Tuesday, April 10, 2007 Foreign firm mulls investing in petrochem trade in RP
THE largest energy company in Thailand, PTT Public Company Ltd., is eyeing a possible joint venture with the Gokongwei's-JG Summit Holdings Corp. to develop the petrochemical business in the Philippines.
PTT executive vice president for petrochemical and refinery business group Pailin Chuchottaworn revealed that they have "ongoing talks with JG Summit for some form of cooperation."
"We're still in the early stage of discussions with JG Summit," Chuchottaworn said but refused to disclose further details of the planned joint venture.
He said since JG Summit is a publicly listed company in the Philippines, it is therefore prudent not to disclose details of the deal yet.
"But we have a very good relationship with JG. We have been in contact with them for some time already. My understanding is that JG Summit is in the process of reviving its petrochemical business and has a lot of investment plans and we fully support JG Summit's endeavor," he said.
Although PTT's main business in Thailand is still oil and gas, Chuchottaworn said they are also focusing on petrochemical industry as a new source of revenue.
"We believe that JG Summit is a very good investment partner (for petrochemical)," he said.
Among the subsidiaries of PTT engaged in the petroleum industry include the PTT Chemical Public Co. Ltd., Aromatics Thailand Public Co. Ltd., Bangkok Polyethylene Public Co. Ltd., PTT Polymer Marketing Co. Ltd., PTT Polyethylene Co. Ltd. and PTT Phenol Co. Ltd.
"In 2006, we have been exporting more than 50,000 tons of petrochemical feedstock. And our exports numbers are growing. From our exports statistics, the Philippines is one of the top five countries for our export of plastic products in Thailand. The domestic demand is growing by 19 percent. And sooner or later the Philippines will change in terms of position from number five to number three or be the third from China and Vietnam market," Chuchottaworn said.
Meanwhile, JG Summit's petrochemical activity includes the production of polypropylene (PP) used in making films, adhesive tapes, cigarette and candy wrappers, cosmetics, pharmaceutical and food packaging materials. It also produces polyethylene (PE), particularly the High Density Polyethylene (HDPE) used in making large drums, bleach bottles, shopping bags, crates nets and pails, and Linear Low Density Polyethylene (LLDPE) used for heavy-duty sacks, lamination films, industrial cosmetics, pharmaceutical and food packaging materials.
JG Summit's petrochemical plant was put up in Barangay Simlong, Batangas City on April 6, 1998. Since then, the company became the country's first integrated PP and PE complex.
The company is also planning to construct the country's first naptha cracker plant to be located within the 10-hectare complex in Batangas.
The P26-billion proposed facility would complete the full integration of the domestic petrochemical industry. The main feedstock of the plant is naptha. It is a petroleum by-product generated in oil refineries that is processed into monomers (ethylene and popylene). Monomers are used as raw materials for the production of polymers.
At present, existing polymer plants (PP and PE) are importing monomers, the raw materials needed for the petrochemical process. The naptha cracker plant is aimed at cutting down dependence on imported ethylene and propylene feedstock.
Earlier, JG Summit said naptha will be sourced locally although it will also be imported.
JG Summit will own 82.28 percent of the proposed naptha cracker plant while Murubeni Corp. of Japan will have 17.71 percent.
About 70 percent equity and 30 percent will come from loans. JG Summit would operate the naptha cracker plant in December 2008. (MSN/Sunnex)
