Bulacan chemical firm plans IPO, to build 100-M pipe manufacturing plant

Local chemical manufacturer Crown Asia Chemicals Corp., who is currently waiting for regulatory approval on its planned initial public offering, is planning to build a 100-million pipe manufacturing plant as part of its expansion and product diversification.

Based in Bulacan, Crown Asia is engaged in the production of plastic compounds, pipes, and related products for direct and indirect use in the construction and telecommunication industries.

A prospectus filed with the Securities and Exchange Commission (SEC) showed that the company is planning to construct a PPR and HDPE manufacturing plant and warehouse facilities as well as to purchase the necessary equipment for the plant.

Typically used in gas pipelines, HDPE is a type of chemical with a large strength-to-density ratio for trenchless applications such as directional drilling and pipe bursting, while PPR pipes are a type of pipe that serves as an alternative to galvanized iron pipes for buildings and homes as these pipes can withstand water pressure as well as hot and cold temperature.

A few years ago, Crown Asia decided to start manufacturing its own HDPE pipes, utilizing only one of its existing machineries.

The company, on the other hand, decided to include PPR pipes and fittings in its portfolio as construction because construction projects are expected to surge over the next several years with the bright prospect on the Philippine construction sector.

The entire estimated cost to construct the PPPR and HDPE manufacturing and warehouse facilities and purchase equipment for the plant is about 100 million.

In total, the plant will have capacities of 4,800 MTPA for its PPR line and 4,500 MTPA for its HDPE line.

This facility, according to the company, will be situated adjacent a lot to be acquired from a company called Guiguinto Integrated Wood Industries Corp. (GIWICO).

The company is currently in talks with GIWICO for the acquisition of a 5,462 square meters vacant lot, which is beside Crown Asia’s current manufacturing and warehouse facilities in Guiguinto, Bulacan.

“The company is preparing for its next level of growth. This will be in the direction of introducing new products that complement its current product lines to synergize the company’s growth potentials. In this regard, the company realizes the necessity to purchase property for future expansion,” Crown Asia told the SEC.

The company is currently assessing various locations in terms of its sustainability for construction of a manufacturing plant, which includes the availability of access roads, utilities, labor, the size of the market it can serve, and the track record of safety from calamities.