JG Summit to provide power for its naphtha cracker plant

MANILA, Philippines - Gokongwei owned JG Summit Oleofins Corp. will be building a four-megawatt power generation plant to supply energy for its P33 billion naphtha cracker plant in the country.

In an interview, BOI executive director Lucita P. Reyes said that the power plant will be for the sole use of JG Summit.

The naphtha cracker project will be receiving income tax holiday (ITH) from the government because it is the first ever of its kind in the Philippines. The power plant on the other hand will also get incentives in the form of zero duty importation of capital equipment.

Reyes said it is important to have our own naphtha cracker plant because we are already lagging behind our neighbors. Thailand has nine, Singapore has five, Malaysia has seven, Indonesia has two and even Vietnam has one.

This project has long been in the pipeline but it got pushed back because of capital problems. Now, Reyes said that the project will be funded mostly by equity because JG is awashed with cash following its listing in the local bourse.

Meanwhile, BOI managing head Cristino L. Panlilio said that the opening of the plant will lessen the dependence of the Philippines to imported plastic. “The manufacturing of plastic will be facilitated thus making it cheaper,” Panlilio said.

“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 registered with the BOI as a new producer of polymer-grade ethylene and propylene, pyrolysis gas and by products 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 in order to discuss the project. Panlilio said that Gokongwei has asked the government for incentives for their project.