Abstract
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.
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