Formosa Plastics Corp (FPC, 台塑) and Nan Ya Plastics Corp (南亞塑膠) yesterday said an order from the Yunlin County Government last week to close six petrochemical plants in the county after a series of fires would lead to heavy financial losses.
Nan Ya said in a filing to the Taiwan Stock Exchange that closing five of its plants would generate losses of NT$8.4 million (US$291,400) per day, while FPC said it would suffer losses of NT$26 million per day.
The remarks came after FPC yesterday sent representatives to the county government, after it ordered the shutdown from June 1 over safety concerns.
FPC called on the county government to postpone the shutdown, saying not all of the plants had safety issues.
The firms sought a compromise or leniency with the county government, saying that the suspension of so many plants at the same time could deal a heavy blow to the petrochemical sector.
However, the county government said that postponing the shutdown was not possible because public safety was more important than economic development.
After the order, Nan Ya’s shares plunged 5.5 percent to close at NT$77.3 in Taipei trading yesterday, while FPC’s shares dipped 3.54 percent to NT$109.
In an unprecedented move, FPC was ordered on Friday to shut down its 12-hectare vinyl chloride (VCM) plant at the Mailiao (麥寮) petrochemical complex on June 1.
The plant produces polyvinyl chloride (PVC) and other plastic materials.
The county government also told Nan Ya to shut down its 50-hectare Haifeng (海豐) factory compound on the same date.
The Haifeng compound houses five production lines that churn out a number of key textile materials and petrochemical intermediaries, including 1,4 butylene glycol (BG), ethylene glycol (EG) and bisphenol A (BPA).
The plants in question should remain closed until the county government and the Council of Labor Affairs decide that safety measures have been adequately improved, Yunlin County Commissioner Su Chih-fen (蘇治芬) said on Friday.
The county government issued the unusually harsh penalty to FPC after two fires at the group’s Mailiao complex on May 12 and May 18.
FPC executives were caught off-guard by the county government’s decision and said the punitive move would deal a serious blow to the downstream petrochemical industry, with the textile sector taking the brunt of the impact.
FPC’s VCM plant produces 800,000 tonnes of petrochemical materials a year. The plant has been closed since the May 12 fire. Its shutdown will affect Nan Ya’s operations because VCM is an important ingredient in the production of PVC and many other plastic materials.
Nan Ya is the world’s fourth-largest EG producer, with its Mailiao and Haifeng factories churning out 180 tonnes of the chemical annually.
Some sections of a Nan Ya plant in the Mailiao complex have suspended production since the May 12 fire pending safety inspections, but the Haifeng compound’s shutdown would affect global EG supply and deal a drastic blow to the downstream synthetic fiber industry, market analysts said.
Nan Ya’s monthly sales could drop by between NT$8 billion and NT$10 billion because of the Haifeng complex closure, they said.
Additional reporting by staff writer
US PROBE: The Information reported that the US Department of Commerce is investigating whether the firm made advanced chips for China’s Huawei Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract maker of advanced chips, yesterday said it is a law-abiding company, and is committed to complying with all applicable laws and regulations including export controls. The Hsinchu-based chip giant issued the statement after US news Web site The Information ran a story saying that the US Department of Commerce has launched a probe into TSMC over whether it breached export rules by making smartphone or artificial intelligence (AI) chips for China’s Huawei Technologies Co (華為). “We maintain a robust and comprehensive export system for monitoring and ensuring compliance,” the statement said. “If we
DEMAND FOR AI CHIPS: Net income in the third quarter surged 31.2% quarter-on-quarter to NT$325.26 billion, the strongest quarterly return in the company’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday raised its revenue forecast to annual growth of 30 percent this year, thanks to strong and sustainable demand for artificial intelligence (AI) processors for servers. It was the second upward adjustment from 25 percent year-on-year growth estimated three months ago, despite recent concerns about whether the AI boom could be another technology bubble. “The demand is real. It’s real. And I believe it is just the beginning of this demand. Alright, so one of my key customers said the demand right now is ‘insane,’” TSMC chairman and chief executive C.C.
Starbucks Corp might have the more recognizable name, but 7-Eleven’s City Cafe remains the king of Taiwan’s fresh coffee market, helped by the convenience store chain’s extensive market presence and product diversification. President Chain Store Corp (PCSC, 統一超商), which runs both the 7-Eleven and Starbucks store chains in Taiwan, established the City Cafe brand in 2004. The brand took off when actress Gwei Lun-mei (桂綸鎂) became its spokesperson in 2007. City Cafe’s sales exceeded NT$10 billion (US$311.69 million) for the first time in 2015, surpassing the revenue of Starbucks Taiwan, and rose to more than NT$17 billion last year, exceeding the NT$14.98
COUNTRY-BASED: Setting ceilings on sales of the technology would tighten limits that originally targeted China’s ambitions in artificial intelligence amid security risks US officials have discussed capping sales of advanced artificial intelligence (AI) chips from Nvidia Corp and other American companies on a country-specific basis, people familiar with the matter said, a move that would limit some nations’ AI capabilities. The new approach would set a ceiling on export licenses for some countries in the interest of national security, according to the people, who described the private discussions on condition of anonymity. Officials in the administration of US President Joe Biden focused on Persian Gulf countries that have a growing appetite for AI data centers and the deep pockets to fund them, the people