Formosa Petrochemical Corp (FPC), said Friday it has been working to diversify its business to other potential markets for some time, in response to China’s announcement that it would expand the suspension of preferential tariffs on some Taiwanese imports.
The company began diversifying exports of its base oils for lubricants to markets other than China three years ago, FPC chairman Chen Bao-lang (陳寶郎) said.
His remarks came after Beijing announced early on Friday a plan to further suspend tariff concessions on 134 Taiwanese products under the Economic Cooperation Framework Agreement (ECFA), effective from June 15.
Photo: Taipei Times file
Items include base oils for lubricants, racing bicycles and textile products manufactured in Taiwan, China’s Ministry of Finance said.
Chen said FPC’s base oils for lubricants is the only item that would be affected by the tariff suspension.
Three years ago, the Chinese market accounted for 50 to 60 percent of FPC’s base oil exports, but that figure dropped to 32 percent in last year, Chen said, adding that the company would continue to tap into potential markets in Southeast Asia and other places.
FPC produces about 700,000 metric tonnes of base oils annually, of which about 200,000 metric tonnes are sold domestically while the rest are exported.
The amount shipped to China accounts for about 30 percent of the FPC’s related exports, the company said.
However, the item accounts for only 1 percent of FPC’s revenue, so the tariff suspension would have limited impact on its business, it said.
Meanwhile, Formosa Chemicals & Fibre Corp (FCFC) said Friday that the suspension could impact three of its exports to China, including styrene-acrylonitrile resins, high impact polystyrene resins and polycarbonate resins.
China had began imposing a 9 percent anti-dumping duty on polycarbonate on April 20, which is scheduled to last for five years, FCFC chairman Hong Yuan-fu (洪福源) said.
Tariffs on Taiwan-produced polycarbonate would return to about 6.5 percent, which, on top of an anti-dumping duty, would be a lot for FCFC to shoulder, he said.
However, as the company has been diversifying its business to other markets, and most taxes on FCFC exports to China are shouldered by businesses there, the preferential tariff rate suspension would have a smaller impact, Hong added.
FCFC said it expects to be hit by about US$6.9 million in tariffs this year.
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