Nan Ya Plastics Corp (南亞塑膠), one of the major units of Formosa Plastics Group (FPG, 台塑集團), on Tuesday said it would increase its investment in a plant in Texas to boost its ethylene glycol production.
Nan Ya Plastics said in a statement that it is investing an additional US$160 million in its subsidiary in Texas, which operates an ethylene glycol plant in Point Comfort.
The funds are to implement a third-phase expansion of production and would boost annual output from 360,000 tonnes to more than 800,000 tonnes, it said.
Construction of a facility to accommodate increased production is under way and would be completed next month or in November, and would start operations in December, Nan Ya Plastics said.
The third-phase expansion, which had been scheduled for completion in the first half of this year, was delayed due to the COVID-19 pandemic, it said.
Nan Ya Plastics had previously invested US$277 million in the subsidiary and the additional funds would lift its investment to US$437 million, or 3.12 percent of its assets.
Global demand for ethylene glycol, one of the major components of polyester products, is likely to increase 3.5 percent per year in the long term, despite oversupply at this time, market analysts have said.
Demand this year is expected to rise 1.3 percent from last year, analysts said.
The Nan Ya Plastics plant has been generating stable profit and the expansion project is expected to sharpen the company’s competitive edge, they said.
Nan Ya Plastics said that its board of directors on Tuesday approved a plan to issue NT$10 billion (US$341.2 million) in unsecured corporate bonds this year to repay debt.
The bonds would comprise three tranches — NT$3.2 billion in five-year bonds with a coupon rate of 0.49 percent, NT$3.8 billion in seven-year bonds with a rate of 0.58 percent and NT$3 billion in 10-year bonds with a rate of 0.62 percent, the company said.
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