A range of 11 big industrial projects is in the works
Late in 1979, the Marcos government accelerated the launching of 11 major industrial projects. Here is their recent status: 1. Copper smelter:
Contracts for the $235 million smelter were awarded in November 1979, and construction of the plant in Isabel, Leyte started in January. Start-up is scheduled for early 1983. It is a government joint venture (35 percent) with a dozen large Filipino copper companies. They have formed the Philippine Associated Smelting & Refining Corporation, which has entered into a turnkey contract with the Marubeni Corporation of Japan to build the smelter, with a capacity of 138,000 metric tons per year.
2. Phosphate fertilizer:
This summer four multinational consortia were bidding on the plant. It is to be constructed next door to the copper smelter, making use of cheap sulfuric acid waste from that smelter. The 350,000-metric-ton plant is to be completed in mid-1983 and is expected to cost between $300 million and $400 million. The four consortia are Badger Engineering of the United States and Mitsui of Japan; Simchem of Britain and Toyo Engineering amd Marubeni of Japan; Foster Wheeler/Iberia and Tecnicas Reunidas of Spain and Lurgi of West Germany; and Coppee Rust of Belgium, Dragados of Spain, and C. Itoh and Mitsubishi of Japan.
The four consortia are bidding to supply the equipment and build a sulfuric acid plant, a phosphoric acid plant, an ammonium sulfate plant, and a granulation complex for the fertilizer plant.
The government hopes to take a 60 percent equity in the project, called the Philippine Phosphate Fertilizer Corporation. It hopes the project will save $ 150 million a year in foreign exchange.
3. Aluminum smelter:
A 50-50 joint-venture agreement was signed last February between the government-owned Philippine National Development Corporation and Reynolds Metals Company of the US to undertake the $450 million smelter.The plant, at 140,000 metric tons a year, will process bauxite from Australia or from Samar Island in the central Philippines and be located on Mindanao Island to take advantage of relatively cheap power from hydroelectric plants on the Agusan and Pulangi Rivers. The plant is to start up in early 1984. Fabrication of cans and other products is to follow.
4. Diesel engine manufacturing:
The Philippine Board of Investments (BOI) awarded the two projects to two companies. Isuzu Motors of Japan and got the lower- range horsepower (50 to 150 hp.) plant, expected to cost $40 million. Machinenfabrik Augsburg-Nurnberg AG of West Germany won the $55 million contract for the higher- horsepower range ( 90 to 320 hp.) plant. The engines are to be produced for the domestic truck industry and for export. The goal is to sell $77 million of engines abroad per year by the end of five years. Detailed plant engineering is under way. Commercial operation is expected in 1982.
5. Cement industry expansion:
The Philippine Cement Industry Authority launched a program to convert existing plants from the use of imported oil to domestic coal. It also plans some 1 million tons per year of new export-oriented plants. The project is to be completed by 1984.
6. Coconut industry rationalization.
A joint venture agreement between the United Coconut Planters Bank, the Philippine bank serving the local coconut industry, and Henkel of West Germany was signed in February for the manufacture of coconut fatty alcohol as feedstock for biodegradable detergents. This plant, to be located in northern Mindanao, is scheduled to start production in late 1982.
7. Integrated pulp and paper mill:
The Association of Southeast Asian Nations gave its blessing to this project at a meeting of economic ministers in Singapore in April. The next step is a detailed feasibility study. It is expected the complex will cost about $400 million. Industry Minister Roberto V. Ongpin expects the project to be in operation in 1984.. At present, the Philippines has the only newsprint plant in Southeast Asia.
8. Petrochemical complex:
The Board of Investments approved in the fall of 1979 the construction of two down- stream petrochemical plants next to a refinery at Bataan.One plant to produce low-density polyethylene is to be owned by USI of the United States and Far East of Taiwan; the other, a polypropylene plant, will be built by Hercules Inc., another American company. The Philippine National Oil Corporation will take a minority ownership in the projects. Detailed engineering is under way. The plants are expected to be finished by 1983 at a combined cost of some $112.8 million.
Also under consideration is a $250 million naphtha cracker for the National Oil Corporation. However, the state-owned company is trying to identify a secure source of feedstocks and looking at costs of raw materials and power.
9. Heavy engineering industries:
The BOI is talking with two West German companies about establishing an engineering complex to fabricate domestically some 60 or 70 percent of the parts and components of large industrial plants. The idea is to save on foreign exchange as well as provide jobs. It is to include a foundry to make large castings, a huge forge and a fabricating equipment. It is expected to cost some
10. Integrated steel project:
An Austrian study team was commissioned this summer to determine what process will be used in the proposed steel mill. It is being conducted by a team from Austroplan, an engineering consulting firm. The study will determine whether local steel production will apply the conventional process with a blast furnace or use a "direct reduction" process. There are also talks over the supply of equipment and joint-venture arrangements for a plant expected to cost more than date for operation is 1985.
The project is expected to be a joint venture of the government-owned Philippine National Development Corporation and foreign enterprisers, probably the Japanese or Austrians. Mr. Ongpin wants to see as much domestic raw materials used in the plant as possible, including iron ore and coking coal.
President Marcos has formed the Philippine Alcohol Commission to pursue a nationwide program for producing a mixture of 20 percent alcohol and 80 percent gasoline to run motor vehicles. It is expected to use sugar, primarily, as a raw material. Energy Minister Geronimo Velasco plans to establish alcogas plants and filling stations in major cities nationwide.