Resin Industry (PHILIPPINES) Resin Industry (PHILIPPINES)
The Philippines' producer of PE (LDPE, HDPE) resins, JG Summit The Philippines' producer of PE (LDPE, HDPE) resins, JG Summit Petrochemical, is a joint venture between Marubeni and local conglomerate Gokongwei. Petrochemical, is a joint venture between Marubeni and local conglomerate Gokongwei. The venture began producing PE just this year after finishing construction in the second The venture began producing PE just this year after finishing construction in the second half of last year of a 200,000-tpy swing L-LDPE/HDPE facility.
half of last year of a 200,000-tpy swing L-LDPE/HDPE facility.
Ironically, the Philippines has no enough ethylene plants upstream and relies on 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 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 bringing onstream a 350,000- tpy ethylene plant in 2001, but before that plans to expand i
expand its LDPE ts LDPE capacity capacity by 100by 100,000 tpy. ,000 tpy. Rival NPC Rival NPC Alliance Corp. Alliance Corp. (Bataan(Bataan Polyethylene) broke ground last year for a 250,000-tpy swing LDPE/HDPE facility 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 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 manufacturer of LDPE, HDPE resins. This company, funded by Sumitomo & Co. and others, also finished construction of an upstream ethylene plant in 2001.
others, also finished construction of an upstream ethylene plant in 2001.
The Philippine plastic industry is relatively young which grew only in
mid-The Philippine plastic industry is relatively young which grew only in mid-1960’s1960’s
with the ar
with the arrival of rival of technology for technology for injection, extinjection, extrusion, and blow rusion, and blow molding. molding. Plastic Plastic pipepipe production began in 1970s with increased demand for the product as inputs for the production began in 1970s with increased demand for the product as inputs for the
government’s w
government’s waterworks projects. aterworks projects. Two comTwo companies set panies set up the up the f f irst two plants in theirst two plants in the Philippines, these are Mabuhay Vinyl Corporation , put up the first synthetic Philippines, these are Mabuhay Vinyl Corporation , put up the first synthetic thermoplastic and resin plant
thermoplastic and resin plant in Mindanao. in Mindanao. Vinyl Consortium Vinyl Consortium established a plant with anestablished a plant with an annual capacity of 18,000 metric tons for the production of Vinyl Chloride Monomer annual capacity of 18,000 metric tons for the production of Vinyl Chloride Monomer (VCM).
(VCM). Both of Both of these comthese companies supplied panies supplied inputs to inputs to other mother manufacturers for anufacturers for thethe manufacture of plastic pipes, fo
Subsectors of the Plastic Industry /Channel of Distribution : Subsectors of the Plastic Industry /Channel of Distribution :
Consumption of the Plastic Resins Industry Consumption of the Plastic Resins Industry
Polymer
Polymer Resins PercentResins Percent Imported Imported Polyethylene 50% Polyethylene 50% Polypropylene 25% Polypropylene 25% Polyvinylchloride 20% Polyvinylchloride 20% Polystyrene 5% Polystyrene 5%
Only polyethylene and polypropylene are produced locally as of the year 2008. Only polyethylene and polypropylene are produced locally as of the year 2008. The remaining 50%
The remaining 50% of polyethylene inputs arof polyethylene inputs are imported. e imported. Meanwhile, the mMeanwhile, the main productsain products for the plastic industry includes Polybags (woven sacks, regular film bags, PVC pipes, for the plastic industry includes Polybags (woven sacks, regular film bags, PVC pipes, Industrial crates, bott
Industrial crates, bottles and housewares). les and housewares). Hence, the mHence, the main markets of ain markets of plastics includeplastics include the manufacturers and producers of sugar and rice, millers and supermarkets, the manufacturers and producers of sugar and rice, millers and supermarkets,
Upstream Industries Upstream Industries
Extraction of
Extraction of the the following following elements elements from from petroleumpetroleum
Midstream Industries Midstream Industries
Processing of ethylene and propylene to yield Processing of ethylene and propylene to yield synthetic
synthetic resins, polyvinyl cresins, polyvinyl chloride (PVC), hloride (PVC), polystyrenepolystyrene (PS), polypropylene (PP), polyethylene (PE) (PS), polypropylene (PP), polyethylene (PE)
Downstream industries Downstream industries
Processing of synthetic resins to make finished and Processing of synthetic resins to make finished and
semifinished plastic products semifinished plastic products
contractors, hardwares, restaurants, fish dealers, bakeries, soft drink manufactures, contractors, hardwares, restaurants, fish dealers, bakeries, soft drink manufactures, cosmetics, health care, food and pharmaceutical industries and consumers, wholesalers cosmetics, health care, food and pharmaceutical industries and consumers, wholesalers and retailers.
and retailers.
