Formosa Chemicals & Fibre Corp (FCFC, 台灣化纖) yesterday said Sunday’s explosion and fire at one of its factories in Yunlin County could cause an estimated loss of NT$1 billion (US$32.42 million) per month.
The Yunlin County Government on Sunday ordered the closure of FCFC’s No. 3 aromatics plant in Formosa Plastics Group’s (FPG, 台塑集團) naphtha cracker complex in Mailiao Township (麥寮) to allow for an investigation into the incident.
A preliminary report into the explosion found that it was triggered by a leak of liquefied petroleum gas (LPG) due to a corroded pipeline, the Ministry of Labor Affairs said yesterday.
The ministry’s Occupational Safety and Health Administration said it would increase the frequency of inspections at the plant.
The explosion was the 16th incident at the naphtha cracker complex since 2010.
A corroded pipeline on a high tower had gone undetected by inspectors, Formosa Chemicals vice chairman Hong Fu-yuan (洪福源) said.
The company would conduct a comprehensive inspection of its wiring systems and pipelines within a month, Hong said.
The main chemical compounds produced at the plant are benzene and its derivative p-xylene.
FCFC said in a regulatory filing that the halt in benzene production would not affect its revenue, because the output is for its own use, but it manufactures p-xylene for its own use and for sale, so the anticipated drop of 30,000 tonnes in p-xylene sales would cost it NT$1 billion per month.
Analysts said the loss could lead to a decrease of NT$0.17 in earnings per share for the company, news outlet Cnyes.com reported.
The settlements of insurance claims from owners of nearby homes and fish farms would have to wait until local authorities determine the scope of the affected area, the FCFC said.
FCFC reported cumulative revenue of NT$59.36 billion for the first two months of the year, a 6.96 percent decline compared with NT$63.8 billion for the same period last year. It reported a net income of NT$48.77 billion for last year, with an operating income of NT$38.35 billion. Earnings per share were NT$8.36.
FPG shares yesterday closed unchanged at NT$109 in Taipei trading.
In related news, Yunlin County Commissioner Chang Li-shan (張麗善) told a news conference that the county had set up the investigation and supervisory team to examine the incident.
She demanded a comprehensive inspection of the Mailiao complex and its pipelines and appealed to the central government to set up a national-level petrochemical disaster response center.
Additional reporting by CNA
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