Formosa Chemicals & Fibre Corp (台灣化學纖維), one of the four main units under the Formosa Plastics Group (FPG, 台塑集團), yesterday said that revenue was expected to fall by at least 10 percent this month from last month over falling prices and factory maintenance.
Although the third quarter of a year is a peak season for the producer of aromatics and styrenics, prices for its products — including purified terephthalic acid and paraxylene — are sliding because of lower demand and slumping crude oil prices, Formosa Chemicals president Hong Fu-yuan (洪福源) said in a press conference.
With lower demand from downstream companies, the utilization rate for the firm’s Chinese factories for purified terephthalic acid is currently just 53 percent, while that for its polyester factories in China is about 70 percent, Hong said.
“It is still difficult for our downstream companies to acquire funds in China, making them unable to replenish their inventories before the long holidays in China starting on Oct. 1 as usual,” he said.
The firm plans yearly maintenance for its paraxylene and oxylene factories for a 45-day stretch starting on Monday, after a styrene monomer factory began a 45-day maintenance on Monday last week, Hong said. The processes would temper revenue, he added.
Hong said he is conservative on the outlook for this month and next month and expects revenue for this quarter to be lower than the NT$110.82 billion (US$3.7 billion) recorded last quarter.
As for next quarter, revenue is expected to be flat from this quarter, Hong said, adding that he expects revenue for the whole year to maintain last year’s level of NT$428.29 billion.
The company’s operating profit this quarter is likely to be higher than the NT$3.47 billion last quarter, while it would post a sequential decline next quarter from this quarter because of price slides and maintenance expenses, he said.
Three other units of the group also saw monthly revenue slip.
Formosa Plastics Corp (台塑), the nation’s largest producer of polyvinyl chloride, reported revenue of NT$18.24 billion last month, down 8.6 percent from NT$19.95 billion a month ago and 2 percent from NT$18.61 billion a year ago.
Formosa Petrochemical Corp (台塑石化), the nation’s only listed oil refiner, posted revenue of NT$77.81 billion last month, down 12.7 percent from NT$89.16 billion a month ago and 9.8 percent from NT$86.23 billion last year.
Nan Ya Plastics Corp (南亞塑膠), the nation’s top plastics maker, registered revenue of NT$28.18 billion, down 4.9 percent from NT$29.63 billion the previous quarter and down 4.4 percent from NT$29.46 billion last year.
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