New naphtha cracker in the Philippines

JG Summit Petrochemical Corp.’s $800-million naphtha cracker, scheduled to operate by 2014, would make the Philippine’s petrochemical industry more globally competitive as the project would reduce imports of chemicals and would fire up existing plants. Mario Jose Sereno, executive director of the Association of Petrochemical Manufacturers of the Philippines, however, said that the Philippine government should now act on a petition it filed for higher tariffs on imported resins prior to the operation of the cracker. Mr. Sereno said tariffs on polymers such as polypropylene (PP) and polyethylene (PE) should be reverted to 15 percent from the existing 10 percent. He added that tariffs should go back to 15 percent when a cracker is operational or a similar technology is in place. He said that such technology for backward integration is now in place via Philippine Propylene Corp., an affiliate of Petron Corp. which produces PP using raw materials from Petron’s fluid catalytic cracker in Bataan. Today, Philippine plastic manufacturers import half of their polymer requirements and half is sourced locally. JG Summit’s cracker will have a combined capacity for PP and PE of 500,000 MT of which 400,000 tonnes are targeted for the local market and the rest for export to Vietnam and China.

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