JG Summit upbeat on petrochem unit
MANILA, Philippines—Gokongwei-led JG Summit Holdings Inc. expects its petrochemical business, which will begin operating the country’s first naphtha cracker in early 2014, to become the “fourth leg” of the conglomerate.
The group, at present, has food, property and airline as core businesses.
JG Summit also expects to unlock values from two “growth” businesses—banking and infrastructure—to complement its core subsidiaries in the years ahead.
The group plans to grow Robinsons Bank into a more “significant” player in the banking system and participate in some public-private partnership programs in infrastructure, particularly airports.
During the company’s stockholders meeting last week, JG Summit president and chief operating officer Lance Gokongwei said the construction of the group’s $800-million naphtha cracker was on track and should start commercial operations in the first quarter of 2014.
The project is seen providing stability to the local petrochemical industry, which has suffered from raw material supply shortages. This project is expected to directly employ 500 workers while support services could expand the workforce to 2,000, JG Summit said in a report to stockholders.
“The petrochem business is going to be the fourth leg of the group with expected turnover of $1 billion once production is at full stream,” Gokongwei said.
The group is investing $800 million in the petrochemical plant in Batangas. The bulk of the amount was earmarked for the naphtha cracker and the expansion of the existing polyethylene production capacity from 200,000 metric tons (MT) to 320,000 MT.
“Our petrochemical plants will provide at least two-thirds of the country’s total demand for polypropylene and polyethylene resins,” Gokongwei said.
The naphta cracker is expected to produce 320,000 MT of ethylene, 190,000 MT of propylene, 216,000 MT of pyrolysis gas and other by-products such as methane, pyrolysis, fuel oil and acid gases totaling 925,537 MT yearly. The facility will have its own 4-megawatt power plant using waste materials from the naptha unit.