1 In what could prove a major addition to the Philippines' foreign-investment portfolio, a Taiwanese company signed a $180 million construction contract to build the centerpiece of a planned petrochemical complex.
2 Taiwan's USI Far East Corp., a petrochemical company, initialed the agreement with an unidentified Japanese contractor to build a naphtha cracker, according to Alson Lee, who heads the Philippine company set up to build and operate the complex.
3 Mr. Lee, president of Luzon Petrochemical Corp., said the contract was signed Wednesday in Tokyo with USI Far East officials.
4 Contract details, however, haven't been made public.
5 The complex is to be located in Batangas, about 70 miles south of Manila.
6 USI Far East will hold a 60% stake in Luzon Petrochemical, according to papers signed with the Philippine government's Board of Investments.
7 The proposed petrochemical plant would use naphtha to manufacture the petrochemicals propylene and ethylene and their resin derivatives, polypropylene and polyethylene.
8 These are the raw materials used in making plastics.
9 The contract signing represented a major step in the long-planned petrochemical project.
10 At an estimated $360 million, the project would represent the single largest foreign investment in the Philippines since President Corazon Aquino took office in February 1986.
11 It also is considered critical to the country's efforts to both attract other investment from Taiwan and raise heavy industry capabilities.
12 The project has been in and out of the pipeline for more than a decade.
13 However, workers can't break ground until legal maneuvers to block the complex are resolved, moves which caused the signing to remain questionable up to the last moment.
14 As previously reported, a member of the Philippines' House of Representatives has sued to stop the plant.
15 The legislator, Enrique Garcia, had actively backed the plant, but at the original site in his constituency northwest of Manila.
16 The country's Supreme Court dismissed the suit, but Mr. Garcia late last month filed for a reconsideration.
17 In addition, President Aquino has yet to sign into law a bill removing a stiff 48% tax on naphtha, the principal raw material to be used in the cracker.
18 However, at a news conference Thursday, Mrs. Aquino backed the project and said her government was attempting to soothe the feelings of residents at the original site, adjacent to the government's major petroleum refinery in Bataan province. 'We have tried our best to tell the people in Bataan that maybe this time it will not go to them, but certainly we will do our best to encourage other investors to go to their province,' Mrs. Aquino told Manila-based foreign correspondents.
19 The project appeared to be on the rocks earlier this month when the other major partner in the project, China General Plastics Corp., backed out.
20 China General Plastics, another Taiwanese petrochemical manufacturer, was to have a 40% stake in Luzon Petrochemical.
21 However, Mr. Lee said that USI Far East is confident other investors will take up the slack.
22 He said USI Far East has applied to both the Asian Development Bank and the World Bank's International Finance Corp. for financing that could include equity stakes.

Mr . Lee , president of Luzon Petrochemical Corp . , said the contract was signed Wednesday in Tokyo with USI Far East officials .
Luzon Petrochemical Corp
What is the primary business of Luzon Petrochemical Corp?