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Taiwan's Formosa Plastics and Japan's Idemistu Form JV to Produce Hydrogenated Petro Resin Taiwan

2014/10/31 | By Steve Chuang

The investment project by Taiwan's Formosa Plastics Corp., the flagship company of Formosa Plastics Group, and Japan's Idemitsu Kosan Co., Ltd., a major petroleum refining and chemical company, to set up a joint venture for hydrogenated petroleum resin in Taiwan has just passed the environment impact assessment (EPA), to start up in Q2, 2016, according to insiders.

The joint venture will be located in the Sixth Naphtha Cracker complex, constructed by the Formosa Plastics Group around two decades ago, in Taiwan's central county of Yunlin, to turn out 43,800 tonnes of hydrogenated petroleum resin annually once  fully operational in 2018, to create  245 jobs and turnover of up to NT$5 billion (US$166.67 million).

The NT$3.5 billion (US$116.67 million) project is currently the only one to go ahead among Taiwan's petrochemical industry, after CPC, Taiwan, a state-owned petroleum company, started up its new Third Naphtha Cracker facility in Kaohsiung, southern Taiwan, two years ago.

Despite the project having taken  longer than expected to pass the EPA, Formosa Plastics and Idemitsu both believe the delay to be worthwhile primarily because demand for hydrogenated petroleum resin in Africa, China, India and other emerging markets is expected to keep growing in the years ahead. Idemitsu reportedly offers the highest quality of such product globally.

Formosa Plastics says that this project will help attract more foreign investments in manufacturing higher-margin petrochemicals in Taiwan in the future, as well as expanding Formosa Plastics Group's lineup to include more high-valued products and drive overall performance, and that the project is also the group's first to pass EPA over the past four years and will surely help benefit Taiwan's petrochemical industry in the long run. (SC)

Overview of the JV Project
Proportion of Shares Held

50% by Formosa Plastics Corp. and Idemitsu Kosan Co. Ltd. each

Development Timeline

Construction to get under way in Q2, 2016

Mass production to begin in 2018

Main Product

Hydrogenated petroleum resin, mainly for  adhesives for diapers
(Planned output: 43,800 tonnes a year)

Investment Amount

NT$3.5 Bn.

Job Creation

245 jobs

Annual Turnover

NT$4-5 Bn.

Target Markets

Africa, China, India, or other emerging countries

Source: Formosa Plastics Corp. and Idemitsu Kosan Co., Ltd.