Formosa Plastics Corp (台塑), the nation’s largest producer of polyvinyl chloride, yesterday reported that revenue last month increased 14.6 percent year-on-year to NT$16.98 billion (NT$561.5 million), the highest growth rate among the four major units of the Formosa Plastics Group (台塑集團), primarily due to increased output.
The company’s plant in Kaohsiung’s Linyuan District (林園) reached full capacity last month, helping lift sales volume by 16,000 tonnes and revenue by NT$590 million over the period, Formosa Plastics said in a statement.
However, on a monthly basis, sales declined 5.4 percent from June, which the company attributed to declining orders from its Indian customers.
“Our Indian clients seemed hesitant to place orders for imported goods last month, as they were trying to adapt to challenges following recent tax reforms,” Formosa Plastics chairman Jason Lin (林健男) said at a press conference in Taipei.
India last month launched a new goods and services tax (GST) to replace central and state indirect taxes.
The impact of tax reforms should be a short-term phenomenon, Lin said, citing sustained demand for polyvinyl chloride in India.
Formosa Plastics forecast a utilization rate of 88 percent for this quarter — compared with 94 percent in the second quarter — as its plants undergo regular maintenance.
However, rising product prices are expected to offset the impact of a lower production volume, the plastics maker said.
“The undersupply of petrochemicals in China might stimulate prices further in the third quarter,” Lin told reporters, referring to ethylene and propylene.
The three other main units also reported annual increases in revenue last month, according to separate company filings with the Taiwan Stock Exchange.
Nan Ya Plastics Corp (南亞塑膠), the nation’s largest plastics maker, saw revenue edge up 0.2 percent month-on-month and 11.2 percent year-on-year to NT$25.27 billion.
Formosa Chemicals & Fibre Corp (台灣化學纖維), which produces aromatics and styrenics, reported revenue of NT$29.21 billion, representing a 4.7 percent increase from a month earlier and 4.4 percent from a year earlier.
Formosa Petrochemical Corp (台塑石化) — the nation’s only listed oil refiner — posted revenue of NT$47.9 billion, a 3.6 percent increase from the previous month and 4.4 percent from the previous year.
The group saw its overall revenue last month increase 1.7 percent monthly and 7.1 percent annually to NT$119.36 billion.
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