Taiwan's petrochemical makers expanding to meet rising demand

Taipei, Jan. 29, 2004 (CENS)--Due to global economic recovery, Taiwan manufacturers are actively expanding their operations both at home and abroad, boosting the demand for raw materials.

Smelling the thriving business, leading domestic petrochemical manufacturers, including Shinkong Synthetic Fibers Corp., Formosa Plastics Corp., Formosa Chemical & Fiber Corp., and Chinese Petroleum Corp., have decided to speedily expand their operations this year to meet the rising demand of their downstream clients.

Shinkong is planning to spend NT$2 billion (US$58.8 million at US$1 = NT$34) to expand its operations across the Taiwan Strait. To meet the soaring demand for plastic raw materials by electronics manufacturers in Taiwan, Shinkong is going to install one more production line at its polyester plant on the island. The projected line is estimated to turn out 12,000 metric tons of polyester films per year.

With the new production line, Shinkong is very likely to see 60% growth in the output of its polyester films in the first quarter of 2005. The increasing volume of polyester films will mainly serve the company's two major clients--Hon Hai Precision Industrial Co. and Delta Electronics Inc., both having recently enlarged their production scale.

As for its operations in mainland China, Shinkong will install 10 more false twist machines to enhance the production capacity of synthetic fiber there, and build up a production line to fabricate engineering plastics with monthly output of 1,500 metric tons. Besides, it intends to pump in additional NT$100 million (US$2.94 million) to establish two more lines for the production of polyester chips, and will in the future expand the production of filament especially for industrial use.

Seeing the possible shortage of raw plastic materials in the global market, Chinese Petroleum has determined to appropriate NT$500 billion (US$14.71 billion) as capital spending in the next decade. The budget will not only be used for expanding production of plastic raw materials, but will also for the operations of its other sectors. The company will set up receiving stations for natural gas, extend its pipelines for oil supply, establish a lubricant plant, and build the fifth naphtha cracking plant.

To expand its operations in the mainland, Formosa Plastics is to invest more than NT$7 billion (US$205.88 million) to set up two plants in Ningbo of Zhejiang Province. One plant will turn out acrylic ester (AE) with annual production capacity of 230,000 tons and the other to generate polypropylene (PP) at an annual capacity of 300,000 tons.

Formosa Chemicals will also set up two plants in Ningbo this year. One plant is for offering steam/electricity co-generation services and the other for the production of purified terephalic acid (PTA) with annual production volume of some 600,000 tons. The investment for the two plants is estimated to be around NT$10 billion (US$29.4 million).