Formosa Chemicals & Fibre Corp (台灣化學纖維) yesterday expressed optimism about its near-term business outlook as it expands its capacity in China.
The company has no large investment plans in Taiwan, but is working on expansion projects in Ningbo in China’s Zhejiang Province and in the US state of Louisiana, vice chairman Hong Fu-yuan (洪福源) said on the sidelines of the company’s annual shareholders’ meeting.
Formosa Chemicals produces phenols, purified terephthalic acid (PTA) and acrylonitrile butadiene styrene (ABS) in Ningbo.
A key member of Formosa Plastics Group (台塑集團), Formosa Chemicals said it is working to improve the efficiency of its PTA production lines, which would help reduce costs by US$25 per tonne, it said in its annual report.
The company said it also plans to increase its purified isophthalic acid (PIA) production in Ningbo over the coming two years as prices continue to grow because of tight supplies in major markets.
The company has budgeted US$260 million for the construction of a new PIA facility and has already secured a syndicated loan of US$155 million from banks, it said, adding that the facility would have an annual capacity of 200,000 tonnes and is expected to begin trial production in the fourth quarter of next year.
Shareholders yesterday approved the distribution of a cash dividend of NT$7 per common share, the highest since 2011. That represented a payout ratio of 75 percent, as the company’s earnings per share were NT$9.33 last year.
Sales last year increased 12.3 percent year-on-year to NT$358.42 billion, with petrochemical products contributing 62.3 percent of the total sales and plastics products making up 29.5 percent, data showed.
In the first five months of the year, revenue increased 14.76 percent to NT$164.72 billion from NT$143.54 billion in the same period last year.
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