Formosa Plastics Corp benefits from Chinese demand

By Camaron Kao  /  Staff reporter

Tue, Jul 09, 2013 - Page 14

Formosa Plastics Corp (FPC, 台塑), the flagship unit of Formosa Plastics Group (FPG, 台塑集團), yesterday posted a sequential double-digit revenue increase for last quarter as demand increased following the turnover in the Chinese Communist Party leadership near the end of last year.

The company, the nation’s largest producer of polyvinyl chloride, said revenue rose 21.13 percent to NT$56.29 billion (US$1.87 billion) last quarter from NT$46.47 billion a year ago, up 12.49 percent as well from the NT$50.04 billion it posted the previous quarter.

A company official, who declined to be named, attributed the double-digit year-on-year increase to a low base of comparison for last year, when the company was instructed by the Ministry of Economic Affairs to conduct safety inspections at its factories.

“Regarding the quarter-on-quarter increase, it occurred because our Chinese clients were waiting for the leadership transition in China to complete before they placed their orders,” the official said by telephone.

Nan Ya Plastics Corp (南亞塑膠), the nation’s largest plastics maker and another FPG unit, reported revenue of NT$74.03 billion for last quarter, compared with NT$74.2 billion a year ago and NT$74.27 billion a quarter ago, according to the company’s filing to the Taiwan Stock Exchange.

“Demand for electronics components in China was weaker in the first half of the year, leading to an annual decline [in revenue],” Nan Ya chairman Wu Chia-chau (吳嘉昭) said yesterday.

Wu said sales of electronics components are likely to be better in the second half of this year as Christmas approaches and companies ramp up production.

Meanwhile, Formosa Petrochemical Corp (台塑石化), the nation’s only listed oil refiner, said its revenue fell 2.98 percent to NT$200.48 billion last quarter from NT$206.46 billion a year ago and 19.1 percent lower than the NT$247.82 billion it posted the previous quarter.

Company spokesman Lin Keh-yen (林克彥) attributed the declines to annual maintenance from March to last month and the recent drop in global oil prices, adding that the company’s outlook remains bleak.