Formosa Chemicals & Fibre Corp (台灣化學纖維), which produces aromatics and styrenics, is expected to report a decline in revenue for this quarter from last quarter’s NT$110.82 billion (US$3.69 billion), as raw material supply is expected to diminish, a company executive said.
The firm’s raw material supplier, Formosa Petrochemical Corp (台塑化), plans to conduct annual maintenance on one of its ethylene plants.
Formosa Petrochemical, the nation’s only listed oil refiner and a major unit of the Formosa Plastics Group (台塑集團), shut down its third olefin plant, beginning yesterday, for a 45-day maintenance cycle. The closure was announced by Formosa Petrochemical president Tsao Mihn (曹明) on Thursday.
Tsao said the ethylene shipments from the plant would decline by 20 percent this month from a month ago and be down by one-third next month from last month.
However, having completed annual maintenance for its oil refinery facilities in June, Formosa Petrochemical will still strive to post a revenue increase this quarter from NT$219.56 billion last quarter, it said.
“We will try to hold our profit this quarter steady compared with NT$6.41 billion a quarter earlier,” Tsao said.
The company’s utilization rate for its oil refinery facilities is expected to be 100 percent this quarter, which would increase its oil production to close to 540,000 barrels a day this quarter, up from 377,000 barrels a day last quarter, it said.
Formosa Chemicals & Fibre, another major unit of the group, said it also is to conduct maintenance for its factory for making paraxylene and oxylene for 45 days beginning next month to cope with the reduced supply for ethylene, and for another factory for making styrene monomer for 45 days, company general manager Hong Fu-yuan (洪福源) told reporters on Thursday.
As a result, between next month and October, the company’s shipments for paraxylene and oxylene are likely to drop by 200,000 tonnes, while shipments for styrene monomer is expected to decline by 90,000 tonnes, Hong said.
Formosa Chemicals & Fibre expects revenue to drop 10 percent, to NT$25 billion, compared with last month and that the decline would extend into next month and October.
Also affected by the scarcity of ethylene, Formosa Plastics Corp (台塑公司), the flagship company of the group, expects its factory utilization to drop to 80 percent this quarter, from 85.3 percent last quarter, company president Jason Lin (林健男) said.
However, it still hopes that this quarter’s revenue would be flat, echoing NT$59.03 billion last quarter, on the back of higher product prices.
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