Formosa Plastics Corp (台塑), the nation’s largest producer of polyvinyl chloride, expects its revenue next quarter to be higher than the estimated NT$59.03 billion (US$1.96 billion) it saw for this quarter, as the company should benefit from a higher utilization rate and larger capacity after its expansion is completed.
“The company’s utilization rate should rise to 93 percent next quarter from 81.3 percent this quarter, as Formosa Plastics is going to be able to acquire enough raw materials from its supplier Formosa Petrochemical Corp (FPCC, 台塑石化),” company president Jason Lin (林健男) said at a press conference on Tuesday last week.
The anticipated climb in output from Formosa Petrochemical comes as the oil refiner is scheduled to complete the 45-day annual maintenance of an olefin factory at the end of this month, Lin said.
Last month, Formosa Plastics’ revenue dropped 8.6 percent to NT$18.24 billion from the NT$19.95 billion recorded the previous month. Lin said NT$1.59 billion of the decline could be attributed to the temporary closure of part of its factory complex in Yunlin County’s Mailiao Township (麥寮), due to the annual maintenance of supplier Formosa Petrochemical which started on Aug. 15.
Three capacity expansion projects for Formosa Plastics’ Chinese production site in Ningbo City, Zhejiang Province, are also due to be completed next quarter, lending momentum to the revenue increase, Lin said.
The company’s factory in Ningbo should be able to make about 70,000 tonnes of polyvinyl chloride per year and is planned to be operational in November, while another factory in Ningbo that should be able to make 200,000 tonnes of acrylic ester is to be operational next month, Lin said.
The company’s factory with an estimated capacity of 45,000 tonnes of superabsorbent polymers in the city is also set to be operational in December, Lin added.
Last year, Formosa Plastics manufactured 1.5 billion tonnes of polyvinyl chloride, 124,697 tonnes of superabsorbent polymers and 383,235 tonnes of acrylic ester, according to the company.
The company generated NT$28.72 billion last year from selling polyvinyl chloride, NT$6.32 billion from selling superabsorbent polymers and NT$14.05 billion from selling acrylic ester, it said, adding that its total revenue last year was NT$215.42 billion.
Meanwhile, market sentiment for methyl methacrylate should improve next quarter after the Chinese government started to investigate antidumping cases for manufacturers of the product in Thailand, Japan and Singapore on Aug. 8, he said.
Beijing proposes implementing a duty of 14.58 percent on imports of the product from Singapore, a levy of 18.49 percent on imports from Thailand and a tarriff of 34.67 percent on imports from Japan, Lin said.
The production of methyl methacrylate is also projected to drop by 210,000 tonnes, about 5.4 percent of total production in Asia, this month and next month as factories in the region conduct annual maintenance, Lin said.
Sales of methyl methacrylate accounted for 2 percent of Formosa Plastics’ revenue last year, according to the company.
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