from RM3.8 billion. Despite these challenges, the Board declared a first interim dividend of 10 sen per share and a second interim dividend of 3 sen per share, amounting to RM1.0 billion, reaffirming our commitment to shareholder returns while supporting growth.

As the industry anticipates an eventual upturn, we remain resolute in our commitment to operational discipline and strategic execution, laying the groundwork for sustained growth in a rapidly evolving landscape.

GROWTH PROJECTS

• Commenced commercial operations
• Pengerang Petrochemical Complex
• Specialty Ethoxylates and Polyether Polyol plants
• Nitrile Butadiene Latex plant
• 2-EthylhexanoicAcid plant
• Acquisition of OQ Chemicals Nederland B.V.

CHAIRMAN’S STATEMENT

GOVERNANCE AND INTEGRITY: STRENGTHENING ETHICAL FOUNDATIONS

“Safety also remains paramount, with the Board

undertaking a comprehensive review of our Health, Safety and Environment (HSE) policy

Safety also remains paramount, with the Board undertaking a comprehensive review of our Health, Safety and Environment (HSE)”policy. The HSE policy underscores a zero-tolerance approach to lapses in safety, ensuring that all operations adhere to the highest standards. We will continue to enhance our safety training and awareness programmes as we embed a proactive risk management culture across the organisation.

STRIVE FOR ZERO, ZERO IS POSSIBLE (SFZZIP) PROGRAMME FRAMEWORK

SUSTAINABILITY: A PRAGMATIC APPROACH TO PROGRESS

Sustainability remains a central pillar of our strategy, with significant efforts directed towards environmental, economics, social, and governance goals. A practical and pragmatic approach underpins our sustainability strategy. Recognising the challenges and costs in achieving zero emissions, we prioritise economically feasible solutions that deliver impactful results. Operationally, we adopt measures with lower carbon footprints, while maintaining affordability and operational efficiency. Commercially, this approach means we work closely with customers across different regions to tailor sustainable solutions that align with their specific market needs and local or regional regulations.

In the context of climate action, we remain guided by our NZCE 2050 Roadmap. In the year under review, we implemented several initiatives to reduce greenhouse gas (GHG) emissions. Additionally, we enhanced our emissions reporting transparency by incorporating Scope 3 emissions for categories 1, 6, 7, and 11 in our disclosures.

CHAIRMAN’S STATEMENT

OUTLOOK

The global economic landscape in 2025 presents a mix of opportunities and challenges. According to the IMF, global GDP growth is projected to stabilise at 3.3%, signalling a cautiously optimistic outlook. Key drivers include a recovering labour market, moderating inflation and improving consumption trends in major economies. However, geopolitical tensions, lingering inflationary pressures and market volatility will require ongoing vigilance.

For the chemicals industry, growth is anticipated to align with global recovery, with investments focusing on high-tech, clean energy and advanced materials. We are well-positioned to capitalise on these trends through our three strategic thrusts: Operational Excellence, Commercial Excellence and Growth Delivery Excellence. These pillars will enable us to optimise our value chain, maintain high plant utilisation rates and ensure the delivery of innovative and sustainable products.

Sustainability will remain central to our strategy, with continued focus on reducing GHG emissions, developing circular products and supporting the development of low-carbon products. By aligning our operations with emerging regulatory requirements and market needs, we aim to reinforce our position as a leader in sustainable chemical

Visual Management for Turnaround (TA) and Specialty Chemicals

We complemented this with energy efficiency projects and investments in renewable energy sources. To further our environmental objectives, we inaugurated a state-of-the- art ISCC PLUS certified plant in Bharuch, India. This facility uses renewably sourced raw materials and hybrid electricity, showcasing our commitment to innovative and sustainable manufacturing practices.

solutions.

While uncertainties persist, we view them as opportunities for innovation and resilience. We remain committed to navigating the evolving landscape with agility, ensuring long-term value creation for stakeholders and positioning ourselves for sustained growth in a competitive global market.

