Taiwanese petrochemical giant Formosa Plastics Group (FPG, 台塑集團) plans to spend more than US$2 billion to expand its complex in China, a report said yesterday.
FPG chairman William Wong (王文淵) said the US$2.3 billion petrochemical project in the coastal city of Ningbo, Zhejiang Province, had passed the Chinese government’s environmental impact evaluation.
“It is likely to get the mainland authorities’ approval before the year’s end, with the construction being completed by 2012,” Wang told reporters during the conglomerate’s annual sports gathering in Taipei on Saturday, the Chinese-language Economic Daily News said.
Hong Fu-yuan (洪福源), president of FPG subsidary Formosa Chemicals and Fibre Corp (台灣化纖), told Bloomberg Newswires on Thursday that the Ningbo project had passed China’s environmental assessment.
START DATE
Hong said the project would start construction next year and he expected it to be completed in three years, Bloomberg reported.
After the project is completed, China is expected to account for 15 percent of the company’s annual revenues, almost double the present 7.8 percent, the Economic Daily News said.
OVERSEAS EXPANSION
The project, which still needs approval from the Taiwanese government, is part of FPG’s overseas investment plans totaling up to NT$340 billion (US$11.2 billion) in three years, including expansion of its ethylene and propylene operations in the US, and the construction of a steel mill in Vietnam for US$7.8 billion.
The proposed expansion of FPG’s ethylene and propylene plants in Texas — for which the group expects to spend between US$800 million and US$1 billion — are expected to begin construction in 2012 at the earliest and start mass production in 2014, the Chinese-language Apple Daily and Commercial Times newspapers quoted Lee Chih-tsuen (李志村), a member of FPG’s executive board, as saying.
The group has also hired former vice premier Lin Hsin-i (林信義) to chair the Vietnamese steel mill project, the newspapers quoted Wong as saying.
FPG has secured approval from Vietnamese authorities to build the steel complex with annual production capacity of 7.5 million tonnes in the first phase of development.
The project is likely to begin construction next February and will begin production in 2014 to supply Vietnamese as well as regional markets, the reports said.
Separately, Wong said he expected the prices of global crude oil to reach US$85 per barrel next year on average, up from this year’s levels of between US$70 and US$80, Apple Daily and Commercial Times also said.
While the crude prices might reach US$100 per barrel in the short term buoyed by the market’s ample liquidity and expectations of rising demand, prices are not expected to surge to the record high of US$147 registered in July 2008, the newspapers cited Wong as saying.
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