The biggest units of Formosa Plastics Group (FPG, 台塑集團) reported an increase in first--quarter pretax profits after the March 11 earthquake disrupted petrochemical production in Japan.
Pretax profits at the group’s four biggest units, including Formosa Plastics Corp (台塑), rose 69 percent from a year earlier to NT$72.7 billion (US$2.5 billion) in the three months ending on March 31, the industrial group said in a statement yesterday.
“Japan’s petrochemical industry is in competition with Taiwan, [South] Korea and China,” said Max Chan, a Taipei-based analyst at Capital Securities Corp (群益證券), who has a “neutral” rating on the FPG units. “As output in Japan is disrupted, products from the countries can be substitutes.”
Japanese producers of ethylene, an ingredient in plastics and detergents, had 23 percent of their capacity shut following the earthquake and ensuing tsunami, Chemical Market Associates Inc said in a report on March 24. The report said 37 percent of Japan’s polyethylene plastic capacity was also cut and 46 percent of the country’s polyvinyl chloride (PVC) capacity was halted.
PVC maker Formosa Plastics Corp’s first-quarter pretax profits gained 86 percent to NT$16.8 billion, its parent company said. Plastics processor Nan Ya Plastics Corp’s (南亞塑膠) profits climbed 52 percent to NT$15.5 billion on a pretax basis. Chemical producer Formosa Chemicals & Fibre Corp’s (台灣化學纖維) pretax profits rose 79 percent to a record NT$20.4 billion.
Oil refiner Formosa Petrochemical Corp (台塑石化) increased profits by 60 percent to NT$20.1 billion before taxes, the group said in the statement.
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