The four main units of Formosa Plastics Group (台塑集團), the nation’s largest industrial conglomerate, yesterday reported declining sales for last month.
Formosa Plastics Corp (台塑), the nation’s largest producer of polyvinyl chloride (PVC), said that revenue for last month slid 8.2 percent from March to NT$16.55 billion (US$548.6 million), mainly due to slowing demand from China.
However, on an annual basis, revenue last month rose 8.8 percent, bolstered by better product prices, the company said.
“China’s tighter capital controls have lowered demand [for petrochemical products] from small and medium-sized enterprises there,” Formosa Plastics president Jason Lin (林健男) told an earnings conference.
Shipments of PVC last month decreased 25,000 tonnes from March, according to a company statement.
Several downstream Chinese customers are also facing challenges caused by stricter environmental regulations, making them more hesitant to build inventory, Lin told reporters.
Despite declining sales in China last month, Formosa Plastics said it expects sales for this quarter to grow sequentially, as it is entering the peak season.
The company has also set a utilization rate target of more than 90 percent this quarter, compared with last quarter’s 88 percent.
Formosa Chemicals & Fibre Corp (台灣化學纖維), which produces aromatics and styrenics, saw its sales decline 6.4 percent from March, but increase 2.8 percent from a year earlier to NT$27.6 billion.
“Two major factories went through regular maintenance last month, lowering the total capacity over the period,” Formosa Chemicals vice chairman Hong Fu-yuan (洪福源) said.
Falling prices for the company’s key products — p-xylene and o-xylene — also dragged down sales last month, he said.
Nanya Plastics Corp (南亞塑膠), the nation’s largest plastics manufacturer, saw its revenue drop 5.9 percent to NT$24.3 billion on a monthly basis, but increase 2.7 percent from the previous year.
Nanya attributed the decline to slumping oil prices.
Formosa Petrochemical Corp (台塑石化), the nation’s only listed oil refiner, saw its sales decrease 16.8 percent monthly and 1 percent annually to NT$42.27 billion, company data showed.
Overall, the group saw its revenue last month drop 10.8 percent from NT$124.1 billion to NT$110.7 billion on a monthly basis, but rise 2.1 percent from a year earlier.
Cumulative sales during the first four months of the year increased 16.3 percent from NT$416.9 billion to NT$484.92 billion a year ago, data showed.
Shares of Formosa Plastics, the group’s flagship unit, rose 0.56 percent to NT$90.50 in Taipei trading yesterday before the earnings announcement, surpassing the benchmark TAIEX, which edged up 0.38 percent to 9,937.25 points.
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