Thu, Jun 21, 2018 - Page 12 News List

FPC’s US cracker to come online next year

By Kuo Chia-erh  /  Staff reporter

Formosa Plastics Corp (FPC, 台塑), the nation’s largest producer of polyvinyl chloride (PVC), yesterday said its new ethane cracker in the US would begin operations in the second quarter of next year.

“We also expect the construction of another US plant that makes high-density polyethylene to be completed in the first quarter of next year,” company president and chairman Jason Lin (林健男) told an annual shareholders’ meeting in Taipei.

Apart from continuing investments in the US, the company’s propane dehydrogenation plant in Ningbo, China, is scheduled to become operational in 2031, Lin said.

The company’s board in March approved a proposal to raise NT$10 billion (US$331.46 million) through the issuance of corporate bonds to fund its ongoing expansion projects in overseas markets.

FPC gave a relatively optimistic outlook for the rest of the year, saying that China’s stricter environmental standards would boost prices of its major products, such as PVC, sodium hydroxide and acrylate.

FPC, the second-largest PVC supplier in the world with an annual capacity of nearly 3.24 million tonnes, aims to sell 1.64 million tonnes of PVC products this year, up from 1.6 million tonnes last year.

Two shareholders at the meeting expressed concern over the environmental impact of the company’s Vietnamese joint venture, Formosa Ha Tinh Steel Corp (台塑河靜鋼鐵興業), but FPC officials declined to elaborate on the issue.

Formosa Plastics Group (台塑集團), FPC’s parent group, has a controlling stake of more than 70 percent in the Vietnamese steel mill, data showed.

Formosa Ha Tinh was slapped with a fine of more than US$500 million by the Vietnamese government in 2016 for polluting more than 200km of coastline in four provinces.

Shareholders approved plans to distribute a cash dividend of NT$5.7, the highest in seven years, based on last year’s record-high net profit of NT$49.38 billion, or earnings per share of NT$7.76.

Profit last year rose 25.36 percent from NT$39.39 billion a year earlier, while sales over the same period increased 14.73 percent to NT$206.71 billion from NT$180.17 billion, supported by higher product prices.

Gross margin was 16.19 percent last year, up from 13.49 percent in 2016, which the company partly attributed to continuous improvement in its production processes.

The cash dividend also translated into a 5.3 percent dividend yield based on the stock’s closing price of NT$107.5 yesterday.

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