Enhancement of

HSE Community of

Practice (CoP)

FELT Leadership Engagements by Commercial Leadership Team (CLT)

Use Balance of Consequences (BoC) to reward positive

behaviour and reinforce negative behaviour

Shape Generative Culture by doing the right thing all the

time, even when no one is watching

Continue practising Let’s Comply and Intervene (Jom Patuh dan Tegur) at the respective work areas

Build psychological safety by creating a safe space among

colleagues and subordinates to voice their concerns

Line of Fire (LoF) Intervention Strategies

Slip, Trip & Fall Intervention Strategies

Our strong sustainability performance saw PCG maintain its inclusion in the FTSE4Good Bursa Malaysia Index for the 11th consecutive year and its listing in the Dow Jones Best- in-Class Indices for the fourth consecutive year.

On the social front, we advanced our Diversity & Inclusion (D&I) agenda through effective employee engagement initiatives, leadership sharing sessions and the deployment of practical toolkits. The Board’s adoption of the PETRONAS Human Rights Policy further strengthened our commitment to safeguarding labour rights and socio-economic well- being in our operations and supply chain.

ACKNOWLEDGEMENTS

As we conclude this year’s report, I extend my heartfelt gratitude to all those who have contributed to our journey in 2024. First and foremost, I wish to acknowledge the commitment of our employees, whose dedication and professionalism have been the driving force behind our resilience and achievements.

I would also like to express my deepest appreciation to my colleagues on the Board of Directors for their guidance and unwavering support throughout the year. A special note of thanks goes to our former Chairman, Datuk Ir. (Dr.) Abdul Rahim Hashim, for his invaluable contributions and steadfast leadership that have left an enduring legacy within PCG.

To our stakeholders, including shareholders, customers, suppliers and business partners, I extend my sincere gratitude for your trust and partnership. Lastly, I want to recognise the contributions of the local communities where we operate for their continued support.

We also prioritised aligning governance practices across our expanding international footprint, particularly following the integration of Perstorp and BRB. Strengthening governance frameworks in these subsidiaries ensured that we maintain and adhere to the same standards of integrity and compliance across all our operations. This alignment enhances operational efficiency and reinforces stakeholder confidence in our ability to operate responsibly globally.

In addition, we are taking steps to enhance our competitiveness by tailoring remuneration packages to specific business segments within our ecosystem. Moving away from a one-size-fits-all approach, we will be adopting compensation structures aligned with the unique demands and market conditions of each business. This strategy supports talent retention and attraction and ensures agility in meeting the specialised needs of our diverse operations.

GOING BEYOND COMPLIANCE

• Enhanced Integrity Management oversight structure
• Comprehensive review of HSE policies
• Alignment of governance practices across international footprint
• Tailored remuneration packages to support talent retention

D&I Sharing by Khalidah Ambiah, Chief Executive Officer of PETRONAS Chemicals Fertiliser Kedah.

As we look ahead to 2025 and beyond, I am confident that we will continue to rise together to navigate the challenges of a dynamic world, delivering excellence, innovation and sustainability in all that we do. Thank you for being part of this journey.

DATUK SAZALI HAMZAH

Chairman

MD/CEO’S REVIEW

Dear Stakeholders,

As we close another year, I am reminded of the resilience and conviction that define our journey as a company. At PCG, our purpose is guided by three core commitments: delivering dependable and innovative solutions to our customers, creating long-term value for our shareholders andadvancingourcommunitiestowardamoresustainable

MD/CEO’S REVIEW

PROGRESSING STRATEGY

As we progressed through 2024, we remain guided by our two-pronged strategy driven by the three strategic thrusts of Operational Excellence, Commercial Excellence and Growth Delivery Excellence. These thrusts are the foundation upon which we deliver on our commitments to our customers, communities and shareholders. Each initiative undertaken within these areas was aligned with our mission to ensure value creation today while building resilience and growth for tomorrow.

future. These commitments are ones we continue to deliver on, despite the challenges of a dynamic and often unpredictable external environment.

MAZUIN ISMAIL

Managing Director/Chief Executive Officer

DRIVING EXCELLENCE, UNLOCKING OPPORTUNITIES

Operational Excellence

At the heart of our operational strategy is our commitment to ensuring the health and safety of our people and all stakeholders we work closely with, alongside maintaining the reliability and efficiency of our plants.

