Formosa Plastics Group (FPG, 台塑集團), the nation’s largest industrial conglomerate, yesterday said aggregate sales of its four main companies last month increased from the previous month but were still lower than a year ago.
The group’s four major units — Formosa Petrochemical Corp (台塑石化), Formosa Plastics Corp (台灣塑膠), Formosa Chemicals & Fibre Corp (台灣化學纖維) and Nan Ya Plastics Corp (南亞塑膠) — saw their combined sales grew 6.7 percent to NT$119.26 billion (US$3.64 billion) from September on the back of increased shipments to India and China, and slight gains in international oil prices during the period.
The figure dropped 22.9 percent from October last year as crude oil prices plunged from a year ago.
Share prices for the conglomerate’s four main units saw a decline of about 2 percent in Taipei trading yesterday, compared with the market’s 1.77 percent decline.
Formosa Petrochemical led the four units in terms of monthly gains, with sales rising 16.2 percent to NT$53.57 billion last month, followed by Formosa Plastics’ 3.6 percent sequential gain to NT$16.59 billion and Formosa Chemicals’ 0.4 percent gain to NT$25.92 billion, while Nan Ya Plastics saw its sales fall 2.6 percent from the previous month to NT$23.18 billion.
Formosa Petrochemical attributed last month’s gain to a slight increase in Dubai crude prices, which rose US$0.4 to US$45.8 per barrel, while robust demand drove ethylene prices up to US$669 per tonne — US$25 higher than August’s prices — in addition to fulfilling shipments delayed by Typhoon Dujuan.
Formosa Plastics said sales rose last month as the monsoon season ended in India and clients began replenishing inventories, and Formosa Chemicals attributed its monthly sales increase to rising orders from China. Nan Ya Plastic blamed its lagging performance on weakening reinvestment gains due to tepid demand for mobile devices and personal computers.
“Amid a shift in the Chinese economy toward greater reliance on consumption and the service industry, rising wages and continued fiscal easing policies are expected to drive up demand for petrochemical products,” Formosa Plastics chairman Jason Lin (林健男) said in a joint earnings conference, adding that shipments in India are expected to be boosted by the expansion in infrastructure developments announced by its government.
Yuanta Securities Investment Consulting Co (元大投顧) forecast a general improvement in the refinery sector, with strong seasonal demand anticipated to take shape in the fourth quarter.
Credit Suisse Group AG said the conglomerate has been shifting investments away from Asia and stepping up its expansion in the US, motivated by low-priced shale gas supplies there.
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