Two major units of Formosa Plastics Group (台塑集團), the nation’s largest industrial conglomerate, yesterday said they plan to spend a total of US$88 million on the group’s new ethylene plant in Louisiana.
The investment from Formosa Chemicals & Fibre Corp (台灣化學纖維) and Nan Ya Plastics Corp (南亞塑膠) is to fund an ongoing expansion plan for the group’s US unit, FG Inc, company filings with the Taiwan Stock Exchange said.
Delaware-based FG Inc, a fully owned subsidiary of Formosa Petrochemical Corp (台塑石化), operates FG LA LLC in Louisiana, which is building an ethylene cracker.
FG LA, which has paid-in capital of US$120 million, plans to raise US$100 million to cover the construction and design costs of the Louisiana project, which is undergoing an environmental assessment.
Through a capital injection of US$66 million and US$22 million respectively, Formosa Chemicals is to take a 30 percent stake and Nan Ya is to take a 10 percent stake in FG LA, while Formosa Petrochemical would hold 57 percent.
Formosa Taffeta Co (福懋興業), the conglomerate’s arm that operates its textile business, would own the remaining 3 percent stake in FG LA with an investment of US$6.6 million, the group said.
The group would not consider raising more money in the near term, an official told a news conference yesterday, adding that the Louisiana plan is expected to pass the environmental assessment next year at the earliest.
FG LA has acquired 321.15 hectares for US$34.65 million to build the new facility, a company statement said last month.
Formosa Petrochemical chairman Chen Bao-lang (陳寶郎) said that the Louisiana plant is scheduled to begin construction in 2020 and start production in 2022, the Chinese-language Economic Daily News reported earlier this year.
The cracker is to be capable of producing 2.4 million tonnes of ethylene per year after the first phase of construction is completed in 2024, newspapers said.
The group is planning to build more plants in the state to produce other petrochemicals, such as propane dehydrogenation and ethylene glycol, eyeing abundant shale oil there.
Total investment in Louisiana is expected to be about US$9.4 billion, Formosa Petrochemicals said.
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