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Shutdown to take toll on revenue at Formosa Petrochemical
18
Aug '14
Revenues within various divisions of the Taiwan-based, Formosa Plastics group are expected to take a hit in the current quarter, following annual maintenance shutdowns at its petrochemical division and chemical & fibre unit in the quarter.

Formosa Petrochemical Corp plans to conduct an annual maintenance at one of its ethylene plants, while Formosa Chemicals & Fibre, another major unit of the group, said it also will conduct maintenance at plants manufacturing Paraxylene (PX) and Oxylene.

Formosa Petrochemical, Taiwan’s only listed oil refiner and a major unit of the Formosa Plastics Group, shut down its third olefin plant last week, for a 45-day maintenance cycle, Formosa Petrochemical President, Tsao Mihn said.

Shutdown at the olefin plant will affect operations at Formosa Chemicals & Fibre, another major unit of the group, which uses ethylene produced at the petrochemical plant.

Formosa Chemicals too said that it too will conduct maintenance at its PX and Oxylene plants for 45 days, beginning next month to cope with the reduced supply for ethylene and at another plant producing styrene monomer, also for 45 days.

Formosa Chemicals & Fibre Corp, which produces aromatics and styrenics, is expected to report a decline in revenue for this quarter from last quarter’s NT$110.82 billion (US$3.69 billion), as raw material supply is expected to diminish, the Taipei Times reported.

President Tsao said, “Ethylene shipments from the plant would decline by 20 percent this month from July and be down by one-third next month, also from July.”

“However, having completed annual maintenance for its oil refinery facilities in June, Formosa Petrochemical will still strive to post a revenue increase this quarter from NT$219.56 billion last quarter”, the official said.

“We will try to hold our profit this quarter steady compared with NT$6.41 billion a quarter earlier,” Tsao informed.

“The company’s utilization rate for its oil refinery facilities is expected to be 100 percent this quarter, which would increase its oil production to close to 540,000 barrels a day this quarter, up from 377,000 barrels a day last quarter”, he added.

“Between next month and October, Formosa Chemicals & Fibre’s PX and Oxylene shipments are likely to drop by 200,000 tons, while shipments for styrene monomer are expected to decline by 90,000 tons”, General Manager Hong Fu-Yuan told reporters.

Also affected by the scarcity of ethylene, Formosa Plastics Corp, the flagship company of the group, expects its factory utilization to drop to 80 percent this quarter, from 85.3 percent last quarter, Company President Jason Lin, said.

However, Jason Lin still hopes that this quarter’s revenue would be flat, from NT$59.03 billion posted in the last quarter, on the back of higher product prices.

Fibre2fashion News Desk - India

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