Market and product
Formosa Petrochem to expand capacity
The refiner plans to expand its crude oil processing capacity to 593,000 barrels a day in three years, Chairman Wilfred Wang said in Taipei yesterday. The company is seeking government approval to increase capacity further to 720,000 barrels a day, he said.
Formosa Petrochemical, based in western Taiwan's Mailiao, has a capacity to process 540,000 barrels of crude oil daily. Consumption of petroleum products on the island rose 5.6 percent in April from a year earlier, the Bureau of Energy said on June 4. Gross domestic product will probably grow 6.14 percent this year, after contracting 1.91 percent in 2009, the statistics bureau in Taipei said on May 20.
“We will expand production capacity to boost competitiveness,” Wang said at the company's annual shareholder meeting in Taipei. “Over the long term, the economy is heading in a good direction.”
The company's cost for refining a barrel of crude oil is between US$5 and US$5.5, spokesman Lin Keh-yen told shareholders, without giving any comparison data.
Formosa Petrochemical climbed 1.6 percent to NT$82.5 in Taipei trading, before the meeting. The benchmark TAIEX index of equities rose 0.8 percent.
The refiner operates three crackers that can process naphtha or liquefied petroleum gas into ethylene and propylene, chemicals found in plastics and polyester fabrics. The plants have a combined capacity to make 2.94 million metric tons of ethylene a year.
Fuel refining accounted for 26 percent of profit in the first quarter, compared with petrochemicals' 47 percent, Lin said yesterday. Formosa Petrochemical also generates electricity.
Net income rose to NT$11 billion in the first quarter from NT$2.66 billion a year earlier, the company said on April 26.
Separately, Taiwan's petrochemical trade association yesterday called on both China and Taiwan to include various petrochemical materials in the so-called early harvest list under the economic cooperation framework agreement (ECFA).
The materials include polyethylene (PE), polypropylene (PP), and three others.
“Taiwan should enjoy the same benefits as ASEAN petrochemical manufacturers, who are subject to zero tariff in China,” said the group's chairman, Hung Fu-yuan.
(Source: www.chinapost.com.tw)
