CHAPTER I

INTRODUCTION

The plastic manufacturing industry represents a significant contribution to

the world’s economy. Companies in this industry produce a wide variety of

products of several uses and applications that bring huge impacts to different

races of people today. One of these products is the polyethylene which has

enormously diverse functions in plastic manufacturing industry. Polyethylene is

widely used in drugs, certain cleaners and in food packaging; thus, the demand

for it is driven by the demand for the products it is used to produce.

But then there are rules and regulations regarding the prohibition of the

use of plastic but still, there are many goods and commodities that can’t be

acquire without the use of plastic.

Millions of tonnes of wastes coming from plastic production are generated

because of the growing demand of plastic each year. It result to many problems

like water pollution, clogging of drainage that leads to flash flood, and the

incineration gives off harmful greenhouse gases that contributes to global

warming. Worst, plastics characterize with its durability makes it very hard to

decompose. It’s continues usage and improper waste segregation and

management will impose threat to human and environment.

The world’s science came up with addition of biopolymers such as corn,

cellulose, soy or starch to address the problems cause by massive plastic

production. The biopolymers are susceptible to oxidation, thus, hasten it

degradation period at the same time increases its physiomechanical

characteristics of the plastics that will be manufactured.

High Density Oxo-Biodegradable Polyethylene Resin Manufacturing plant

will employ agricultural waste whose cellulosic content are known. These

materials include corn cobs, bagasse, bamboo fiber and many other wood pulps.

Consequently, bagasse, a waste material obtained from the extraction of

juices in sugar cane, is composed of cellulose 46%, hemicellulose 24.5%, lignin

19.95%, fat and waxes 3.5%, ash 2.4%, silica 2%, and other elements 1.7%

(Sugarcane bagasse cellulose HDPE composites obtained by extrusion, Mulinari

et. Al). Instead of being burned after extraction causing harmful gases, bagasse

is composed of biopolymers suitable of HDPE (High density Polyethylene)

plastics composite.

The introduction of the named composite will aid in biodegradable plastics

or simply bioplastics. These bioplastics have a shorter period of decomposition

time and has a lower amount of energy consumption in terms of production and

is less toxic with the currently purchased plastics in the market.

Plant Capacity

The High Density Oxo-biodegradable Polyethylene Plant has an

approximate capacity of 60,340 tons/year.

Location

The selection of the plant site is a vital factor in the profitability of the

project and in future plans of expansion. The success of any industrial venture in

terms of returns on investment depends largely on location.

The designed High Density Oxo-biodegradable Polyethylene Resin

Manufacturing Plant will be located at Nasugbu, Batangas with the capacity of

60, 340 tons per year. Several factors are considered for the selection of the

location such as suitability of land and climate, ease of access to transport, room

for expansion, and environmental and safety requirements.

The selected location provides ease of access to transport. Its geography

is located along the coast connected to the sea which means an easy access for

ships and vessels. The location has abundant supply of sugarcane which in turn

reflects a substantial advantage on the transport of raw materials. This will

reduce the expenses regarding to the transportation of raw materials since it is

readily available within the locality.

The portion of product demand will be transported to the major market in

Batangas city namely the JG Summit Petrochemical Company and National

Petrochemical Corporation in Bataan.

The electrical power that will be utilized in the plant will be supplied by

Sem-Calaca Power Corporation, a subsidiary of Semirara Mining Corp.

Since labours will be needed for construction of the plant and its

operation, there would be numerous job opportunities for the people around the
area. Local trade union customs and restrictive practices have considered

ensuring the availability and suitability of the labors for recruitment and training.

The plant has a total land area of 250,000 m2 consisting of the laboratory,

administration building, canteen, clinic, storage room, warehouse, the cellulose

extraction section, the polymerization section, the mixing section, wastewater

treatment section, maintenance section and a guard house.

Figure 1 and 2 shows the location of where the project will be constructed.

Figure 1. Map view of the proposed location of High Density Oxo-biodegradable

Polyethylene Resin Manufacturing Plant

 Figure 2. Satellite view of the proposed location of High Density Oxo-

biodegradable Polyethylene Resin Manufacturing Plant

Target Customers of High Density Oxo-biodegradable Polyethylene Resin

Global Market

The modern world needs plastics and polymers are all around us. We

make hundreds of millions of tons of it every year, most of which are petroleum

based. Their durability and long life is their greatest asset, but it is also their

biggest problem. Most of the plastics we use will remain in landfills for years to

come or litter the environment endangering both humans and wildlife alike.

Biodegradable plastics and polymers have a key advantage over regular plastics

and polymers in that they will break down over time, with minimal damage to the

planet.
 Plastics Business, which reports on the plastics industry estimates that, “In

2012, Europe was the dominant market for biodegradable polymers consuming

147 KMT or about 55 percent of world consumption; North America accounted

for 29 percent and Asia approximately 16 percent.”

Packaging was the single-largest application of biodegradable plastics,

with a market share of nearly 60% of the total demand in 2013. Increasing

demand for high density polyethylene (HDPE) is driving the demand for

biodegradable plastics.

PRODUCT MAJOR COMPANY PLAYERS

Oxo-Biodegradable Plastics Metabolix Inc. (U.S.)

BASF SE (Germany)

Corbion N.V. (Netherlands)

Natureworks LLC (U.S.)

Biome Technology Plc (U.K.)

Local Market

The Philippine plastic industry is relatively young which grew only in mid-

1960s with the arrival of technology for injection, extrusion, and blow molding.

Plastic pipe production began in 1970s with increased demand for the product

as inputs for the government’s waterworks projects. Two companies set up the

first plants in the Philippines; these are Mabuhay Vinyl Corporation, put up the
first synthetic thermoplastic and resin plant in Mindanao. Vinyl Consortium

extablished a plant with an annual capacity of 18,000 metric tons for the

production of Vinyl Chloride Monomer (VCM). Both of these companies supplied

inputs to other manufacturers for the manufacture of plastic pipes, footwear,

packaging and calendaring items.

Locally, National Petrochemical Corporation and JG Summit

Petrochemical are the companies have its own product specificationa and

advantages in the industry. JG Summit Petrochemical had already entered global

market and recently, start operations on their new Naphtha cracking Plant. Major

players locally are show at the table below

Table 1. Major local Players and Competitors

Name of Company Product Capacity(Ton/year)

JG Summit LLDPE/HDPE Resin 160000

Petrochemical

National Petrochemical LLDPE/HDPE Resin 275000

Corporation

10 Year Demand Projection

The global biodegradable plastics market is expected to grow at a rapid

pace during the forecasted period (2018-2028). The market is mainly driven by

increased environmental awareness and implementation of stringent

environmental regulations.
 This study estimates the Philippines’ polyethylene market for 2018 and

projects the demand increase by 2028.

Table 2. Projection of Polyethylene Resin in the Philippines for 10 years

PHILIPPINE DEMAND

Year Tons

2019 262, 593

2020 267, 651

2021 279, 602

2022 269, 949

2023 272, 401

2024 274, 984

2025 265, 111

2026 272, 820

2027 270, 972

2028 269, 634

 Figure 3. Global Demand of Polyethylene

Seen in Table 2 is the demand of Polyethylene resin in the Philippines

projected in 10 years. Based on the global demand, Northeast Asia has the

highest demand of having 35% of the world’s bioplastics demand.