Thu, May 25, 2006 - Page 12 News List

Formosa Petrochemical's president foresees 10 percent rise in revenue

AP AND BLOOMBERG , TAIPEI

Formosa Petrochemical Corp (台塑石化) expects its revenue to rise more than 10 percent this year, president Wilfred Wang (王文潮) said at a press conference yesterday.

The company's revenue for last year was NT$443.32 billion (US$13.8 billion), according to a previous filing with the Taiwan Stock Exchange.

Wang said he doubted the company's operating profit growth would be similar to last year's, as it may not be able to fully transfer higher oil costs to customers. He declined to provide a specific earnings forecast.

The company reported operating profit of NT$61.39 billion last year, up 10.5 percent from NT$55.56 billion in 2004.

Formosa Petrochemical, the nation's only privately run refiner, plans capital expenditure this year of NT$28 billion as part of the NT$80 billion phase four expansion of its No. 6 naphtha cracker that began in 2002, Wang said.

Its capital spending last year was around NT$30 billion, he said.

Wang denied recent media speculation that Formosa Petrochemical planned to build a naphtha cracker in China, circumventing the government's restriction on such investments. He said that Formosa Petrochemical's presence in China was strictly downstream, in keeping with government regulations.

Wang said investing in a refinery or naphtha cracker in China wouldn't make business sense now because China still tightly regulates the upstream petrochemical industry.

Foreign petrochemical firms aren't allowed to freely import their own crude oil, export naphtha or sell oil products in the Chinese market, he said.

Wang said that Formosa Petrochemical may lobby the Chinese government to loosen its regulations covering foreign petrochemical companies, but only after the Taiwanese government relaxes its own restrictions on upstream petrochemical investment in China.

"We still want to pursue it if we are allowed," he said.

Formosa Petrochemical also intends to sell more oil products overseas to tap growing global demand and counter stalling domestic sales.

The company will complete projects before the end of this year to expand its refining capacity to 540,000 barrels a day from 510,000 now, Wang said.

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