Formosa Petrochemical to See Annual Sales Exceed NT$500 billion

Taipei, Dec. 15, 2005 (CENS)--Formosa Petrochemical Corp. (FPCC) of the Formosa Plastics Group is expected to see its annual production capacity of ethylene reach three million metric tons in the beginning of 2007, as it will complete the fourth phase of construction to expand its sixth naphtha-cracking complex located in Mailiao, Yunlin County, central Taiwan in October next year.

At that time, FPCC will see its daily oil-refining capacity reach 520,000 barrels, which is projected to generate an additional NT$120 billion (US$3.571 billion at US$1:NT$33.6) in annual sales. After the completion of the expansion at the sixth naphtha-cracking complex, Mailiao will become the world's second-largest petrochemical production facility, only behind Saudi Arabia's Jubail.

FPCC is the main financer of the expansion project, with other major investors coming from the other subsidiaries of Formosa Plastics Corp., Nan Ya Plastics Corp., and Formosa Chemical & Fiber Corp. An FPCC executive noted his company would see annual sales amount to NT$400 billion (US$11.9 billion) this year. After the completion of the expansion project, the company will see annual sales reach over NT$500 billion (US$14.88 billion).

The expansion project also includes the construction of FPCC's No.3 olefin plant, which has a targeted annual output reaching about one million metric tons. The combined output of all three of FPCC's olefin plants initially will reach 450,000 barrels of crude oil, and will likely increase to 520,000 barrels after engineering work to remove bottlenecks is completed.

FPCC president Wang Wen-chao said his company would be more flexible in rolling out gasoline and diesel oil beginning early next year, when production procedures would be improved. Wang also predicted competition from mainland China and the Middle East would rise next year, but he believed market demand would still exceed supply next year.

An executive at FPCC noted that petrochemical plants rolling out a single product would lose their competitiveness because they are not able to control the procurement of raw materials and have to bear high production costs, a situation that will worsen after mainland China's large-sized petrochemical complexes begin production in the future.