The demand determinants vary depending on the market. Industrial clients The demand determinants vary depending on the market. Industrial clients mainly look for
mainly look for quality rather quality rather than price. than price. For the mFor the mass consumer market, ass consumer market, price is aprice is a critical factor.
critical factor.
Philippine Trade Statistics of Plastic Resins Philippine Trade Statistics of Plastic Resins
Philippine Top Imports of Plastic Resins Corresponding Top 5 Countries Philippine Top Imports of Plastic Resins Corresponding Top 5 Countries
Value
Value – – Millions of US$Millions of US$ H.S.
H.S. Code Code ProductProduct Description/Top 5 Description/Top 5
Countries
Countries 2009 2009 20082008 3901
3901 Ethylene, Ethylene, PrimaryPrimary form form Singapore Singapore Korea Korea Thailand Thailand Japan Japan Malaysia Malaysia Others Others 126.167 126.167 42.818 42.818 16.994 16.994 12.881 12.881 11.821 11.821 10.342 10.342 31.31 31.31 173.660 173.660 37.944 37.944 20.247 20.247 21.386 21.386 14.047 14.047 15.830 15.830 64.206 64.206 3907 Polyether, 3907 Polyether, Expoxide Expoxide Singapore Singapore Taiwan Taiwan Indonesia Indonesia 104.379 104.379 22.709 22.709 21.198 21.198 14.961 14.961 14.515 14.515 155.903 155.903 34.410 34.410 34.282 34.282 11.383 11.383 12.237 12.237
Thailand Thailand Japan Japan Others Others 10.641 10.641 20.355 20.355 24.907 24.907 38.684 38.684 3923
3923 Box, Box, Bag,Bag, Closures, etc. Closures, etc. Thailand Thailand China China Japan Japan Malaysia Malaysia Hongkong Hongkong Others Others 89.979 89.979 16.542 16.542 14.901 14.901 11.678 11.678 7.832 7.832 7.712 7.712 31.314 31.314 87.975 87.975 12.493 12.493 13.217 13.217 7.123 7.123 11.397 11.397 10.270 10.270 33.475 33.475 3920
3920 Plate, Plate, Sheet Sheet andand Cell Cell Korea Korea Malaysia Malaysia Japan Japan Indonesia Indonesia USA USA Others Others 83.645 83.645 13.081 13.081 12.607 12.607 10.006 10.006 9.493 9.493 8.704 8.704 29.754 29.754 101.515 101.515 12.149 12.149 10.745 10.745 10.935 10.935 13.072 13.072 9.615 9.615 44.999 44.999 3902
3902 Other Other OlefinOlefin Primary Primary Singapore Singapore Korea Korea Thailand Thailand 74.492 74.492 22.245 22.245 16.401 16.401 9.008 9.008 167.810 167.810 40.155 40.155 25.579 25.579 17.084 17.084
Japan Japan Taiwan Taiwan Others Others 7.929 7.929 4.172 4.172 14.737 14.737 11.817 11.817 26.541 26.541 46.634 46.634 3921
3921 Other Other Plate Plate andand Sheets Sheets Japan Japan Malaysia Malaysia USA USA Thailand Thailand Indonesia Indonesia Others Others 69.394 69.394 18.110 18.110 17.811 17.811 11.878 11.878 3.492 3.492 3.272 3.272 14.831 14.831 76.763 76.763 15.659 15.659 19.085 19.085 11.874 11.874 3.276 3.276 6.339 6.339 20.530 20.530 3910
3910 Silicone, Silicone, PrimaryPrimary form form Korea Korea Japan Japan Norway Norway USA USA Thailand Thailand Others Others 66.701 66.701 34.294 34.294 12.536 12.536 5.361 5.361 3.877 3.877 3.232 3.232 7.401 7.401 102.195 102.195 46.236 46.236 38.913 38.913 0.527 0.527 4.110 4.110 2.780 2.780 9.630 9.630 3919
3919 Self Self AdhesiveAdhesive Materials Materials Japan Japan Korea Korea China China Malaysia Malaysia Singapore Singapore Thailand* Thailand* Other Other 56.431 56.431 19.731 19.731 6.847 6.847 5.159 5.159 4.347 4.347 3.823 3.823 2.806 2.806 13.718 13.718 68.692 68.692 21.922 21.922 6.711 6.711 5.813 5.813 5.579 5.579 6.666 6.666 2.991 2.991 19.090 19.090
3926
3926 Other Other articles articles ofof Plastics Plastics China China Hongkong Hongkong Japan Japan Thailand Thailand USA USA Others Others 52.826 52.826 10.076 10.076 7.836 7.836 6.584 6.584 5.438 5.438 3.897 3.897 18.995 18.995 69.988 69.988 11.405 11.405 16.778 16.778 6.554 6.554 6.482 6.482 4.098 4.098 24.671 24.671 3917
