Philippines cracker – revival of an epic saga

By Malini Hariharan

Some projects never die.

JG Summit has been planning a cracker since 1995 but has always had problems in securing funding. The project was revived in 2005 even as questions were raised about its viability.

It would help JG Summit secure feedstock for its polyethylene and polypropylene plants, but how would it compete with larger well-established players in Singapore and Thailand, especially after the implementation of the Asean FTA from 1 January 2010 when import tariffs would fall to zero.

The market meltdown in the second half of 2008 had pushed the project to the back burner. But with economic recovery the project has once again reappeared.

JG Summit says that it is close to receiving funding from the Export-Import Bank of Korea for a 320,000 tonnes/year cracke at Bataangas.

Lance Gokongwei, president of JG Summit Holdings told reporters in Manila this week that the company was pushing ahead with the estimated $731m project. “We expect to operate the plant in 2013,” he said.

Gokongwei said JG Summit had already signed an agreement with Lumus for technology and site and design development would start in March 2010.

“If the financing package from the Korea Eximbank is completed by May to August next year then the project is a sure go,” Gokongwei said.

“If we can’t get the financing, we will have to assess. The fallback is we wait for the right time,” he added.

That sounds familiar.

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