The Ministry of Economic Affairs yesterday conditionally approved seven Taiwanese petrochemical companies’ application to invest US$263.62 million building naphtha crackers in China.
The approval came after the Cabinet in October eased regulations and gave a green light for local petrochemical companies to invest across the Taiwan Strait.
The ministry said it had approved USI Corp (台聚) and six other companies’ application to establish a joint venture, Gulei Petrochemical Co (古雷石化), with their Chinese partners to produce seven products including ethylene, propylene and 1,3-butadiene.
However, the seven Taiwanese firms — which also include Ho Tung Chemical Corp (和桐化學), LCY Chemical Corp (李長榮化學) and China Petrochemical Development Corp (中石化) — must report to the government the progress of their Chinese investment from next year through 2019, the ministry said.
“The applicants are required to report to the government about their business operation on an annual basis and make sure to fulfill their promises such as shipping high-value products back to their home country,” the ministry said in a statement.
Other conditions include advanced research and development and high-value products they will make in Taiwan, according to the ministry.
“The most important thing is to make sure ownership of the joint venture is secured by Taiwanese firms,” a government official said yesterday on condition of anonymity.
According to officials familiar with the matter, the seven Taiwanese companies are required to ship a certain amount of ethylene back to Taiwan to help solve the country’s ethylene supply shortage problem in the future.
They will also be required to inform the government about the composition of Gulei Petrochemical’s board of directors and their shareholding structure.
China set up the “Gulei Port Economic Development Zone” in 2003 in Zhangzhou, Fujian Province, mainly to attract petrochemical companies from Taiwan.
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