Formosa Plastics Group (FPG, 台塑集團), the nation’s largest industrial group, yesterday said that it plans to invest US$500 million in Vietnam’s Dong Nai Province to expand its textile and plastics production capacity, eyeing the possible zero-tariff treatment for the nation’s exports after Vietnam joins the Trans-Pacific Partnership (TPP).
The group is to spend US$100 million to build a factory capable of making 200,000 tonnes of polystyrene a year in what would be the group’s first factory in Vietnam, Hong Fu-yuan (洪福源), president of Formosa Industries Corp (台灣興業), a subsidiary of the group, told reporters yesterday.
Hong said the investment will begin after the group completes the necessary application procedure.
After the factory is built, the group will sell the product to companies making home appliances and electronics in Vietnam as there is a cluster of electronic companies nearby, Hong said, adding that the group will ship raw styrene monomer from Taiwan.
The group is to immediately invest US$100 million to build a cogeneration power plant in Vietnam to provide electricity for its plants and another US$100 million to increase the capacity of its yarn-making factory to 400,000 spindles a year from 320,000 spindles a year, Hong said.
The group just invested US$100 million to double the capacity of its polyester fibers factory and another US$100 million to build the third production line of its biaxial oriented polypropylene film factory, Hong said. The product is used to make tapes, wraps for gifts and flowers and for other industrial uses.
Formosa Chemicals & Fiber Corp (台灣化纖), one of the main units of the group that produces aromatics and styrenics, holds a 42.5 percent stake in Formosa Industries Corp, while Nan Ya Plastics Corp (南亞塑膠), the nation’s largest plastics manufacturer and another main unit of the group, holds another 42.5 percent stake, Hong said.
Formosa Taffeta Co (福懋興業), a textile subsidiary of the group, holds a 10 percent stake, while local drink maker King Car Group (金車) holds 5 percent, Hong said.
From January through last month, Formosa Industries Corp posted revenue of NT$20.7 billion (US$703.78 million) and the company is expected to generate NT$24 billion this year, according to Formosa Chemicals & Fiber.
Last year, Formosa Industries Corp registered revenue of NT$23.8 billion and profit of NT$166.21 million, Formosa Chemicals & Fiber said.
In a related news, Mai-Liao Power Corp (麥寮汽電), a subsidiary of the group, was fined NT$1.82 billion by the Fair Trade Commission on Tuesday for conspiring with eight other independent power producers against price renegotiation with Taiwan Power Co (Taipower,台電).
The commission decided to lower the fine for the nine companies to NT$6.05 billion from the NT$6.32 billion it had previously set after these power producers filed an appeal to the Cabinet.
The nine companies will receive official documents detailing the fine in a week and they can file an appeal to the Cabinet commission within a month of receiving the documents.