On the back of a surge in petrochemicals end-markets, the Philippines JG Summit Holdings is preparing for a major expansion of its recently established petrochemicals complex, which is running at 95-100% capacity. The new production streams will add value to basic chemicals and provide opportunities for greater diversification in the industry. Nevertheless, development is unlikely before 2020 and the country will increasingly rely on imports of polymers and synthetic rubber over the next five years.
The petrochemicals industry witnessed a downturn in output revenue in Q116 with the value of basic chemicals output falling 16.4% y-o-y and rubber declining 8.2%, although plastic grew 35.7%. Much of this loss was due to a decline in prices. While average monthly chemicals output volume growth was up 48% y-o-y according to official statistics, much of this was concentrated in January when growth reached 312. In the following months growth was about 4% and indices were well down on the record levels reported in Q416. Plastic and rubber volumes grew 34.9% y-o-y, indicating that output was holding up even as prices were falling. Much of the growth was generated by the plastic sector, although there was a modest growth in volumes in the rubber segment.
JG Summit is planning the expansion of its basic petrochemicals complex, using the process technologies of Lummus/BASF for butadiene extraction and of GTC Technology for benzene-toluene-xylene (BTX) extraction. The company is expected to produce around 160,000-170,000 tonnes per annum (tpa) of combined BTX, and 80,000-90,000 tonnes of butadiene after the expansion of its cracker from 320,000tpa of ethylene to 500,000tpa. As well as producing olefins for downstream polymer operations, the cracker also yields about 280,000tpa of pyrolysis gasoline (pygas) and 110,000-120,000tpa of mixed C4, from which BTX and butadiene can be extracted. At the end of the cracker's expansion, its pygas yield will increase to about 300,00tpa, while its mixed C4 output will rise to about 200,000-210,000tpa.
The Philippines' Petrochemicals Risk/Reward Index (RRI) has been revised down 0.3 points this quarter due to a 2.4 points decline in its Country Risk rating, although this is partly offset by a 2.0 points improvement in its market risk rating. The country enjoys positive scores for market risk, and recent growth in capacity has bolstered its potential for further downstream diversification. The Philippines has a supportive business environment in which the petrochemicals industry can grow. It lies behind Indonesia and ahead of Vietnam in the Asia Petrochemicals RRI ranking.
The Philippines Petrochemicals Report has been researched at source, and features BMI Research's market assessment and independent forecasts for key petrochemicals sub-sectors. The report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing companies by products and services, sales, market share, investments, projects, partners and expansion strategies.
BMI's Philippines Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Philippine petrochemicals industry.
- Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the Philippine petrochemicals market.
- Target business opportunities and risks in the Philippine petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Philippines.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis, covering the petrochemicals markets, regulatory changes, major investments, projects and company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the petrochemicals sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:
- Energy: Oil production (‘000 b/d), oil consumption (‘000 b/d), net oil exports (‘000 b/d), gas production (bcm), gas consumption (bcm), net gas exports (bcm), oil refinery capacity (‘000 b/d).
- Petrochemicals: Ethylene capacity (‘000 tpa), ethylene production (‘000 tpa), ethylene consumption (‘000 tpa), polyethylene capacity (‘000 tpa), polypropylene capacity (‘000 tpa), polyvinyl chloride capacity (‘000 tpa), polyolefins consumption (‘000 tpa).
- Oil Products Prices: Price forecasts for all major oil-based products (USD/bbl) at major global energy trading hubs.
- Economic: Nominal GDP (USDbn), real GDP growth (%), GDP per capita (USD), population (mn), unemployment (%), exchange rate (against USD).
BMI’s Petrochemicals Risk Reward Index
BMI’s Risk Reward Indices provide investors (both corporate and financial) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Structure, size and value of the industry sector; overview of the industry landscape and key players; assessment of the business operating environment and the latest regulatory developments.
Industry Trends & Developments
Evaluation of company and sector-wide developments, including key projects (as well as expansion plans), latest company financial details and proposed international ventures.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Global & Regional Market Overview
Analysis of the key trends driving the global industry, including worldwide output/capacity and demand analysis across ethylene, polyethylene, polyvinyl chloride, polystyrene, polyethylene terephthalate and polypropylene. The regional analysis looks at the implications of local and global trends on specific company activity.
Sub-sectors covered by the Petrochemicals Reports include:
Oil & Gas, Oil Refining, Olefins (ethylene, propylene), Polyolefins (polyethylene, polypropylene), Polyvinyl Chloride, Polystyrene
Please note – not all country Reports cover all sub-sectors – see website for details.
The Petrochemicals Market Reports are based on a network of primary sources, such as multilateral organisations (ACC, APLA, Cefi c, ICCA, ICMA), national chambers of commerce and industry, national statistical offi ces, government ministries and central banks, and multinational companies.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.