3917 Tube, Tube, pipe, pipe, hoseshoses and fit and fit Spain Spain USA USA Japan Japan China China Germany Germany Thailand* Thailand* Others Others 38.808 38.808 12.763 12.763 9.331 9.331 7.815 7.815 2.690 2.690 1.240 1.240 0.284 0.284 4.685 4.685 44.030 44.030 21.346 21.346 5.646 5.646 7.062 7.062 2.906 2.906 1.721 1.721 0.301 0.301 5.048 5.048 3906
3906 Acrylic Acrylic PolymersPolymers
Japan Japan Taiwan Taiwan Singapore Singapore Thailand Thailand Indonesia Indonesia Others Others 29.550 29.550 7.948 7.948 6.628 6.628 5.304 5.304 2.207 2.207 1.750 1.750 5.173 5.173 27.857 27.857 4.877 4.877 5.838 5.838 4.436 4.436 2.633 2.633 2.168 2.168 7.455 7.455 3903
3903 Styrene, Styrene, PrimaryPrimary
Forms 29.652 52.861
Korea Korea Taiwan Taiwan Malaysia Malaysia Japan Japan Thailand Thailand Others Others 9.131 9.131 4.949 4.949 3.735 3.735 2.455 2.455 1.635 1.635 7.747 7.747 15.453 15.453 8.899 8.899 9.315 9.315 6.164 6.164 3.112 3.112 9.918 9.918 3909 Amino-Resin, 3909 Amino-Resin, Primary Form Primary Form Singapore Singapore Malaysia Malaysia Japan Japan Thailand Thailand India India Others Others 25.250 25.250 9.406 9.406 3.507 3.507 2.403 2.403 2.077 2.077 1.192 1.192 6.665 6.665 38.945 38.945 13.804 13.804 4.518 4.518 4.790 4.790 2.513 2.513 2.620 2.620 10.700 10.700 3924
3924 Tableware Tableware andand household of household of plastics plastics China China USA USA Korea Korea Malaysia Malaysia Thailand Thailand Others Others 20.925 20.925 12.100 12.100 1.469 1.469 1.461 1.461 1.374 1.374 1.324 1.324 31.970 31.970 18.896 18.896 9.615 9.615 1.526 1.526 0.841 0.841 1.331 1.331 1.700 1.700 3.883 3.883 3912 3912 Cellulose Cellulose ofof chemicals chemicals 19.389 19.389 15.70215.702
USA USA Germany Germany China China Netherlands Netherlands Sweden Sweden Thailand* Thailand* Others Others 11.638 11.638 1.390 1.390 1.126 1.126 0.922 0.922 0.707 0.707 0.330 0.330 3.276 3.276 7.345 7.345 1.653 1.653 0.976 0.976 0.997 0.997 1.316 1.316 0.175 0.175 3.240 3.240 3908 Polyamides 3908 Polyamides Korea Korea Thailand Thailand Singapore Singapore Japan Japan Taiwan Taiwan Others Others 9.588 9.588 2.899 2.899 1.627 1.627 1.225 1.225 1.224 1.224 1.118 1.118 1.495 1.495 11.485 11.485 3.064 3.064 1.652 1.652 2.782 2.782 0.852 0.852 0.915 0.915 2.220 2.220 3911
3911 Petro Petro Resins,Resins, primary form primary form Japan Japan China China USA USA Korea Korea Singapore Singapore Thailand* Thailand* Others Others 9.428 9.428 3.038 3.038 1.564 1.564 1.135 1.135 0.852 0.852 0.790 0.790 0.075 0.075 1.974 1.974 16.084 16.084 4.869 4.869 1.158 1.158 3.894 3.894 1.140 1.140 1.633 1.633 0.244 0.244 3.146 3.146 Source
Source : : National National Statistics Statistics Office Office and and World World AtlasAtlas
Based on the Philippine Trade Statistics, the country imported a total amount of 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% Plastic resins amounting to US$948.386 million in 2009 a decreased of 35.40%
compared in 2008 which t
compared in 2008 which totaled to US$1,284.otaled to US$1,284.097 million. 097 million. The country imThe country imported mostlyported mostly raw materials of plastics since there are no domestic factories of such products. Top 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 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 to US$126.166 million, polyether, expoxide at US$ 104.379 million, other olefin primary at US74.492
at US74.492 million , million , silicone, psilicone, primary forimary form rm at US$66.701 mat US$66.701 million, self illion, self adhesiveadhesive materials at US$56.431 m
materials at US$56.431 million. illion. On the other hand, On the other hand, the finished plastic the finished plastic materials thatmaterials that the Philippines
the Philippines imported were imported were box, bag, box, bag, closures at closures at US$89.979 mUS$89.979 million, plate illion, plate andand sheets at US$83.645 million, tube, pipes and hoses at US$38.808 million and tableware sheets at US$83.645 million, tube, pipes and hoses at US$38.808 million and tableware and houseware at US$20.925 million.