While we have consistently upheld a zero-compromise approach to safety under our Health, Safety, and Environment (HSE) Excellence initiatives, we are deeply saddened to report a fatality at one of our facilities in 2024. In addition, we recorded four Lost Time Injury (LTI) incidents and two major Loss of Primary Containment (LOPC) incidents.

These incidents are deeply concerning and we responded immediately with corrective actions, including a company-wide safety stand-down, gap assessments and the reinforcement of critical safety protocols. PCG’s response strengthened the safety culture across all facilities, with enhanced training and safety ownership initiatives that aims to prevent future incidents and further embed a proactive approach to safety.

In terms of plant reliability, our plant utilisation rates have returned to above 90% levels. This was largely a result of our proactive approach in looking for ways to improve efficiency and reduce downtime. Structured reliability programmes and enhanced contractor management further ensured minimal unplanned shutdowns and improved plant readiness. Continuous training initiatives and a strong collaborative approach with both internal and external parties together with the adoption of advanced digital tools, empowered our teams to identify efficiency improvements.

The year 2024 presented its share of complexities. From a prolonged low cycle in the chemicals industry to geopolitical and economic headwinds, these challenges tested our resolve and capabilities. Yet, amidst these difficulties, I am pleased to highlight that PCG demonstrated its resilience, leveraging operational excellence, strategic agility and strong partnerships to sustain value creation. Notable achievements include maintaining high levels of plant utilisation and delivering increased sales volumes in selected segments despite market volatility.

Looking back on the year, I am thankful for the trust placed in us by our stakeholders and the dedication of our employees, whose efforts ensured we stayed true to our commitments. Together, we have not only navigated through 2024 but strengthened our ability to capture future growth opportunities.

“Notable achievements include improving plant utilisation and delivering increased sales volumes in selected segments despite market volatility.

”

THE OPERATING ENVIRONMENT

The petrochemical industry faced another year of significant challenges in 2024. The persistent low cycle, driven by a combination of weak demand growth and oversupply, tested the resilience of industry players globally. This imbalance was compounded by broader factors, including geopolitical uncertainties, inflationary pressures and volatile feedstock prices. Key markets saw uneven recovery patterns. China, with its capacity expansions, continued to reshape global supply dynamics, adding pressure to prices and margins. Meanwhile, the industry wide transition towards sustainability practices particularly in developed economies signals a mixture of opportunities and challenges to market players, which adds further complexity to the operating environment.

At PCG, we navigated internal challenges, including rising feedstock costs and plant reliability issues at the start of the year. Aligning with the industry effort towards greener initiatives, PCG also participates in circular plastics and bio- based chemicals, aiming to reduce our carbon emissions and footprint. While 2024 was one of the most challenging years for the industry, PCG’s ability to anticipate and respond to market shifts ensured that we continued to deliver value despite the broader pressures.

1. Read more on pages 55 to 57.

Commercial

Excellence

Furthermore, disciplined spending on timely plant turnarounds ensured that our facilities remained robust and capable of meeting customer demands reliably. This discipline extended to ensuring that spending on both maintenance and safety are not compromised despite ongoing margin pressures. Other key initiatives included investments in energy optimisation and flaring reduction, which exemplify our commitment to the environment, as we align operational improvements with sustainability goals.

In a market characterised by oversupply and price volatility, commercial agility was critical to our success. PCG’s ability to leverage deep market knowledge and strong customer relationships enabled us to maintain a high Order Fulfilment Reliability (OFR) result of 95%, reinforcing our commitment to our customers. Additionally, our customer portal offers real-time updates and personalised solutions to over 230 customers worldwide to further reinforcing our commitment to address specific customer needs.

Strategic sourcing emerged as a cornerstone of our commercial strategy, with sourcing volumes increasing by 25% year-on-year. These efforts ensured continuity of supply and safeguarded our position as a preferred supplier in the region. We also intensified our route- to-market efforts to support upcoming volumes from key projects like the Pengerang Integrated Complex (PIC). This proactive approach allowed us to place 0.98 million metric tonnes of pre-operation output in the market seamlessly.

Additionally, PCG achieved a significant milestone with our first foray into the medical industry following the signing of a Memorandum of Understanding with TOMOE SHOKAI Co., LTD. for the supply of ethylene oxide from our Kertih plant to support its sterilisation business.

