JG Summit shuts down petrochemical unit ‘indefinitely’ due to weak market

The JG Summit conglomerate will shut down its petrochemical business — which makes raw materials for the production of plastic products and industrial chemicals — due to a China-induced global oversupply of resins which has driven down resin prices sharply.

In a message to InsiderPH, JG Summit Holdings Corp. chair Lance Gokongwei said the JG Summit Olefins Corp. (JGSOC) “is now on indefinite commercial shutdown” due to “persisting unfavorable market conditions in the global petrochemical industry.”

“During the shutdown, JGSOC will continue to sell from existing product inventory,” said Gokongwei who also chairs the petrochemical firm.

Lance Gokongwei

The JG Summit chair is weighing options for the conglomerate's shuttered petrochemical business.

He pointed out, however, that the LPG trading operations of Peak Fuel Corp., a subsidiary of JGSOC, will remain unaffected by the shutdown.

“JGSOC continues to evaluate various options to mitigate the adverse effects of challenging market conditions, and will make the appropriate decision in due course,” Gokongwei said.

JGSOC is part of the family conglomerate’s petrochemical business which started in 1994. It sells its products to clients in over 30 countries. In January 2024, the firm opened a P150-billion facility in Batangas City.

The parent firm injected P17 billion in JGSOC late last year to help the firm pay maturing obligations amid a P11.4-billion nine-month loss in 2024 due to poor market conditions, despite a 53-percent increase in revenues during the period.