Industrial conglomerate Formosa Plastics Group (FPG, 台塑集團) is planning to build petrochemical plants and naphtha crackers in Gulei, in China’s Fujian Province, eyeing its proximity to the Chinese market, an official said yesterday.
“China has a large market for petrochemical products and we need to provide raw materials for our petrochemical plant in Ningbo, China,” a Formosa Plastics Corp (FPC, 台塑) official said by telephone.
FPC, a flagship company of the group and the nation’s largest producer of polyvinyl chloride, is responsible for the project.
Local media reported on Sunday that the total investment in Gulei would be US$13 billion.
The official, who declined to be named, did not confirm the figure, saying that the investment project is still at a very early stage and will require approval from Taipei and Beijing.
The company would like to produce ethylene and propene, and to conduct naphtha cracking in Gulei, if regulators on both sides of the Taiwan Strait approve, he said.
Currently, the government still prohibits Taiwanese companies from investing in naphtha crackers in China, the official said, adding that the company hopes the government would ease the restriction in the near future.
Taiwanese companies and Chinese companies in Fujian would each provide 50 percent of the funds for the planned investment project, the official said.
In view of the large size of the investment, the group will also invite other Taiwanese investors to join the initiative, he said.
FPC will not be the only company under the group to participate in the project because it will require the technologies of other FPG units to manufacture all the desired products in Gulei, he said.
Formosa Plastics Corp posted NT$50.04 billion (US$1.69 billion) in revenue for the first three months of the year, down 5.97 percent from the NT$53.22 billion posted a year ago because of lower product prices and demand, the official said.
The outlook for this quarter would depend on the volatility of global oil prices, he said.
FPC shares fell 1.66 percent to NT$71 yesterday, underperforming the TAIEX, which rose 0.1 percent.