Tita P. Villanueva, vice president and comptroller of pipe maker Crown Asia Chemicals, sees pipes, speaks pipes and dreams pipes. She gushes whenever she sees buildings being built.
“More buildings mean more wires and more wires mean more pipes. As the construction industry grows, it will use more wires, which will go through our pipes!”
Crown Asia Chemicals, which listed on the Philippine Stock Exchange in April last year, is the only listed pipe maker in the country. It reported sterling results in its maiden financial year as a public company.
Net profit rose by 53.2% to Php100.1 million in 2015 from Php65.4 million in 2014 while revenue rose 26.6% to Php1.1 billion from Php850.7 million in 2014.
Sales rose with the introduction of new production lines. Crown Asia is the only local manufacturer of a complete line of polypropylene random (PPR) pipes and fittings. Another new product is its high density polyethylene (HDPE) pipes. It is casting its vote – with these pipes – that it is worth investing in local manufacturing again.
PPR is a type of thermoplastic polyolefin that can be processed into pipes and fittings. PPR pipes are gaining popularity in the market as an alternative to galvanized iron (GI) pipes for buildings and homes, as these pipes can withstand water pressure as well as hot and cold temperatures. HDPE is a polyethylene thermoplastic made from petroleum that is used in gas pipelines and sewer and water applications.
Slower growth in China and rising costs are changing the dynamics in the region as those who have relocated their manufacturing there for cheap land and labor are recounting the costs. Similarly, those who have suspended new investments are now – like Crown Asia – positioning themselves with new product lines to meet anticipated demand.
Crown Asia’s investments in new production lines point to an apparent revival in manufacturing as the domestic market grows big enough to support the local production of previously imported products. Manufacturing output rose by an average of 7.6% per year between 2010 and 2015, more than double the 3% average growth rate in the previous six year period.
Another industry that has grown in tandem with the Philippine economy is the construction sector. As Tita sees the market – more buildings means there is greater demand for pipes.
It is for these reasons that Crown Asia decided to produce locally a complete line of PPR pipes and fittings.
Eugene Lee Villanueva, Crown Asia president, says “the PPR market is huge. It’s like the entire universe. Buildings built 30 years ago used GI pipes. They would have to be replaced. Most likely new buildings will use PPR pipes.”
They last longer than GI pipes and are less likely to corrode. Since PPR pipes ensure a tightly sealed system they are most reliable in plumbing and water supply plants. They are eco-friendly with no heavy metal content such as lead.
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