Formosa Plastics Group, the na-tion's largest industrial group, held talks with China's government to seek support for a petrochemical plant that would be the biggest single investment by a Taiwanese com-pany in China.
The plant would include a naphtha cracker able to produce 1.2 million tonnes of ethylene a year, Formosa Plastics Corp (台塑) president Lee Chih-tsuen (李志村) said. The group hasn't decided whether an oil refinery will form part of the complex.
Formosa Plastics plans to spend between US$3 billion to US$5 billion building a petrochemical complex in China, where many of its customers are located. Taipei has opposed the investment, worried the plan will draw too much money away from the country.
``The aim of this plant will be to supply our customers in the mainland,'' Lee said. ``We're still talking with the mainland government, and we will also ask the Taiwan government for permission'' to proceed with the plan, he said in a telephone interview.
Lee recently returned from China where he discussed his com-pany's plans with Chinese Vice Premier Wu Yi (吳儀).
Taiwan restricts China investment on concern its economy might become too dependent on China, already the nation's largest trading partner. The government has since 2000 said it may consider lifting the ban on companies building naphtha crackers, which process naphtha, an oil product, into ethylene to make plastic and textiles, in China.
The government also maintains a ceiling on individual companies' investments in China, ranging from US$80 million to 40 percent of the company's net worth.
The largest single investment that Taipei has approved is Taiwan Semiconductor Manufacturing Co's (台積電) US$898 million semiconductor project near Shanghai.
Formosa Plastics Group will ask the government to reconsider its opposition to the company's plans, said Lee, who doesn't expect a breakthrough on permission for the project before Dec. 11 elections.
It's more than 10 years since the Formosa Plastics Group first proposed the idea of building a naphtha cracker in China. The plan didn't get government approval then because of political tensions across the Taiwan Strait.
In his Double Ten National Day speech, President Chen Shui-bian (陳水扁) said that Taiwan and China should discuss arms control, indicating tensions between the two sides may ease.
The Formosa Plastics Group has built more than 40 plants in China to produce plastic products, textiles and materials used in printed circuit boards.