and houseware at US$20.925 million.
Meanwhile, top importing countries of resins (LDPE, HDPE) include Singapore, Meanwhile, top importing countries of resins (LDPE, HDPE) include Singapore, Thailand, Korea, Japan,
Thailand, Korea, Japan, USA and ChUSA and China. ina. However, the However, the major fmajor factors affecting supplyactors affecting supply and demand of resins to fluctuate or change because of fluctuating price of resins in the and demand of resins to fluctuate or change because of fluctuating price of resins in the market which
market which caused bcaused by the y the feedstock feedstock costs or racosts or raw material cow material costs, rail sts, rail congestion,congestion, imports, exports and new capacity, and unstable global crude oil prices which becomes imports, exports and new capacity, and unstable global crude oil prices which becomes expensive and since the major raw materials in production of resins are imported from expensive and since the major raw materials in production of resins are imported from abroad and prices are subject to currency changes, fluctuating currency has a negative abroad and prices are subject to currency changes, fluctuating currency has a negative effect on the downstream industry because of the limited purchasing power of their effect on the downstream industry because of the limited purchasing power of their market., most multinational such as Procter & Gamble and Colgate now outsource market., most multinational such as Procter & Gamble and Colgate now outsource manufacturing operations to Thailand, Vietnam and other countries with a cheaper cost manufacturing operations to Thailand, Vietnam and other countries with a cheaper cost of production.
of production. Wholesale clients Wholesale clients are dimare diminishing. As for inishing. As for the consumthe consumer market, er market, thethe downstream firms are having difficulty in managing their costs due to the limited budget downstream firms are having difficulty in managing their costs due to the limited budget of consumers.
of consumers.
In the middle of economic crisis suffered by the world recently, the business 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 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 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 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 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 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 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 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$ 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$ 109.73 per barrel, PE and PP plastic raw material price was decreased to become US$ 1,600
1,600 – – US$ 1,650 per ton. In January 2009, the global oil price was fell to the lowestUS$ 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 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
at the level between US$ 790 – – US$ 850 per ton. US$ 850 per ton. The result of plastic raw material priceThe result of plastic raw material price movement, which was becoming anomaly (a situation that deviates from the normal movement, which was becoming anomaly (a situation that deviates from the normal condition), local upstream petrochemical industry was becoming sluggish. Some condition), local upstream petrochemical industry was becoming sluggish. Some producers had difficulty in increasing production. For example, PT Polytama Propindo 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 has not the courage to increase their production, because they are waiting for the price improvement.
improvement.
PHILIPPINE ANNUAL DEMAND AND SUPPLY OF LDPE RESINS/PELLETS PHILIPPINE ANNUAL DEMAND AND SUPPLY OF LDPE RESINS/PELLETS
Philippine Demand Philippine Demand Year
Year TonsTons
2000 262,593 2000 262,593 2001 267,651 2001 267,651 2002 279,602 2002 279,602 2003 269,949 2003 269,949 2004 272,401 2004 272,401 2005 274,984 2005 274,984 2006 265,111 2006 265,111 2007 272,820 2007 272,820 2008 270,972 2008 270,972 2009 269,634 2009 269,634 Philippine Supply Philippine Supply Year
Year TonsTons
2000 250,322 2000 250,322 2001 249,462 2001 249,462 2002 247,562 2002 247,562 2003 247,321 2003 247,321 2004 244,765 2004 244,765 2005 234,990 2005 234,990 2006 233,989 2006 233,989 2007 231,987 2007 231,987 2008 229,871 2008 229,871 2009 229,678 2009 229,678 SOURCE:
SOURCE: National Statistics Office Data National Statistics Office Data
Philippine Plastics Industry Association Data Philippine Plastics Industry Association Data
