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FPG to expand production in Ningbo of China.

Taipei, Aug. 26, 2009 (CENS) -- To ride on the wave of the economic recovery, Formosa Plastics Group (FPG) will invest US$174 million to expand production in its seven petrochemical plants in Ningbo of Zhejiang province, China.

With the proposed investments, the group will see total investments in the Ningbo petrochemical complex amount to over US$1 billion, approximately NT$32.9 billion. Total sales for the Ningbo petrochemical complex will amount to NT$78.4 billion (US$2.38 billion at US$1:NT$32.9) this year.

This is the first time for the group to rekindle overseas investment projects after a suspension resulted from the global financial tsunami. In addition, the group has launched investment in a large-sized steel mill in Vietnam.

The group first made an inroad into China by set up a large-sized petrochemical complex in Beilun of Ningbo about a decade ago, which has benefited its major subsidiaries, including Formosa Plastics Corp. (FPC), Nan Ya Plastics Corp., Formosa Chemical & Fibre Corp. (FCFC).

The investment in China has greatly benefited FCFC, a producer of raw materials for home appliances, after the China government subsidized villagers to buy home appliances.

An institutional investor estimated the FPGs Ningbo petrochemical production complex will see annual sales reach 16 billion renminbi (US$2.35 billion) this year after posting 8.6 billion renmibi (US$1.36 billion) in the first half.

An industry insider predicted FCFC will double PTA (purified terephthalic acid) output to 1.2 million metric tons in the Ningbo production complex because of the expanded investments. Plus its production capacity in Taiwan, FCFC will be able to churn out three million metric tons of PTA after the production expansion is completed. At that time, FCFC will outnumber the Taiwan-based China American Petrochemical Co. as the worlds largest producer of PTA.

((BS)) (G)

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Title Annotation:Formosa Plastics Group
Publication:The Taiwan Economic News
Article Type:Brief article
Date:Aug 26, 2009
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