MANILA, Philippines - JG Summit Holdings Inc., the holding company of tycoon John Gokongwei, will raise its investment on the first ever naphtha cracker plant in the country $500 million to $600 million.
Board of Investments (BOI) Managing Head Cristino L. Panlilio said the opening of the plant will lessen the dependence of the country to imported plastic. “The manufacturing of plastic will be facilitated, thus making it cheaper.”
“We can compete head on with China the minute we have the naphtha cracker plant in place,” Panlilio said. The plant is scheduled to begin operations next year.
JG Summit Oleofins Corp. is applying for registration with the BOI as a new producer of polymer-grade ethylene and propylene, pyrolysis gas and byproducts such as fuel gas, fuel oil, and acid gas at an annual capacity of 925,537 metric tons on a pioneer status in Barangay Simlong, Batangas City.
Panlilio said that the long delayed project will finally begin next year. “Construction will start in January,” he said.
Lance Gokongwei, president and chief executive of JG Summit, visited Panlilio at the BOI to discuss the project. Panlilio said Gokongwei has asked the government for incentives for their project.
In an earlier report, Gokongwei said they will be investing $30 million for the design and site development of the naphtha cracker. He said the project, which would be undertaken by wholly-owned subsidiary, JG Summit Olefins, would cost less than the original P34.38 billion two years ago when it sought registration with the BOI.
In May 2008, the BOI approved the revised 2005 application of JG Summit Olefins (formerly JG Summit Petrochemical Corp.) to establish a naphtha cracker plant at a cost of P34.38 billion from the original P25.6 billion.
The plant was supposed to begin commercial operations in January 2012, four years behind their original target of 2008. Gokongwei said the project was delayed because of the financial crisis that hit most companies worldwide.
A naphtha cracker plant uses a “cracking process” to produce ethylene from naphtha. It is an upstream petrochemical manufacturing activity.