Major members of the Formosa Plastics Group (台塑集團), the nation’s largest industrial conglomerate, yesterday said they are planning to invest US$1 billion in its subsidiary in Vietnam.
The fund is to accelerate construction of a US$10.5 billion steel plant owned by the subsidiary, Formosa Ha Tinh Steel Corp (台塑河靜鋼鐵興業).
The first blast furnace of the Vietnamese unit, previously scheduled to start production last year, is to begin operations by the end of the first half, the group said.
The Formosa Ha Tinh Steel project is the largest foreign direct investment venture in Vietnam, and the new facility is expected to be the biggest integrated steel mill in Southeast Asia, data showed.
The group’s main members— Formosa Plastics Corp (台灣塑膠), Nan Ya Plastics Corp (南亞塑膠), Formosa Chemicals & Fibre Corp (台塑化纖) and Formosa Petrochemical Corp (台塑石化) — each hold an 11.432 percent stake in the Vietnamese unit.
Based on shareholding ratios, each company is to pay nearly US$57.17 million in the first installment, according to separate filings with the Taiwan Stock Exchange.
Formosa Taffeta Co (福懋興業), a textile affiliate, also holds a 3.847 percent stake in Formosa Ha Tinh Steel and plans to first invest US$19.23 million.
The proposals still need approval from the boards of each company.
The group’s plan was made nearly a year after Formosa Ha Tinh Steel was found to have polluted more than 200km of coastline in four Vietnamese provinces in April last year, which sparked public outrage across the nation.
The group had apologized and agreed to pay US$500 million in compensation for those affected by the toxic spill.
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