JG Summit naphtha cracker plant to start in early 2014

MANILA, Philippines - The JG Summit Group said it expects its naphtha cracker and polyethylene facility, whose cost is estimated to cost $800 million, to start commercial operations by the first quarter of 2014.

JG Summit president Lance Gokongwei told The STAR that the facility will produce resins for the Philippine market, as well as for export to China and Vietnam.

The project is being undertaken by JG Summit Petrochemical Corp. (JGSPC), a subsidiary of JG Summit Holdings. The plant will produce multiple grades of polyethylene and polypropylene resins. High-density polyethylene (HDPE) is used to make large drums, bleach bottles, shopping bags, crates nets and pails while polypropylene (PP) is used in making films, adhesive tapes, cigarette and candy wrappers, cosmetics, pharmaceutical and food packaging materials. Meanwhile, linear low density polyethylene (LLDPE) is used for heavy-duty sacks, lamination films, industrial cosmetics, pharmaceutical and food packaging materials.

JGSPC started commercial operations in 1998 and is the first and only integrated polyethylene and polypropylene resin manufacturer in the country. Its plant is located in Batangas and is highly integrated, having its own power plant, a jetty for receiving raw materials, and de-mineralized water treatment facility.

Last July, Linde Philippines, a member of The Linde Group, announced that it had been awarded a contract by JGSPC to install and operate nitrogen and hydrogen on-site plants to support JG Summit’s petrochemical plant and the installation of the first naphtha cracker plant in the country. Linde’s total investment of P630 million for these facilities will further consolidate its position as the leading industrial gas supplier in the country.

Linde Philippines managing director Tristan Dumlao said JG Summit’s watershed project is expected to provide a boost to the petrochemical industry in the Philippines and contribute to further growth in the national economy.

For his part, Rob Hughes, cluster head responsible for Linde’s businesses in Korea and the Philippines said: “This latest investment is reflective of The Linde Group’s commitment to grow its business in the Philippines, which we see as an attractive investment destination given its strong growth prospects. We look forward to a successful long term partnership with JG Summit Petrochemical as it moves forward with its growth plans.”

Meanwhile, Gokongwei said that by investing to build the first naphtha cracker plant in the country, JG Summit will have a steady source of olefins for its petrochemical plants.

 “It will also be able to supply other plants which are presently relying on imports to sustain their local operations,” he added.

In January, Linde Philippines brought onstream its new 24 tons per day carbon dioxide plant in Balamban, Cebu month P205 million. The company is also investing P95 million to install a nitrogen generator in Muntinlupa City to meet additional demand.