Philippines Petrochemicals Report Q3 2009

Publication Date	June 2009
Publisher	Business Monitor
Product Type	Report
Pages	67
ISBN Number	1749-2386
Product Code	BMI02614

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Summary

The Philippines' downstream producers are reporting increased profitability as a result of falling crude prices and improved refinery margins, but a drop in demand is leading to a decline in petrochemicals revenues, according to BMI's latest Philippines Petrochemicals Report.

Oil and petrochemicals producer Petron's net profit grew by 33% year-on-year (y-o-y) in Q109 to PHP658mn. This was despite a 42% y-o-y drop in revenues to PHP34.65bn due to falling demand for oil and lower prices. The company explained that greater price stability enabled it to return to profitability after a year of reduced or negative margins caused by soaring crude prices. The net profit in Q109 was a turnaround from the PHP3.9bn (US$80.77mn) net loss it reported in 2008 due to the extreme volatility of oil prices related to the global economic crisis. However, as the company looked to generate new revenues, a number of new petrochemical projects came on stream in 2008. These included a fluidised catalytic cracking unit and a propylene recovery unit.

JG Summit Holdings reported a Q109 net profit of PHP864mn, a 28% y-o-y increase, but revenues from its petrochemicals business fell by 35.3% y-o-y to PHP1.3bn, the result of a 36% fall in sales volume to just under 20,000 tonnes.

A number of new projects are set to raise the Philippines' petrochemicals production capacity over the next five years. In April 2009, Petron restarted its 19,000b/d Petro Fluidised Catalytic Cracking Unit (PetroFCC) and 140,000tpa Propylene Recovery Unit (PRU) at its Limay petrochemical plant. The units were started up in April 2008 and formed the first phase of Petron's 'Refinery Master Plan'. The plant has been shut since December 2008 for a scheduled maintenance turnaround. Also in April 2009, Petron started the commercial operation of its benzene, toluene and mixed xylene (BTX) unit at the site. It has the capacity to produce 22,800tpa of benzene, 150,000tpa of toluene and 220,000tpa of mixed xylene.

In 2008, the Philippines had capacities of 375,000tpa LLDPE, 100,000tpa HDPE, 340,000tpa PP (including Petrocorp's 160,000tpa PP plant which is not operational) and 100,000tpa PVC. According to the National Statistics Office's volume of production index (VoPI), plastic output grew strongly in the first half of 2008, but tailed off towards the end of the year.

Content

Executive Summary
SWOT Analysis
Philippines Petrochemicals Industry SWOT
Philippines Political SWOT
Philippines Economic SWOT
Philippines Business Environment SWOT
Global Market Overview
Global Ethylene Capacities
Polypropylene
Quarterly Oil Products Price Outlook
Emerging Asia Petrochemicals Overview
Philippines Market Overview
Market Structure
Petrochemicals Business Environment
Limits Of Potential Returns
Risks To Realisation Of Returns
The Philippines Business Environment Outlook
Institutions
Infrastructure
Market Orientation
Tax Regime
Operational Risk
Foreign Direct Investment And Trade Relations
Industry Trends And Developments
Upstream
Financial Results
Industry Forecast Scenario
Macroeconomic Outlook
Company Monitor
BASF Philippines
Dow Chemical Philippines
Bataan Polyethylene Corporation
Tosoh
JG Summit Petrochemicals Corp
PNOC Petrochemical Development
Petron Corporation
Country Snapshot: Philippines Demographic Data
Section 1: Population
Section 2: Education And Healthcare
Section 3: Labour Market And Spending Power
BMI Forecast Modelling
How We Generate Our Industry Forecasts
Chemicals And Petrochemicals Industry
Cross Checks
Business Environment Ratings
Weighting
List of Tables
- Table: World Ethylene Production By Country, 2008 And 2012 ('000 Tonnes Capacity)
- Table: Oil Product Price Assumptions, Q408-Q409 (US$/bbl)
- Table: Oil Product Price Forecasts, 2006-2013 (US$/bbl)
- Table: Asian Ethylene Projects
- Table: Value Of Net Sales Growth By Segment, 2008 (% y-o-y)
- Table: Production Capacity Utilisation By Segment, 2008 (%)
- Table: Asia Pacific Petrochemicals Business Environment Ratings
- Table: BMI'S Business And Operational Risk Ratings
- Table: BMI's Legal Framework Ratings
- Table: Labour Force Quality
- Table: Asia's FDI Annual Inflows, 2006-2007
- Table: Philippines' Top Export Destinations, 2001-2007 (US$mn)
- Table: BMI's Asia Pacific Trade Ratings
- Table: Philippines' Petrochemicals Sector, 2006-2013
- Table: Philippines - Economic Activity, 2006-2013
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2030
- Table: Education, 2002-2005
- Table: Vital Statistics, 2005-2030
- Table: Employment Indicators, 2001-2006
- Table: Consumer Expenditure, 2007-2012 (US$)
- Table: Average Annual Manufacturing Wages, 2004-2006
- Table: Petrochemicals Business Environment Indicators And Rationale
- Table: Weighting Of Indicators

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Product features / use

Level	General Industry Strategies
Data	Detailed Market Forecasts
Profiles	Profiles of Key Companies
Features	Contains SWOT Analysis
Extra Info	Consumer Trends Highlighted