MD/CEO’S REVIEW

OUTLOOK

MD/CEO’S REVIEW

ACKNOWLEDGEMENTS

Growth Delivery

Excellence

1. Read more on pages 62 to 65.

SUSTAINABILITY AT THE CORE

Delivering on growth commitments remained a priority in 2024, as we advanced in key projects to align with both market needs and sustainability trends. Highlights include:

• Pengerang Petrochemical Complex: Achieved commercial operation in November 2024, producing petrochemical products, which are 50% owned by PCG, including polymers and glycols with a total production capacity of 2,450 KTPA.
• Nitrile Butadiene Latex (NBL): Operational in September 2024, positioned to leverage Malaysia’s leadership in the global glove market, with sales volume of over 50 KTPA in 2024. The plant has the capacity to produce 200 KTPA of NBL annually.
• Specialty Ethoxylates and Polyether Polyols: Achieved commercial operation in May and July 2024 respectively, meeting demand for automotive foam, cleaning and personal care products. Synergies with specialty chemicals are expected to enhance performance.
• 2-EthylhexanoicAcid (2-EHA):Achieved commercial operation in August 2024. This joint venture plant has doubled its capacity to 60 KTPA and will address regional demand for 2-EHA applications, including synthetic lubricants and Polyvinyl butyral (PVB) plasticisers.
• Isononanol (INA): Currently in its commissioning stage and will produce 250 KTPA of isononanol annually, used for the production of higher molecular weight plasticisers applied in automotive and building industries. Target to achieve commercial operation in 2025.

In addition, the specialty chemicals segment continues to make steady progress. The acquisition of the OQ Chemicals Nederland B.V., renamed as Perstorp Amsterdam B.V. will drive the growth strategy for the Engineered Fluids segment. Integration efforts with Perstorp have continued its course, bolstered by the establishment of a Perstorp office in Malaysia. We have also strengthened our capabilities in specialty chemicals with the inauguration of an Internal Sustainability & Carbon Certification (ISCC) PLUS certified plant in Bharuch, India, expanded capabilities in China and the introduction of BRB Group’s (BRB) new personal care line, Emfinity®.

In keeping with our commitments, we continuously reassess and prioritise ongoing or future growth projects to ensure alignment with long-term value creation. This deliberate approach underscores our responsibility to deliver both immediate and sustainable returns for stakeholders. In this context, the commissioning of our advanced recycling plant in Pengerang has been delayed due to project execution challenges and we will make further announcements on this project in due course.

The global economy is forecasted to experience slow growth in 2025, driven by high energy prices, tight monetary policies and ongoing geopolitical conflicts. These factors are likely to weigh heavily on consumer demand and industrial activity, particularly in chemical-consuming sectors.

The industry is also expected to contend with persistent oversupply and demand imbalances. Key players in China continue to ramp up capacity expansions, intensifying competitive pressures and further suppressing margins.

In 2025, PCG will focus on leveraging its strengths to navigate challenges and maintain competitiveness. Operational excellence will remain central to our strategy, ensuring cost efficiency, asset reliability and proactive value creation. We will also strengthen our commitment to achieving ZERO incidents.

Collaboration will be critical to sustaining and enhancing our competitiveness, alongside efforts to grow new business by building a strong project funnel, achieving growth milestones and expanding our specialty chemicals portfolio. A key consideration in the context of the commercial viability of new growth opportunities will be the anticipated introduction of carbon taxes in Malaysia by 2026 in the energy, oil and gas as well as steel sectors. In addition, driving climate action and achieving our sustainability goals remain top priorities as we continue integrating sustainable, value-adding products into our offerings to align with our EESG commitment.

On the commercial front, we aim to expand our market reach by targeting new regions and untapped customer segments. We are also on track to fully commercialise the Melamine and Maleic Anhydride (MAn) plants, bolstering our capabilities

As we reflect on 2024, I extend my heartfelt gratitude to everyone who contributed to PCG’s journey. To our employees, your dedication in ensuring operational reliability, driving innovation and embracing sustainability has been instrumental in reinforcing PCG’s industry leadership. To our customers, business partners and shareholders, we thank you for your trust and continued support.

