Taiwan Fertilizer plans real estate development

Eyeing the continuing boom in the property market, asset-rich Taiwan Fertilizer Co (台肥) on Tuesday announced plans to develop housing on land it owns in Nangang District (南港) in Taipei City and Hualien, which is expected to bring in a considerable profit.

Shares of Taiwan Fertilizer rose 0.63 percent to close at NT$63.8 (US$1.91) on the Taiwan Stock Exchange yesterday.

Taiwan Fertilizer said in a filing to the stock regulator that it will develop a residential complex on a 0.45-hectare lot in Nangang and a 2.8-hectare lot in Hualien.

The company has in the past sold off land parcels to developers to boost profits, but decided to exploit the two lots itself to bank on the sizzling property market and further increase its margin, Taiwan Fertilizer said in the filing.

Taiwan Fertilizer will build a 16-story residential building on the Nangang lot, it said.

Excluding the cost of the land, the company plans to invest NT$641 million in the project.

Calculating by housing prices in the same area, Taiwan Fertilizer is expected to see a profit margin of 20 percent as a result of the investment, it said.

Property prices in Nangang District have risen since the development of Nangang Software Park (南港經貿園區). The prices will continue to rally after the construction at Nangang Train Station is completed in 2010, when it will become a transportation hub with railway, high-speed rail and MRT access.

Investment in the residential houses to be built on Taiwan Fertilizer's land in Hualien is estimated at NT$106 million, and is expected to bring a 15 percent return, it said.

In addition to residential property, Taiwan Fertilizer should also profit from its commercial land in Nangang Software Park.

The company is scheduled to hold a conference next Monday for interested investors.

Chinese-language media reported that France-based hotel management service provider Accor would attend the conference to explore the possibility of building a hotel in the area.

Accor signed a contract in March with China Airlines Ltd (華航) to manage the carrier's planned four-star airport hotel under one of its brand names, "Novotel."

Taiwan Fertilizer has become more active in diversifying its business and energizing its assets. The company has invested in deep ocean water, with its new product hitting the market next month. It also inaugurated a factory on Tuesday in Miaoli County to produce skin-care products containing collagen extracted from fish.

Taiwan Fertilizer's cosmetics products will be introduced to the market in July. With annual output of 13.5 tonnes, the company hopes to generate NT$1 billion per year from the product lines.