Formosa Chemicals & Fibre Corp (台灣化纖), a unit of Taiwan’s biggest diversified industrial group, said earnings had improved after a loss in the first quarter, prompting the company to approve investments in chemical plants.
“Earnings are pretty good in the second quarter,” Hong Fu-yuan (洪福源), Formosa Chemicals president, told reporters after a shareholder meeting yesterday, declining to give estimates. “We’re running our plants at almost full capacity.”
Changhua County-based Formosa Chemicals makes petrochemicals used in textiles, plastics, auto parts and components for electronics products.
A stimulus package from China including subsidies for purchasing home appliances helped boost demand for the company’s products, Hong said.
Shareholders approved the use part of last year’s earnings on production lines of meta-xylene, ethylbenzene and styrene monomer — raw materials used to make plastics.
Investment will total NT$2.45 billion (US$75 million) and construction is scheduled to be completed by December next year, the company said in a report to shareholders on Friday.
The company posted a loss of NT$2.58 billion in the first quarter, compared with a profit of NT$5.19 billion a year earlier, Formosa Chemicals said in a stock exchange filing on April 29.
Parent Formosa Plastics Group (FPG, 台塑集團) controls Nan Ya Plastics Corp (南亞塑膠), the world’s biggest processor of plastics for pipes and imitation leather, and Formosa Petrochemical Corp (台塑石化), the island’s only publicly traded oil refiner.
Formosa Chemicals climbed 0.3 percent to NT$49.75 in Taipei trading before the meeting. The stock has risen 24 percent this year, compared with the 36 percent gain in the benchmark TAIEX index.
Formosa Chemicals had an 87 percent decline in profit last year as the global recession reduced demand for its products. Net income fell to NT$6.1 billion, the company said in a statement to the Taiwan Stock Exchange on March 26.
China’s State Council said last month the government will provide subsidies of 2 billion yuan (US$293 million) to encourage consumers to replace old home appliances with new ones. China is Taiwan’s biggest export market, accounting for around 41 percent of the total last month, Ministry of Finance data showed.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such
RSS