Mon, May 13, 2019 - Page 15 News List

Four big Formosa Group units’ revenues take a hit

By Kwan Shin-han  /  Staff reporter

Four major Formosa Plastics Group (FPG, 台塑集團) units’ revenues for last month fell from a year earlier, with Formosa Chemicals & Fibre Corp (台灣化纖) reporting the largest decline following an industrial incident early last month.

Formosa Chemicals, which manufactures and sells integrated plastic and nylon products, saw revenue drop 12.6 percent annually to NT$28.94 billion (US$934.8 million), a 9.8 percent monthly decline.

“The accident at our No. 3 aromatics plant, and the periodic inspections on our phenol synthesis plant, No. 1 aromatics plant and No. 3 styrene monomer plant lowered our output and resulted in a decline in revenue last month,” Formosa Chemicals vice chairman Hong Fu-yuan (洪福源) said last week.

Prices of plastic materials, such as acrylonitrile butadiene styrene, purified terephthalic acid, and p-xylene, remain high this quarter, while other products have lower prices than a year earlier, Hong said.

He said that as the No. 1 and No. 3 aromatics plants, as well as the No. 3 styrene monomer plant, would remain closed this month, revenue would continue falling.

“We expect revenue for this quarter to be lower than last quarter,” Hong said.

The No. 3 aromatics plant in Yunlin County’s Mailiao Township (麥寮) has been shut since an explosion on April 7. It is expected to partly restart operations early next month and hopes to reach 50 percent of regular p-xylene and 60 percent of benzene production, the company said.

It is expected to be fully operational by August after passing safety inspections, the company added.

Formosa Petrochemical Co (台塑石化), the group’s oil refining subsidiary, reported a 11.2 percent annual decline in revenue, down 4.2 percent monthly to NT$52.53 billion.

The company’s refinery and olefins businesses also suffered last month, and shipments of refined petroleum products decreased to 13,812 barrels, from 14,425 barrels in March.

Formosa Petrochemical president Tsao Minh (曹明) attributed the drop in refinery sales to falling product prices and shipment delays, while the below-average selling prices of olefin products and regular inspections of its downstream clients’ factories resulted in the decrease in revenue of its olefins business, he added.

“Our capacity utilization rate is expected to reach 94 percent this quarter, compared with 88 percent last quarter,” Tsao said, adding that he expects the company to post a steady profit this quarter.

Formosa Plastics Corp (FPC, 台塑), which makes intermediate raw materials for plastics such as polyvinyl chloride (PVC) and vinyl chloride, saw revenue dip 1.8 percent annually, but increase 2.7 percent monthly to NT$19.29 billion.

FPC president and chairman Jason Lin (林健男) said the monthly increase reflected higher sales of PVC products and lower sales in March, when the company conducted annual maintenance of its acrylonitrile (AN) and methyl methacrylate plants.

Prices of AN and PVC are expected to rise this quarter due to a supply shortage and rising costs, respectively, and growing demand for these products as well as a higher utilization rate are to boost this quarter’s revenue, he said.

The utilization rate is estimated to reach 95 percent this quarter, from 90 percent last quarter, he said.

As for Nan Ya Plastics Corp (南亞塑膠), which makes plastics products, chemicals, electronic materials, revenue dropped 10.1 percent annually, but rose 0.4 percent monthly to NT$25.07 billion.

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