Formosa Plastics Corp (台灣塑膠), the flagship entity of Formosa Plastics Group (台塑集團), yesterday said that it would build a new manufacturing site in Texas at a cost of US$207 million.
When completed, the plant would have an annual capacity of 100,000 tonnes of alpha olefins, which are used to make high-density polyethylene (HDPE), among other products, the company said.
About 63,000 tonnes would be used by Formosa Plastics, while the remaining 37,000 tonnes would be sold on the international market, it said.
The projected completion date of the plant is October 2025, and mass production is scheduled for December that year after a trial run, the company said.
One of the company’s goals in building the plant in Texas is to secure raw material supply for the production of HDPE, it said, adding that alpha olefins are in high demand worldwide.
Citing a recent report by market information advisory firm IHS Markit, Formosa Plastics said that demand for alpha olefins in North America is expected to hit 915,000 tonnes in 2025, but supply would be only 878,000 tonnes.
The new Texas investment is to be funded by a loan of about US$138 million and capital injection of US$70 million in its fully owned US-based subsidiary Formosa Industrial Corp.
The group has production sites in Texas and Louisiana, where its four major units — Formosa Plastics, Nan Ya Plastics Corp (南亞塑膠), Formosa Chemicals & Fibre Corp (台灣化學纖維) and Formosa Petrochemical Corp (台塑石化) — manufacture petrochemical products such as HDPE, low-density polyethylene (LDPE), ethylene, propylene, polypropylene and ethylene glycol (EG).
The four units on Friday reported mixed revenue results for last month amid China’s anti-epidemic measures, the Russia-Ukraine war and rising inflationary pressure around the world, according to their regulatory filings.
Formosa Chemicals, which manufactures aromatics and styrenics, saw revenue edge up 0.1 percent monthly and 10.2 percent annually to NT$36.42 billion (US$1.23 billion), as price hikes in response to rising crude oil costs offset the impact of lower sales volume.
The other three companies all saw sequential revenue declines, with Nan Ya Plastics registering the biggest drop of 19.7 percent to NT$29.7 billion, as China’s harsh lockdown measures, the Russia-Ukraine war, planned EG production cuts, and changes in consumption caused by inflation affected sales volume and prices.
Compared with April last year, revenue decreased 14.9 percent, said the producer of electronic materials, polyester products, chemical products and plastic products, among others.
Formosa Plastic reported a 5 percent month-on-month decrease in revenue to NT$25.15 billion, but a 3.2 percent increase from a year earlier. The company blamed the monthly revenue drop on declining sales volume of polyethylene and polypropylene.
Formosa Petrochemical, the nation’s only listed oil refiner, reported that revenue dropped 5 percent month-on-month to NT$65.35 billion, as declining sales at its naphtha cracking business offset rising sales at its refining business.
On an annual basis, revenue increased 40.4 percent because of higher product prices this year, the firm said.
In the first four months of the year, Formosa Petrochemical reported the highest annual increase of 41.9 percent in revenue to NT$250.9 billion, ahead of Formosa Plastics’ 13.2 percent increase to NT$96.15 billion, Formosa Chemicals’ 12.5 percent rise to NT$131.82 billion and Nan Ya’s 5.8 percent growth to NT$131.79 billion, companies’ data showed.
German Chancellor Olaf Scholz and German Minister for Economic Affairs and Climate Action Robert Habeck have promised to solve investment subsidy issues for Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Intel Corp, despite the country’s budget woes. Uncertainty over the funding to TSMC and Intel has arisen after a ruling by the German Federal Constitutional Court, which cast doubt over subsidies for construction of local semiconductor chip plants. On Nov. 15, the court ruled that the German government’s decision last year to reallocate 60 billion euros (US$65.74 billion) of unused funding from COVID-19 pandemic support measures to its Climate and Transformation Fund
LONG ROAD AHEAD: The US is somewhere between one and two decades away from achieving the Biden administration’s goal to achieve chip autonomy, Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), who runs the semiconductor industry’s most valuable company, said the US is as much as 20 years away from breaking its dependence on overseas chipmaking. Huang, speaking at the New York Times’ DealBook conference in New York on Wednesday, explained how his company’s products rely on myriad components that come from different parts of the world — not just Taiwan, where the most important elements are manufactured. “We are somewhere between a decade and two decades away from supply chain independence,” he said. “It’s not a really practical thing for a decade or two.” The outlook suggests
CHINA NOT A FRIEND: ‘Newsflash: Democracy is good for your businesses,’ US Secretary of Commerce Gina Raimondo said as she gave a speech at a national defense forum US Secretary of Commerce Gina Raimondo on Saturday urged lawmakers, Silicon Valley and US allies to stop China from getting semiconductors and cutting-edge technologies key to national security. Speaking at an annual national defense forum in Simi Valley, California, Raimondo called Beijing “the biggest threat we’ve ever had” and stressed that “China is not our friend.” The world’s top two economies are locked in a fierce commercial and geopolitical rivalry, in which her department plays a leading role. In October, Raimondo unveiled a series of restrictions on the export of advanced chips to China, including those used in the development of artificial intelligence
GREEN SOLUTIONS: The company said that it is set to become one of the very few suppliers of low-carbon emissions cement, which would give it a competitive edge Taiwan Cement Corp (台灣水泥) plans to spend up to 770 million euros (US$843.5 million) to boost its holdings in two cement ventures in Turkey and Portugal as demand for low-carbon emissions cement rises in Europe, the company said on Monday. Taiwan Cement’s board of directors has approved a plan to lift the company’s stake in OYAK Denizli Cimento, a joint venture with Turkey’s OYAK Group, to 60 percent from 40 percent and to increase its stake in Cimpor Portugal Holdings SGPS SA, a Portuguese cement joint venture with OYAK, to 100 percent from 40 percent, it said in a statement. “Through increased