Minister of Economic Affairs Shih Yen-shiang (施顏祥) confirmed yesterday that a controversial petrochemical investment project that was scrapped in Taiwan may be revived in Malaysia.
According to local media reports, Malaysian Prime Minister Najib Razak announced on Sunday that his country would work with a Taiwanese petrochemical company to launch a multibillion-dollar investment project for oil refining, naphtha cracking and petrochemical production.
Fielding questions at a legislative committee meeting, Shih said the company Najib referred to was Kuokuang Petrochemical Technology Co (國光石化), in which Taiwan’s state-owned oil refiner CPC Corp, Taiwan (CPC, 台灣中油), has a large stake.
CPC media liaison officer Jessica Tang (唐苑莉) said Kuokuang may build a refinery, naphtha cracker and other plants.
“We are evaluating the feasibility of the proposed investment” and the company may make a decision by the middle of next year, depending on government approval, she said.
Kuokuang may invest between US$10 billion and US$12 billion in the project, if the Taiwan government approves the investment, Tang said.
The project may share amenities and infrastructure with a US$20 billion refinery and petrochemicals complex planned by Malaysian state oil and gas company Petroliam Nasional BHD, according to Najib. It would be located in Pengerang, which is in the Southeast Asian nation’s southernmost state of Johor, which Malaysia wants to transform into an oil hub to compete with Singapore.
Kuokuang was incorporated in January 2006, with major investors also including Ho Tung Chemical Corp (和桐化學), Oriental Union Chemical Corp (東聯化學) and China Man-Made Fiber Corp (中國人纖), according to the ministry. It had planned to build a naphtha cracking and petrochemical complex on coastal wetlands in Changhua County.
The project was scrapped, however, after local residents and environmental impact assessment teams raised concerns that the complex would consume too much water and generate high levels of pollution in the ecologically sensitive area.
“Kuokuang has since been seeking a suitable overseas destination for its investment project, and Malaysia is a possible option,” Shih said.
Asked about the possible impact of such a move on Taiwan’s petrochemical industry, Shih said industry executives had agreed to focus on producing higher-quality petrochemicals at home and other petrochemical intermediaries abroad.
He said that Kuokuang’s decision to launch its new investment project abroad would definitely have an adverse impact on Taiwan’s petrochemical production value.
“However, since our people have made a choice against the Kuokuang project, the Ministry of Economic Affairs must uphold this policy line,” Shih said.
Separately, Formosa Plastics Group (台塑集團, FPG), which faces investment obstacles in Taiwan and is seeking a breakthrough in a large ethylene plant it operates in China, said it had invested a further US$2 billion in production expansion at its Texas plant after FPG chairman William Wong (王文淵) visited it earlier this month.
However, the industrial conglomerate said its new investment in the US was simply recapitalization of its US subsidiary and was not an indication that the company is pulling out of Taiwan.
On Monday, FPG confirmed that Wong met with Texas Governor Rick Perry during his visit and that the investment was mentioned in that meeting. New ethylene and propylene plants will be built in Texas, where energy costs are low thanks to abundant shale oil resources, it added.
Additional reporting by Bloomberg
Dutch brewing company Heineken NV yesterday said that it has reached an agreement to acquire a subsidiary brewery of Taiwan’s Sanyo Whisbih Group (三洋維士比集團). Heineken is to assume majority ownership and management rights of the Long Chuan Zuan Co (龍泉鑽興業) brewery in Pingtung County’s Neipu Township (內埔), the Dutch company said. It would become the first multinational brewing company to operate brewery in Taiwan once the acquisition is completed. The deal has been approved by the Ministry of Economic Affairs’ Investment Commission, but details of the financial transaction cannot be disclosed at this time, as terms of the settlement have not been completed,
LOOK WHO OWES: China’s exposure to Taiwanese banks was the second-largest, with Luxembourg third, followed by Hong Kong and Japan, the central bank said The US remained the largest debtor country to Taiwan’s banking sector for a 27th consecutive quarter in the first quarter of this year, with its exposure rising 8.3 percent from a quarter earlier on the back of an increase in US bonds, the central bank said on Friday. Data compiled by the central bank showed that outstanding international claims by Taiwanese banks on a direct risk basis to the US stood at US$125.38 billion as of the end of March. Department of Financial Inspection deputy head Pan Ya-hui (潘雅慧) said that the US Federal Reserve’s launch of a rate hike cycle in
GREEN CITY: The company is set to invest US$8 billion to make electric vehicles and batteries for a new city that would rely entirely on renewable energy sources Indonesia said that Hon Hai Precision Industry Co (鴻海精密) is considering investing in the country’s new capital city, a move that would bolster the US$34 billion construction project. Hon Hai, which is known as Foxconn Technology Group (富士康科技集團), is looking at setting up an electric bus system and an Internet of Things network at Nusantara, as Indonesia’s new capital is to be called, Indonesian Minister of Investment Bahlil Lahadalia said in a statement yesterday. Hon Hai chairman Young Liu (劉揚偉) met with Indonesian President Joko Widodo on Saturday to discuss the company’s plan to invest US$8 billion to build a manufacturing plant
WHOLLY OWNED SUBSIDIARY: Costco Wholesale said it expected the purchase of the remaining 45 percent stake to add 1 to 1.5 percent to its earnings per share US-based Costco Wholesale Corp on Thursday said that it had purchased the remaining 45 percent stake in Costco President Taiwan Inc (台灣好市多) for US$1.05 billion, making the local company a fully-owned unit. “We estimate that the purchase would add about 1 to 1.5 percent to [our] earnings per share,” Costco said in a statement. Costco President Taiwan was established as a joint venture with Kaohsiung-based President Group (大統集團), which held a 45 percent stake. Since the first Costco store opened in Kaohsiung in 1997, 14 outlets have been set up in Taiwan, company data showed. PROFITABLE Three Costco stores in Taiwan — in Taipei’s Neihu