MANILA, Philippines (UPDATED) - South Korea's Daelim Industrial Co Ltd said in a regulatory filing on Friday that it had signed a 345.3 billion won ($317 million) deal to build a petrochemical plant in Limay, Bataan.
Daelim said it would complete the plant by November under a deal with Petron, the Philippines' largest oil refining firm.
Petron Corp, which has a refinery and soon, an oil depot, in Limay has been making moves to enter the petrochemical market to complement its presence in the petroleum market.
Bataan hosts a petrochemical industrial estate, which has been envisioned to house the first world-class petroleum complex in the Philippines.
Petrochem in Philippines
The Philippines is one of the few among ASEAN countries without an integrated petrochemical industry.
In the Asia Petrochemicals Business Environment Rankings matrix of research firm Business Monitor International (BMI), the Philippines comes 11th out of 12 countries, with 39.3 points. This puts it 7.1 points behind Indonesia and 8.8 points ahead of Vietnam.
"The Philippines petrochemicals sector suffers from a lack of locally available feedstock and a relatively small and inefficient local polymers manufacturing base, which is incapable of supplying the plastics industry. If announced plans for petrochemicals expansion come to fruition, the country could climb up the rankings, but it is unlikely to exceed India’s score," according to BMI's "Philippines Petrochemicals Report Q1 2011"
"Nevertheless, the Philippines has a supportive business environment in which the petrochemicals industry can grow," it added.
Currently, the Philippines' petrochemicals industry is dependent on ethylene imports, thus is vulnerable to external factors, particularly exchange rate fluctuations, BMI said.
JG Summit Petrochemical Corporation, a unit of the Gokongwei-led holding company, has a petrochem plant in Brgy. Simlong in Batangas, about 125 km south of Manila. This joint venture between JG Summit Holdings Inc. and Marubeni Corp manufactures and supplies polyolefin products in the Philippines.
Limay lies along the Manila Bay side of Batan province. - with Reuters, Agence France-Presse