Resins Industry
Resins Industry
Resins Industry
Ironically, the Philippines has no enough ethylene plants upstream and relies on
imports for all supplies of the raw material. JG Summit intends to rectify this situation by
bringing onstream a 350,000- tpy ethylene plant in 2001, but before that plans to
expand its LDPE capacity by 100,000 tpy. Rival NPC Alliance Corp. (Bataan
Polyethylene) broke ground last year for a 250,000-tpy swing LDPE/HDPE facility
targeted for completion in the latter half of 1999. Also PEMA Plastic Mfg. Corp. is a
manufacturer of LDPE, HDPE resins. This company, funded by Sumitomo & Co. and
others, also finished construction of an upstream ethylene plant in 2001.
The Philippine plastic industry is relatively young which grew only in mid-1960’s
with the arrival of technology for injection, extrusion, and blow molding. Plastic pipe
production began in 1970s with increased demand for the product as inputs for the
government’s waterworks projects. Two companies set up the first two plants in the
Philippines, these are Mabuhay Vinyl Corporation , put up the first synthetic
thermoplastic and resin plant in Mindanao. Vinyl Consortium established a plant with an
annual capacity of 18,000 metric tons for the production of Vinyl Chloride Monomer
(VCM). Both of these companies supplied inputs to other manufacturers for the
manufacture of plastic pipes, footwear, packaging and calendaring items.
Subsectors of the Plastic Industry /Channel of Distribution :
Upstream Industries
Midstream Industries
Downstream industries
Resins Percent
Polymer
Imported
Polyethylene 50%
Polypropylene 25%
Polyvinylchloride 20%
Polystyrene 5%
Only polyethylene and polypropylene are produced locally as of the year 2008.
The remaining 50% of polyethylene inputs are imported. Meanwhile, the main products
for the plastic industry includes Polybags (woven sacks, regular film bags, PVC pipes,
Industrial crates, bottles and housewares). Hence, the main markets of plastics include
the manufacturers and producers of sugar and rice, millers and supermarkets,
contractors, hardwares, restaurants, fish dealers, bakeries, soft drink manufactures,
cosmetics, health care, food and pharmaceutical industries and consumers, wholesalers
and retailers.
3912 Cellulose of
chemicals 19.389 15.702
USA 11.638 7.345
Germany 1.390 1.653
China 1.126 0.976
Netherlands 0.922 0.997
Sweden 0.707 1.316
Thailand* 0.330 0.175
Others 3.276 3.240
Based on the Philippine Trade Statistics, the country imported a total amount of
Plastic resins amounting to US$948.386 million in 2009 a decreased of 35.40%
compared in 2008 which totaled to US$1,284.097 million. The country imported mostly
raw materials of plastics since there are no domestic factories of such products. Top
imported raw materials of plastics resin in 2009 which include ethylene which amounts
to US$126.166 million, polyether, expoxide at US$ 104.379 million, other olefin primary
at US74.492 million , silicone, primary form at US$66.701 million, self adhesive
materials at US$56.431 million. On the other hand, the finished plastic materials that
the Philippines imported were box, bag, closures at US$89.979 million, plate and
sheets at US$83.645 million, tube, pipes and hoses at US$38.808 million and tableware
and houseware at US$20.925 million.
In the middle of economic crisis suffered by the world recently, the business
climate in the plastic raw material industry and plastic industry in the Philippines are
facing a serious challenge. Plastic raw material industry is influence by the fluctuation of
global crude oil price. As a result, the price of naphtha as the raw material of olefin
industry (ethylene and propylene) is not stable. The other red tape is the unbalance
between supply and demand, so it encouraged the increase of plastic raw material
price, such as PE resin and PP resin.
When the global crude oil price was increased to reach US$ 141 per barrel by
the middle of 2008, the price of both commodities was increased to reach US$ 2,000
per ton. In September 2008, global crude oil price was decreased to a level of US$
109.73 per barrel, PE and PP plastic raw material price was decreased to become US$
1,600 – US$ 1,650 per ton. In January 2009, the global oil price was fell to the lowest
level of about US$ 41.96 per barrel, the price of PE and PP in the global market was still
at the level between US$ 790 – US$ 850 per ton. The result of plastic raw material price
movement, which was becoming anomaly (a situation that deviates from the normal
condition), local upstream petrochemical industry was becoming sluggish. Some
producers had difficulty in increasing production. For example, PT Polytama Propindo
has not the courage to increase their production, because they are waiting for the price
improvement.
PHILIPPINE ANNUAL DEMAND AND SUPPLY OF LDPE RESINS/PELLETS
Philippine Demand
Year Tons
2000 262,593
2001 267,651
2002 279,602
2003 269,949
2004 272,401
2005 274,984
2006 265,111
2007 272,820
2008 270,972
2009 269,634
Philippine Supply
Year Tons
2000 250,322
2001 249,462
2002 247,562
2003 247,321
2004 244,765
2005 234,990
2006 233,989
2007 231,987
2008 229,871
2009 229,678