Sun, Nov 11, 2007 - Page 11 News List

Formosa Plastics Group to increase Vietnam investment

EXPANSION The group plans to build a nylon plant and expand its yarn spinning and polyester capacity by investing another US$600 million

BLOOMBERG

Formosa Plastics Group (台塑 集團), the nation's biggest industrial conglomerate, will invest US$600 million in Vietnam over two years to expand output of products such as textiles.

The Taipei-based conglomerate will build a nylon plant, as well as increase its capacity for the manufacture of polyester and yarn spinning in the sSutheast Asian country, Formosa Plastics Group chief executive officer William Wong (王文淵) said.

Wong made the remarks during the group's annual athletic meeting at Mingchi University of Technology in Taishan Township (泰山), Taipei County, yesterday. He is a nephew of Wang Yung-ching (王永慶), who stepped down in June last year.

Formosa Plastics has built factories in China to lower production costs for making plastic pipes, imitation leather and textiles. It has chemical plants in the US to tap the market.

"Vietnam will probably become our largest overseas production base after the US and China," Wong said.

The group has invested about US$700 million in Vietnam, he said.

The group will also expand output of biaxially oriented polypropylene in Vietnam, Wong said. The material is used to manufacture packing materials.

It may invest in a cogeneration plant expansion there after the project gains approval from Vietnamese authorities, Wong said.

"The investment will help Formosa Plastics [Group] become more competitive," said Michael On (洪瑞泰), who does not own shares of Formosa Plastics Group units among the US$100 million in assets he manages at Beyond Asset Management Co (晉昂證券投顧).

"Those manufacturing busi-nesses need labor and Vietnam helps them lower that cost," he said.

Formosa Plastics Group joins companies such as Hon Hai Precision Industry Co (鴻海精密) in adding investments in Vietnam.

Taipei-based Hon Hai, the world's largest contract electronics manufacturer, said in August it would invest US$5 billion over the next five years in the Southeast Asian country to make parts for computers, digital cameras and mobile phones.

Formosa Plastics Group controls Formosa Plastics Corp (台塑), the world's second-largest maker of polyvinyl chloride, and Nan Ya Plastics Corp (南亞塑膠), the biggest processor of plastics used in pipes and imitation leather. Another unit, Formosa Petrochemical Corp (台塑石化), is Taiwan's only publicly traded oil refiner.

The nation' exports of chemicals surged 28 percent from a year earlier in the 10 months ended last month, while those of plastic and rubber rose 19 percent, outpacing the 8.9 percent gain in total overseas shipments, the Ministry of Finance said on Wednesday.

Four of Taiwan's 10 biggest exporters in 2005 were Formosa Plastics Group units, led by Formosa Petrochemical's top ranking and Nan Ya Plastics' sixth place, the Bureau of Foreign Trade said.

This story has been viewed 4735 times.
TOP top