Firm commitment needed from promoters of naphtha cracker in Philippines

15-Feb-05

JG Summit Petrochemicals Corp. (JGSPC), a joint venture between JG Summit Holdings of taipan John Gokongwei and Marubeni Corp. of Japan, plan to set up the Philippines' first ever naphtha cracker facility in Batangas City with a capacity of 350,000 metric tons. The proposed facility, to be build at an investment outlay of US$300 million, is projected to start commercial operations by the first half of 2008. Also, state-run Philippine National Oil Co. (PNOC) has decided to defer its proposed 1.2 million metric tons naphtha cracker to 2009. However, keeping in view the small size of the Philippine market of 300,000 metric tons, the local plastic processors have expressed doubts regarding the viability of the proposed naphtha cracker facility of JGSPC, The Department of Trade and Industry in Philippines has given proponents of the proposed naphtha cracker until this week to firm up their commitment in order to prove that the local petrochemical industry is entitled to longer tariff protection. Earlier, the government had extended tariff protection to the local petrochemical industry on the premise that major players would put up the much-needed naphtha cracker. Despite an uneventful 2 years when tariff protection was extended, but no cracker was initiated, tariff protection is now being sought once again.