Formosa Chemicals & Fibre Corp (台灣化學纖維) yesterday reported a 2.9 percent monthly decline in revenue for last month, as production dropped after several plants started annual maintenance earlier than scheduled.
That made Formosa Chemicals the only one among Formosa Plastics Group’s (台塑集團) four major companies to report a monthly fall in revenue.
The firm posted NT$20 billion (US$666.62 million) in sales last month, which also represented a 14.7 percent drop from a year ago, a company statement showed.
Formosa Chemicals produces aromatics and styrenics used in the production of nylon, housewares, construction materials, food packaging and electronic parts.
“One of the company’s aromatics plants started annual repair ahead of schedule, as the group’s Mailiao [麥寮] petrochemical complex in Yunlin County faced power system problems on June 20,” company president Hong Fu-yuan (洪福源) told a press conference.
The incident also delayed the restart of a polypropylene (PP) plant, which overall reduced revenue by NT$2.04 billion, Hong said.
However, a sales rebound on other products, such as purified terephthalic acid (PTA), softened the decline in last month’s sales, he added.
Meanwhile, Formosa Plastics, the group’s flagship company, reported NT$14.54 billion in sales last month, up 17.7 percent from NT$12.35 billion in June, but still down 14.4 percent from the previous year.
Formosa Plastics president Jason Lin (林健男) attributed the revenue increase to restocking by major clients, which drove up sales of polyvinyl chloride (PVC) and polyethylene (PE).
Nan Ya’s revenue edged up 1.3 percent to NT$14.75 billion last month and gained 4.1 percent from a year ago, as rising global crude oil prices lifted the prices of its major products, president Wu Chia-chau (吳嘉昭) said.
Formosa Petrochemical president Tsao Mihn (曹明) said the recent increase in global prices of crude oil and olefin products boosted the company’s revenue last month by 18.4 percent from a month ago to NT$62.97 billion, but it was still down 18.2 percent from a year earlier.
Formosa Plastics, Nan Ya and Formosa Petrochemical expected revenue in the third quarter to rise sequentially on the back of steadier supply-and-demand conditions.
However, Formosa Chemicals said third-quarter revenue would be lower than that in the second quarter, given weak sentiment in downstream markets for polyester.