Formosa Plastics Corp (FPC, 台塑) and Nan Ya Plastics Corp (南亞塑膠) yesterday said an order from the Yunlin County Government last week to close six petrochemical plants in the county after a series of fires would lead to heavy financial losses.
Nan Ya said in a filing to the Taiwan Stock Exchange that closing five of its plants would generate losses of NT$8.4 million (US$291,400) per day, while FPC said it would suffer losses of NT$26 million per day.
The remarks came after FPC yesterday sent representatives to the county government, after it ordered the shutdown from June 1 over safety concerns.
FPC called on the county government to postpone the shutdown, saying not all of the plants had safety issues.
The firms sought a compromise or leniency with the county government, saying that the suspension of so many plants at the same time could deal a heavy blow to the petrochemical sector.
However, the county government said that postponing the shutdown was not possible because public safety was more important than economic development.
After the order, Nan Ya’s shares plunged 5.5 percent to close at NT$77.3 in Taipei trading yesterday, while FPC’s shares dipped 3.54 percent to NT$109.
In an unprecedented move, FPC was ordered on Friday to shut down its 12-hectare vinyl chloride (VCM) plant at the Mailiao (麥寮) petrochemical complex on June 1.
The plant produces polyvinyl chloride (PVC) and other plastic materials.
The county government also told Nan Ya to shut down its 50-hectare Haifeng (海豐) factory compound on the same date.
The Haifeng compound houses five production lines that churn out a number of key textile materials and petrochemical intermediaries, including 1,4 butylene glycol (BG), ethylene glycol (EG) and bisphenol A (BPA).
The plants in question should remain closed until the county government and the Council of Labor Affairs decide that safety measures have been adequately improved, Yunlin County Commissioner Su Chih-fen (蘇治芬) said on Friday.
The county government issued the unusually harsh penalty to FPC after two fires at the group’s Mailiao complex on May 12 and May 18.
FPC executives were caught off-guard by the county government’s decision and said the punitive move would deal a serious blow to the downstream petrochemical industry, with the textile sector taking the brunt of the impact.
FPC’s VCM plant produces 800,000 tonnes of petrochemical materials a year. The plant has been closed since the May 12 fire. Its shutdown will affect Nan Ya’s operations because VCM is an important ingredient in the production of PVC and many other plastic materials.
Nan Ya is the world’s fourth-largest EG producer, with its Mailiao and Haifeng factories churning out 180 tonnes of the chemical annually.
Some sections of a Nan Ya plant in the Mailiao complex have suspended production since the May 12 fire pending safety inspections, but the Haifeng compound’s shutdown would affect global EG supply and deal a drastic blow to the downstream synthetic fiber industry, market analysts said.
Nan Ya’s monthly sales could drop by between NT$8 billion and NT$10 billion because of the Haifeng complex closure, they said.
Additional reporting by staff writer
TRADE WAR: Tariffs should also apply to any goods that pass through the new Beijing-funded port in Chancay, Peru, an adviser to US president-elect Donald Trump said A veteran adviser to US president-elect Donald Trump is proposing that the 60 percent tariffs that Trump vowed to impose on Chinese goods also apply to goods from any country that pass through a new port that Beijing has built in Peru. The duties should apply to goods from China or countries in South America that pass through the new deep-water port Chancay, a town 60km north of Lima, said Mauricio Claver-Carone, an adviser to the Trump transition team who served as senior director for the western hemisphere on the White House National Security Council in his first administration. “Any product going
TECH SECURITY: The deal assures that ‘some of the most sought-after technology on the planet’ returns to the US, US Secretary of Commerce Gina Raimondo said The administration of US President Joe Biden finalized its CHIPS Act incentive awards for Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), marking a major milestone for a program meant to bring semiconductor production back to US soil. TSMC would get US$6.6 billion in grants as part of the contract, the US Department of Commerce said in a statement yesterday. Though the amount was disclosed earlier this year as part of a preliminary agreement, the deal is now legally binding — making it the first major CHIPS Act award to reach this stage. The chipmaker, which is also taking up to US$5 billion
High above the sparkling surface of the Athens coastline, the cranes for building the 50-floor luxury tower centerpiece of Greece’s future “smart city” look out over the Saronic Gulf. At their feet, construction machinery stirs up dust. Its backers say the 8 billion euro (US$8.43 billion) project financed by private funds is a symbol of Greece’s renaissance after the years of financial stagnation that saw investors flee the country. However, critics see it more as a future “ghetto for the rich.” It is hard to imagine that 10km from the Acropolis, a new city “three times the size of Monaco”
STRUGGLING BUSINESS: South Korea’s biggest company and semiconductor manufacturer’s buyback fuels concerns that it could be missing out on the AI boom Samsung Electronics Co plans to buy back about 10 trillion won (US$7.2 billion) of its own stock over the next year, putting in motion one of the larger shareholder return programs in its history. South Korea’s biggest company would repurchase the stock in stages over the coming 12 months, it said in a regulatory filing on Friday. As a first step, it would buy back about 3 trillion won of paper starting today up until February next year, all of which it would cancel. The board would deliberate on how best to effect the remaining 7 trillion won of buybacks. The move
RSS