The Ministry of Economic Affairs (MOEA) yesterday said despite the scrapping of a naphtha cracker project, Kuokuang Petrochemical Technology Co (國光石化科技) shouldn’t be dissolved because it serves as a platform to strategize the future development of Taiwan’s petrochemical industry.
Both the ministry and CPC Corp, Taiwan (CPC, 台灣中油), hope that Kuokuang will move forward as it is a great cooperation platform integrating the private and public sectors, Minister of Economic Affairs Shih Yen-shiang (施顏祥) told the legislature.
The government on Friday withdrew its support for Kuokuang’s plans to build a naphtha cracker in Changhua County amid public concerns about possible environmental hazards and the failure of the project to pass numerous environmental impact assessments.
CPC is the largest stakeholder in Kuokuang with 43 percent, while private investors include Oriental Union Chemical Corp (東聯化學), Chang Chun Group (長春), China Manmade Fibers Corp (中纖), Fubon Financial Holding Venture Capital (富邦金創) and Pan Asia Chemical Corp (磐亞).
Kuokuang has capital of NT$540 million (US$18.7 million).
Kuokuang chairman Chen Bao-lang (陳寶郎), who was also at the legislature, said a board meeting to be convened tomorrow would “decide on the venture’s fate.”
Pending proposals to be passed by the board include the scrapping of the investment in Changhua and withdrawal of the plan from the Environmental Protection Administration, Chen said.
As for whether Kuokuang would set up a cracker plant abroad instead, this would depend on the board’s decision, he added.
Private shareholders of Kuokuang have evaluated investment feasibility in Malaysia, -Indonesia and China, Shih said.
Taiwan currently bans naphtha cracking investments in China and the ministry has been mulling lifting the ban. The private sector would be allowed to invest across the Taiwan Strait if the ban was lifted, but the ban would still apply for state-run firms such as CPC.
Such an overseas investment is huge in dollar terms and is similar to the previous ban on Taiwanese panel and chip investments in China. Allowing naphtha-cracking investments in China would have to be accompanied by a slew of restraints and conditions, the minister said last week.
The Chinese National Federation of Industries (全國工業總會), meanwhile, cast a no-confidence vote in the government.
“If Taiwan’s environment isn’t suited to petrochemical development, the government has to at least give a lifeline to the industry by allowing overseas investments,” the federation said in a statement. “The private sector should have a say as to where they want to invest. What the government needs to do now is to lay out a clear-cut policy for the future development.”