Formosa Petrochemical to invest NT$54.4 B. to boost output capacity

Taipei, Dec. 16, 2003 (CENS)--Formosa Petrochemical Corp. (FPCC), an oil refinery subsidiary of the Formosa Plastics Group, will invest NT$54.4 billion (US$1.6 billion at US$1:NT$34) to raise production capacity and establish new production facilities by 2008.

FPCC said the new investment is triggered by tougher market competition and the difficulty in raising profit margins in oil sales. The new investment will help FPCC boost the added-value of its products and increase production of polypropylene (PP) by 680,000 metric tons and the oil refining capacity by 2.1 million metric tons per year.

The company anticipated it would grab a 33% share of the domestic gas-station market, with the number of gas stations to reach 715 next year. The company targets to post NT$2.3 (US$0.06) in earnings per share next year.

With daily oil refining capacity reaching 450,000 barrels, the NT$78.4 billion (US$2.3 billion) FPCC is mainly invested in by FPG's four subsidiaries, including Formosa Plastics Corp. (33%), Nan Ya Plastics Corp. (27%), Formosa Chemical & Fiber Corp. (28%), and Formosa Taffeta Corp. (4%).

FPCC is FPG's largest subsidiary in terms of sales. With an annual oil-refining capacity of 21 million metric tons, the company is currently capable of rolling out 1.6 million metric tons of ethylene per year. The company also has a steam/electricity cogeneration plant with generating capacity of 1.82 million kilowatts.

With sales reaching NT$169.4 billion (US$4.98 billion) last year, FPCC anticipated it would see the sales value increase to NT$223.4 billion (US$6.57 billion) this year. The company is scheduled to list share on the Taiwan Stock Exchange at the initial public offering price of NT$43 (US$1.26) on Dec. 26.

Recently an FPCC executive rebuffed the rumor that his company has imported oil products for sales in the domestic market. He said PFCC not only sells oil in Taiwan, but also in overseas markets as Japan, South Korea, Southeast Asia, and even the U.S.