Formosa Plastics to makeheavy Mailiao investment

With an investment of NT$124.6 billion (US$3.66 billion), Formosa Plastics Group (台塑集團) is slated within two years to complete the fourth phase of development of its industrial complex in Mailiao, Yunlin County, company executives said.

"Pending environmental approval, the complex will become the world's largest petrochemical industrial park, with an estimated output value of NT$830 billion," Formosa's vice president of management, Wu Shin-jer (吳欣哲), told reporters in Mailiao last week.

Formosa Plastics began operating the complex in 2001 and has invested NT$542.2 billion in the first three phases of development.

The industrial complex currently consists of an oil refining plant capable of processing 19.05 million tonnes of crude oil each year, two naphtha-cracking plants that will produce 1.22 million tonnes of ethylene, a co-generation plant and an industrial harbor.

The Mailiao complex, which covers 2,096 hectares of reclaimed land along the west coast of Taiwan, is currently home to several of Formosa's petrochemical and plastics subsidiaries.

The complex also houses high-tech joint ventures including Formosa Komatsu Silicon Corp (台灣小松電子), which is an eight-inch wafer plant capable of producing 2.4 million wafers a year, and Formosa Plasma Display Corp (台塑光電), which is capable of making 120,000 plasma displays per year.

Nearly half of the investment in the complex will be funded by Formosa Petrochemical Corp (台塑石化), which intends to increase its oil refining capacity by over 20 percent.

"We expect to increase our refining capacity at the Mailiao plant to 550,000 barrels of crude oil a day from 450,000 barrels a day," Formosa Petrochemical's executive vice president, Su Chi-yi, (蘇啟邑) said last week.

Formosa Petrochemical's NT$54.4 billion investment will include an additional naphtha-cracking plant that will produce 1.09 million tonnes of ethylene a year.

Next year, the company will further develop its ability to compete in the industrial diesel and fuel oil markets, Su said.

"Because the demand for diesel in Asian countries is high, we hope to take advantage of price gaps by exporting diesel to neighboring countries," he said.

Wayne Hsiao (蕭文欽), an assistant vice president from Formosa Plastics Corp (台塑), stressed the importance of the Chinese market.

Hsiao said that "market demand in the petrochemicals industry in the next 10 to 15 years hinges on the Chinese market."

Hsiao said that the world's five largest petrochemicals players have geared up to enter the Chinese market and are expected to start their operations in the next five years.

In the competition among petrochemicals players in Asian markets, Formosa Petrochemical believes that it enjoys the advantages of a multi-functional industrial harbor for oil shipments, low-cost electricity, automated oil refining processes and market-oriented strategies to produce refined oil of high quality at low cost.

Formosa is also banking on its Mailiao industrial harbor, which as the nation's deepest harbor is capable of accommodating vessels of 260,000 tonnes.

The harbor's annual capacity has increased from 17,900 tons in 1997 to an estimated 41.2 million tons this year.