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Philippines Petrochemicals Report Q1 2013
Business Monitor International, January 2013, Pages: 58
BMI's Philippines petrochemicals report assesses the trends in the local market and their impact on imports. It also examines recent developments in olefins feedstock capacity and the implications for longterm industry growth.
BMI estimates that the value of chemicals production increased just 0.5% in 2012, while the value of plastics production surged 11%. However, the value of rubber production plunged 7.4%. Chemicals output was up 0.6%, plastics was up 7.0% and rubber was up 5.5%. Chemicals output performance was worse than the 1.0% growth BMI anticipated. A downturn in external markets coupled with a strong peso militated against growth in domestic chemicals production, although the plastics sector was able to buck the trend.
One of the key consumers of petrochemicals products is the automotive industry, but this sector is gradually losing out owing to rising production costs, more competitive regional rivals and the relatively small size of the domestic market, all of which could prompt existing carmakers to shutter their Philippines-based production units. This could hit the Philippines' consumption of engineering plastics and rubber, although polyvinyl chloride (PVC) will be among those segments that will benefit from 6
%growth in the construction sector.
Greater competition with foreign resins producers as a result of trade liberalisation could hamper the recovery in the output of upstream petrochemicals producers. However, the development of dynamic and growing local petrochemicals-consuming industries can only improve the business climate over the long term, with the potential for increased investment in capacity.
Key developments in the sector include:
- Despite the challenging short-term environment, JG Summit Holdings has revived its plan to build the country's first naphtha cracker plant with 320,000 tonnes per annum (tpa) ethylene and 189,000tpa propylene capacity by 2014. This is to result in the full utilisation of the company's polypropylene (PP) plant with a capacity of 185,000tpa, and increase the capacity of its polyethylene (PE) plant to 300,000tpa.
- Petron is proceeding with its plans to upgrade its refinery to include a fluid catalytic cracker
(FCC), with PP production capacity of 250,000tpa, from 2014. The production of speciality chemicals and PP is likely to expand as Petron sets up new petrochemicals plants in the country.
- In BMI's Asia Petrochemicals Risk/Reward Ratings (RRRs), the Philippines ranks last out of 12 countries, scoring 39.6 points.
Executive Summary 5
SWOT Analysis 7
Philippines Petrochemicals Industry SWOT 7
Philippines Political SWOT 7
Philippines Economic SWOT 8
Philippines Business Environment SWOT 9
Global Petrochemicals Overview 10
Global Oil Products Price Outlook 14
Table: BMI's Refined Products Forecasts, 2010-2016 15
Table: Middle East Outperforms In Terms of Passenger Growth 19
Emerging Asia Petrochemicals Overview 24
Philippines Market Overview 28
Industry Trends And Developments 29
Petrochemicals Risk/Reward Ratings 31
Asia Petrochemicals Risk/Reward Ratings 31
Table: Asia Petrochemicals Business Environment Ratings 33
Philippines Petrochemicals Risk/Reward Ratings 33
Forecast Scenario 35
Petrochemicals Forecasts 35
Table: Philippines' Petrochemicals Sector, 2010-2017 ('000tpa, unless otherwise stated), 2010-2017 37
Macroeconomic Forecast 38
Table: Philippines - Economic Activity, 2011-2016 41
Company Monitor 42
BASF Philippines 42
JG Summit Petrochemicals Corp 43
Petron Corporation 45
Glossary of Terms 48
Table: Glossary Of Petrochemicals Terms 48
Country Snapshot 49
Table: Philippines' Population By Age Group, 1990-2020 ('000) 50
Table: Philippines' Population By Age Group, 1990-2020 (% of total) 51
Table: Philippines' Key Population Ratios, 1990-2020 52
Table: Philippines' Rural And Urban Population, 1990-2020 52
BMI Methodology 53
How We Generate Our Industry Forecasts 53
Chemicals and Petrochemicals Industry 53
Cross Checks 54
Risk/Reward Ratings 55
Table: Petrochemicals Business Environment Indicators And Rationale 56
Table: Weighting Of Indicators 57
JG Summit Petrochemicals Corp