Nan Ya Plastics anticipates flat profit

Nan Ya Plastics Corp (南亞塑膠), the world's largest processor of plastics for pipes and imitation leather, expects its profit this year to be little changed from last year, as earnings from chemical products slump.

The Taipei-based company will rely on rising income from electronics to counter the decline in profit from other products, said Wu Chia-chau (吳嘉昭), executive vice president at Nan Ya Plastics, a unit of Formosa Plastics Group (台塑集團).

"Earnings for the petrochemical sector will decline because of increasing competition from China, while there'll be growth from electronics," Wu said in an interview yesterday. "Profit this year will be about the same as last year."

Nan Ya Plastics, which has expanded into the manufacturing of petrochemicals, polyester and electronics components such as optical disks and materials used to make printed circuit boards, hasn't announced 2005 earnings. Nine-month profit rose 9.2 percent to NT$32.3 billion (US$957 million) from a year earlier.

The company's profit more than doubled in 2004 after growing by 25 percent in 2003.

Electronic products will account for more than 40 percent of Nan Ya Plastics's consolidated sales this year, compared with 38 percent last year, Wu said. Those of petrochemicals will probably fall to 20 percent from 23 percent in 2005, he said.

Nan Ya Plastics had an 8.3 percent fall in January sales.

"We're focusing on expansion in electronics materials," Wu said. The company plans to double its production capacity of printed circuit board components in China by the end of next year, he said, declining to give an estimate for the planned investment.

The company has about 30 plants in China that make plastic pipes, synthetic leather, and components for printed circuit boards.

The Formosa Plastics Group, which owns the world's biggest processor of plastics for pipes and imitation leather, plans to invest as much as US$1.5 billion in the US and Taiwan to tap rising demand for chemicals and energy over the next few years, Lee Chih-tsuen (李志村), president of Formosa Plastics Corp (台塑), the group's oldest company, said on Jan. 12.

Shares of Nan Ya Plastics fell 0.9 percent to close at NT$46.85 on the Taiwan Stock Exchange. The stock has climbed 5.9 percent in the past 12 months, compared with a 9.9 percent gain in the benchmark TAIEX.