Taiwan's Formosa Chemical to set up nylon filament plant in China

Taipei, Dec. 1, 2004 (CENS)--Formosa Chemical & Fiber Corp., Taiwan's leading manufacturer of nylon filament, and its sister enterprise Formosa Taffeta Co. will jointly set up a nylon filament plant in mainland China, probably in Changzhou of Jiangsu Province, to conduct integrated operations including spinning, weaving, and dyeing.

Top executives of both firms have paid several visits to Changzhou since the beginning of this year. But they kept a low profile about the plan, saying it is still under assessment regarding the investment capital, the scale, and the location of the plant. It is believed that the details of the plan would not be finalized until the end of the year.

Today Formosa Taffeta's plant in Zhongshan of Guangdong Province can turn out 12 million yards of nylon cloths per month, and the projected plant in Changzhou may have more than 1,000 weaving machines.

To lower manufacturing cost, Formosa Taffeta has in recent years moved its textile operations to Vietnam and the mainland from Taiwan. Recently mainland Chinese authority imposed anti-dumping tariffs of 6% on nylon filament imported from Taiwan. Including the value-added business tax rate of 17%, the tax rate on imports of Taiwan-made nylon filament into the mainland runs up to 20%.

So far Taiwan has been mainland China's largest supplier of nylon filament, supplying 4,000-5,000 metric tons of filament to the mainland per month. Insiders believed that the mainland's anti-dumping tariffs on Taiwan's nylon filament makers might encourage them to move or further expand their operations in the mainland.