China Petrochemical Development Corp (CPDC, 中石化), which makes caprolactam and acrylonitrile, estimated that its losses resulting from the explosions in Greater Kaohsiung last week would be about NT$47 million (US$1.57 million).
The company expects its revenue to drop by NT$36 million, as the production of acrylonitrile declines because of a lack of propene, a raw material used to make the plastic precursor, according to its filing with the Taiwan Stock Exchange on Saturday.
“The utilization rate of our factory is down to 85 percent from 100 percent and we are trying to buy more trucks able to transport tanks to replace our pipelines at the explosion site,” CPDC vice president Yu Chien-sung (余建松) said by telephone yesterday.
Yu said the company’s utilization rate would return to its normal level by the end of this week.
Sales of acrylonitrile accounted for 35 percent of its revenue of NT$35.31 billion last year, while sales of caprolactam accounted for 65 percent, the company said.
On top of the NT$36 million loss in production of acrylonitrile, the company also lost propene valued at NT$11 million because of the explosions, Yu said.
In the cleanup effort, the company contracted with state-run oil refiner CPC Corp, Taiwan (CPC, 台灣中油) to clear the remaining propene in its pipelines at the explosion site, and CPC had emptied the liquid form of propene yesterday, Yu said.
Yu said the pipelines in the explosion site might not be able to resume operation in the near future as the government and companies have to come up with appropriate management policies and information-sharing mechanisms before that.
Commenting on allegations that the company did not inform the Greater Kaohsiung Government in time that there was still propene remaining in its pipelines at the site, Yu said the company did tell the city government when officials of the company and the city government were examining these pipelines after the incident, and Greater Kaohsiung’s Environmental Protection Bureau also inspected the company’s records, which contain related information.
The company reported revenue of NT$17.15 billion from January through June, up 0.89 percent from the NT$17 billion seen the previous year.
SinoPac Securities Co (永豐金證券) forecast that the company would register revenue of NT$35.7 billion this year, up 1 percent from NT$35.31 billion last year, while it would report losses of NT$890 million, or NT$0.38 per share, this year, down from losses of NT$1.43 billion, or NT$0.62 per share, the previous year.
“Because the price of ammonia, a raw material for both caprolactam and acrylonitrile, dropped to about US$520 per tonne to US$580 per tonne in the middle of this year from US$700 per tonne in the beginning of last year, the company’s costs might not be under as much pressure as a year ago,” SinoPac analyst Matt Tsai (蔡毓誠) said in a research note on June 12.
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