I would also like to express my sincere appreciation to the Board of Directors for their guidance and counsel throughout the year. On behalf of the entire organisation, I extend our deepest gratitude to Datuk Ir. (Dr.) Abdul Rahim Hashim for his exceptional leadership as Chairman of the Board. His contributions have been invaluable in shaping PCG’s direction. At the same time, we warmly welcome Datuk Sazali Hamzah as our new Chairman. Having served as PCG’s Managing Director/Chief Executive Officer (MD/CEO) from 2014 to 2021, Datuk Sazali brings a wealth of experience and a deep understanding of our business. We are confident that under his leadership, PCG will continue to thrive.

Looking ahead, we remain committed to building a stronger, more sustainable future. The resilience demonstrated in 2024 gives us confidence that we can continue to deliver on our commitments to customers, shareholders and communities. Together, we are building a more resilient, sustainable and prosperous PCG, creating positive and lasting impacts for the communities we serve and driving progress in the operating landscape we share.

MAZUIN ISMAIL

Managing Director/Chief Executive Officer

At PCG, sustainability is not just a commitment but a guiding principle that shapes how we create lasting value. We strive to reduce our environmental footprint, uphold social responsibility and ensure that our approach to Environmental, Economic, Social and Governance (EESG) priorities is both forward-thinking and practical, balancing ambition with operational strength.

In 2024, we established PCG’s Sustainable Portfolio centred on three focus areas: Low-Carbon solutions and Carbon Dioxide utilisation; Circular Economy solutions and Bio- based chemicals. These pillars reflect our commitment to shaping a sustainable future and meeting the evolving expectations of our stakeholders.

Key operational efforts in 2024 included advancing our Net Zero Carbon Emissions 2050 Roadmap and implementing greenhouse gas (GHG) reduction strategies across our operating units. Initiatives such as steam and energy optimisation, electrification and flaring reduction resulted in a 151 kilotonnes reduction in CO2e emissions this year.

On the commercial front, PCG prioritised sustainable product development and certification to support customers’ sustainability journeys. Achievements included the launch of Pevalen™ Pro 100, ISCC PLUS certified plasticiser made entirely from renewable carbon and maintaining certifications such as Protect & Sustain (P&S) and ISCC PLUS Trader Scheme. These milestones, coupled with the first EcoVadis Silver medal for PCG, a Platinum medal for Perstorp and another Silver medal for BRB, reaffirm our alignment with global sustainability benchmarks.

In tandem with environmental goals, we advanced circular economy projects and invested in innovation through the Technology & Innovation Fund and Sustainability Fund to accelerate innovations to meet sustainable product demand. Internally, we emphasised capability development and certification programmes, launching initiatives such as the PCG Sustainability Training Matrix and PCG’s Sustainable Project Management. Collaborative efforts included hosting the Petrochemicals Sustainability Conference 2024 and engaging in international partnerships, such as the Strategic Plastic Incentive Programme in Indonesia and waste reduction initiatives in Thailand.

Our "PCG Be Green" initiative expanded its international reach, addressing waste management and environmental restoration in collaboration with partners like PCX Markets and the TerraCycle Thai Foundation. Through these partnerships, we engaged local communities and promoted environmental awareness. Ultimately, sustainability at PCG is about delivering values for our stakeholders while striking the right balance by driving meaningful EESG progress. By focusing on initiatives that are impactful, inclusive and pragmatic, we are positioning PCG to thrive in an increasingly sustainability-focused world.

To be update

Giving back to the local communities through canal clean-up activation in collaboration with Terracycle Thai Foundation in Bangkok, Thailand.

in Southeast Asia and beyond. Simultaneously, our global innovation network will continue to explore bio-based solutions, reinforcing our leadership in sustainable chemicals. Strategic sourcing will ensure reliable and consistent supply to meet customer demands.

Overall, while we possess the conviction, resilience and strategies to navigate a challenging environment, we will continue to pay close attention to our financial performance and profitability. We are cognisant of the fact that we are not immune to market volatility and will ensure steadfast vigilance in the preservation of value for our stakeholders. We will ensure prudent spending and effective capital allocation as we focus on capturing immediate value and building a strong foundation for long-term sustainable growth.