FPG Budgets NT$18.2 B to Expand Ningbo Plant in China

Formosa Plastics Group (FPG) will set aside NT$18.24 billion, or about US$610 million, to expand production of a petrochemical park in Ningbo, Zhejiang province, China.

An industry insider predicted the Ningbo plant, after completion in 2012, will add approximately NT$8 billion in after-tax earnings to the group’s overall annual earnings.

Thanks to rising prices of its major products such as PE (polyethylene), PVC (polyvinyl chloride), AN (acrylonitrile), and MMA (methacrylate), FPG is expected to see after-tax earnings exceed NT$7 per share in 2010.

Due to price hikes of major petrochemical products and strong domestic demand in China, the FPG’s Ningbo production complex will see after-tax earnings hit a historic high of 20 billion renminbi, or about NT$92 billion, in 2010.

Backed by earnings from the Ningbo plant plus the earnings registered by the group’s major subsidiaries in China, including Formosa Plastics Corp., Nan Ya Plastics Corp. and Formosa Chemical & Fibre Corp., the group is expected to score more than 2.8 billion renminbi in 2010, for a historic high.

In addition to rising earnings from the petrochemical plant in Ningbo and electronics plant in Kunshan, Jiangsu province, Nan Ya Plastics will also see increased earnings in China as its No. 2 polyester plant in Kunshan will begin mass production sometime in March 2011.