By Rhea Sandique-Carlos
MANILA--Philippine conglomerate JG Summit Holdings Inc. (JGS.PH) said Thursday that it expects to generate up to $1 billion in annual sales from its naphtha cracker plant project, which is due for completion in the last quarter of 2013.
"We believe we are on schedule and on budget," JG Summit president and chief operating officer Lance Gokongwei told reporters on the sidelines of the company's annual meeting.
The project, once completed, is expected to supply two-thirds of the Philippines's total demand for polypropylene and polyethylene resins--raw materials in the production of plastics.
Some of the plant's output will be exported to China and Vietnam, Mr. Gokongwei said.
The plant will have an annual capacity of 320,000 metric tons of polypropylene and will add 110,000 tons to JG Summit's 200,000-ton-a-year polyethylene output capacity .
The project is expected to expected to cost between $800 million and $900 million. The conglomerate has invested around $300 million so far, Mr. Gokongwei said.
To sustain the project's financing requirement, the company is planning to refinance $300 million worth of bonds that are due to mature next January, he added.
"We will look for a window sometime in the third or fourth quarter," he said, noting that the timing will be opportune, as the bond carries an interest rate of 8%, while current borrowing costs are much lower.
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