Formosa Plastics Corp (FPC, 台塑) and Nan Ya Plastics Corp (南亞塑膠) yesterday said an order from the Yunlin County Government last week to close six petrochemical plants in the county after a series of fires would lead to heavy financial losses.
Nan Ya said in a filing to the Taiwan Stock Exchange that closing five of its plants would generate losses of NT$8.4 million (US$291,400) per day, while FPC said it would suffer losses of NT$26 million per day.
The remarks came after FPC yesterday sent representatives to the county government, after it ordered the shutdown from June 1 over safety concerns.
FPC called on the county government to postpone the shutdown, saying not all of the plants had safety issues.
The firms sought a compromise or leniency with the county government, saying that the suspension of so many plants at the same time could deal a heavy blow to the petrochemical sector.
However, the county government said that postponing the shutdown was not possible because public safety was more important than economic development.
After the order, Nan Ya’s shares plunged 5.5 percent to close at NT$77.3 in Taipei trading yesterday, while FPC’s shares dipped 3.54 percent to NT$109.
In an unprecedented move, FPC was ordered on Friday to shut down its 12-hectare vinyl chloride (VCM) plant at the Mailiao (麥寮) petrochemical complex on June 1.
The plant produces polyvinyl chloride (PVC) and other plastic materials.
The county government also told Nan Ya to shut down its 50-hectare Haifeng (海豐) factory compound on the same date.
The Haifeng compound houses five production lines that churn out a number of key textile materials and petrochemical intermediaries, including 1,4 butylene glycol (BG), ethylene glycol (EG) and bisphenol A (BPA).
The plants in question should remain closed until the county government and the Council of Labor Affairs decide that safety measures have been adequately improved, Yunlin County Commissioner Su Chih-fen (蘇治芬) said on Friday.
The county government issued the unusually harsh penalty to FPC after two fires at the group’s Mailiao complex on May 12 and May 18.
FPC executives were caught off-guard by the county government’s decision and said the punitive move would deal a serious blow to the downstream petrochemical industry, with the textile sector taking the brunt of the impact.
FPC’s VCM plant produces 800,000 tonnes of petrochemical materials a year. The plant has been closed since the May 12 fire. Its shutdown will affect Nan Ya’s operations because VCM is an important ingredient in the production of PVC and many other plastic materials.
Nan Ya is the world’s fourth-largest EG producer, with its Mailiao and Haifeng factories churning out 180 tonnes of the chemical annually.
Some sections of a Nan Ya plant in the Mailiao complex have suspended production since the May 12 fire pending safety inspections, but the Haifeng compound’s shutdown would affect global EG supply and deal a drastic blow to the downstream synthetic fiber industry, market analysts said.
Nan Ya’s monthly sales could drop by between NT$8 billion and NT$10 billion because of the Haifeng complex closure, they said.
Additional reporting by staff writer
PERSISTENT RUMORS: Nvidia’s CEO said the firm is not in talks to sell AI chips to China, but he would welcome a change in US policy barring the activity Nvidia Corp CEO Jensen Huang (黃仁勳) said his company is not in discussions to sell its Blackwell artificial intelligence (AI) chips to Chinese firms, waving off speculation it is trying to engineer a return to the world’s largest semiconductor market. Huang, who arrived in Taiwan yesterday ahead of meetings with longtime partner Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), took the opportunity to clarify recent comments about the US-China AI race. The Nvidia head caused a stir in an interview this week with the Financial Times, in which he was quoted as saying “China will win” the AI race. Huang yesterday said
Nissan Motor Co has agreed to sell its global headquarters in Yokohama for ￥97 billion (US$630 million) to a group sponsored by Taiwanese autoparts maker Minth Group (敏實集團), as the struggling automaker seeks to shore up its financial position. The acquisition is led by a special purchase company managed by KJR Management Ltd, a Japanese real-estate unit of private equity giant KKR & Co, people familiar with the matter said. KJR said it would act as asset manager together with Mizuho Real Estate Management Co. Nissan is undergoing a broad cost-cutting campaign by eliminating jobs and shuttering plants as it grapples
The Chinese government has issued guidance requiring new data center projects that have received any state funds to only use domestically made artificial intelligence (AI) chips, two sources familiar with the matter told Reuters. In recent weeks, Chinese regulatory authorities have ordered such data centers that are less than 30 percent complete to remove all installed foreign chips, or cancel plans to purchase them, while projects in a more advanced stage would be decided on a case-by-case basis, the sources said. The move could represent one of China’s most aggressive steps yet to eliminate foreign technology from its critical infrastructure amid a
MORE WEIGHT: The national weighting was raised in one index while holding steady in two others, while several companies rose or fell in prominence MSCI Inc, a global index provider, has raised Taiwan’s weighting in one of its major indices and left the country’s weighting unchanged in two other indices after a regular index review. In a statement released on Thursday, MSCI said it has upgraded Taiwan’s weighting in the MSCI All-Country World Index by 0.02 percentage points to 2.25 percent, while maintaining the weighting in the MSCI Emerging Markets Index, the most closely watched by foreign institutional investors, at 20.46 percent. Additionally, the index provider has left Taiwan’s weighting in the MSCI All-Country Asia ex-Japan Index unchanged at 23.15 percent. The latest index adjustments are to
RSS