Formosa Plastics Group’s (FPG, 台塑集團) four main units yesterday said they expected next year’s outlook to be flat or slightly weaker than this year because the global economy is still sluggish.
The companies also said they were decreasing their dependence on the Chinese market and would instead pay attention to other emerging markets.
The four main units are Formosa Plastics Corp (台塑), Formosa Petrochemical Corp (台塑石化), Formosa Chemicals & Fibre Corp (台灣化纖) and Nan Ya Plastics Corp (南亞塑膠).
The group's four major units posted a combined consolidated revenue of NT$137.67 billion (US$4.73 billion) last month, up 3.2 percent from a month ago and a 4.3 percent increase year-on-year.
Formosa Plastics chairman Jason Lin (林健男) said that the European debt crisis still remained a threat, reducing the the global economy’s momentum.
More factories are going to complete their annual repairs, increasing the supply of plastic products, according to Lin.
Furthermore, Lin said the market in China has not yet recovered to its previous level, causing the prices of plastic products to remain low. As a result, he did not expect the company’s revenue to increase significantly in the near future.
Formosa Plastics posted NT$14.78 billion in sales last month, up 3.8 percent from both a month ago and a year ago.
Nan Ya chairman Wu Chia-chau (吳嘉昭) said that he would feel grateful if the economic condition did not deteriorate further, and he did not know when the economy would start to improve.
Wu said the company’s EG-1 factory would start its annual repairs this month, decreasing production capacity.
Furthermore, Wu said the market condition for electronic materials was dire, decreasing the profitability of the company. The company is thus expected to see lower revenue in the fourth quarter than in the third quarter.
Last month, the company reported NT$14.8 billion in sales, up 4.6 percent from a month earlier and 5.8 percent from the previous year.
Formosa Chemical chairman Hong Fu-yuan (洪福源) echoed Wu’s economic prospects, adding that the global economy had bottomed out and would not deteriorate further.
Hong said that he expected the company to obtain higher profits in the fourth quarter than the third quarter, while the production in February may decrease because of the Lunar New Year.
Formosa Chemicals posted NT$25.04 billion in sales last month, up 12.8 percent month-on-month and 31.1 percent year-on-year.
Meanwhile, Formosa Petrochemical general manager Tsao Mihn (曹明) said that the unstable situation in the Middle East would keep oil prices from decreasing. Thus, he expected oil prices to remain stable and the company to continue making a small profit from the market.
Sales were NT$83.03 billion last month, up 0.3 percent from October and 21 percent higher than the same period of last year, the company said.