FPC to set up Asia's largest PP plant in mainland China

Taipei, May 14, 2004 (CENS)--Formosa Plastics Corp. (FPC), the flagship unit of the Formosa Plastics Group (FPG), will build Asia's largest PP (polypropylene) plant in Beilun economic and technology zone in Ningbo of Zhejiang Province, mainland China.

FPC said it has acquired special manufacturing technology from Novolen Technology Co., formerly belonging to Germany-based BASF Corp. and now jointly held by ABB Group and Eqistar Co. The proposed PP plant will concentrate on the production of specialty chemical products of high economic value.

Originally the proposed Beilun plant was designed to have annual output of 300,000 metric tons of PP. With the acquisition of manufacturing technologies from Novolen, the plant will be able to increase the annual output to 450,000 metric tons. Furthermore, the plant will upgrade product line from polymer products to high-price pipe-, biochemical- and high impact-grade products. Some 40% of the total production capacity will be used for producing high-impact polymers suitable for the industries of packaging, transportation and automobile parts.

FPC began constructing the PP plant last year and will launch pilot production in the fourth quarter of 2006. The company estimated total investment in the construction of the plant at NT$3 billion (US$89.55 million at US$1:NT$33.5).

Over the past several years, FPC and its affiliate Formosa Chemical & Fiber Corp. (FCFC) have invested approximately US$300 million to set up production facilities in Beilun. FPC said its huge investment in the mainland is to cope with the increased demand of plastics processing plants there.

FPC has begun churning out PVC (polyvinyl chloride) and AE (acrylic ester) in Beilun. Including the investment in the PP plant, FPC has remitted US$111 million to build production facilities in Beilun.

At present, FPG's production facilities in Beilun include a PVC plant and a AE plant owned by FPC, a ABS (acrylonitrile butadiene styrene), a PS (polystyrene), and a PTA (purified terephthalic acid) plant, as well as a thermal power plant belonging to FCFC.