CPDC Sets Aside US$159.23 M.to Expand Output (Taiwan)

China Petrochemical Development Corp. (CPDC), one of Taiwan`s leading manufacturers of petrochemicals, will budget NT$5 billion (US$159.23 million) to raise production capacities of CPL (caprodactam) and AN (acrylonitrile) by 40% and 30%, respectively.

CPDC said the production expansion is triggered by anticipated booming demand for such products in the two years to come. With the expansion completed, the company will be roll out 400,000 tons of CPL and 240,000 tons of AN per year.

Thanks to earnings from non-core business, CPDC will challenge between NT$2.9 and NT$3 in after-tax net profit per share this year, hitting the highest record in 20 years.

As the worldwide production of CAL and AN, the major product lines of CPDC, stagnate, CPDC is expected to make handsome profits in the next two years. Besides, some leading manufacturers of CPL and AN in Asia will soon begin annual repair and maintenance, which will keep prices of CPL and AN high, which will help CPDC generate satisfactory gains from such sales.

Refilling inventories by downstream producers of nylon chips has helped to push the spot price of CPL since July to US$2,615 per metric ton.

An institutional investor estimates CPDC can make over US$700 and over US$500 in gross earnings per tom for the production of CPL and AN, resulting in CPDC`s NT$1.06 billion in combined monthly gross profits for the production of CPL and AN.