Taiwan approves naphtha cracker investment in China

28 Jan '14

2 min read

The Ministry of Economic Affairs (MOEA), Government of Taiwan, has conditionally approved the application of seven domestic petrochemical companies to invest about US$ 263 million in setting up naphtha crackers in China.

Earlier in October 2013, the Taiwanese Government had lifted its ban on investing by domestic companies in China’s petrochemical sector. The decision was taken in view of the likely supply gap that would occur after Taiwan’s fifth naphtha cracker, run by CPC Corp, shuts down in 2015 when its license expires.

MOEA said it had approved the application of USI Corp and six other companies for establishing a joint venture with China’s Gulei Petrochemical Co for production of ethylene, propylene, butadiene and four other products in Fujian’s Zhangzhou Gulei Economic Development Zone.

However, the seven companies, including China Petrochemical Development Corp, Ho Tung Chemical Corp and LCY Chemical Corp, must report on their Chinese investment to the Taiwanese Government from 2015 through 2019, the MOEA said.

The report would include details about the companies’ annual business operations and ensuring that they adhere to their obligation of shipping high-value products back to Taiwan, the MOEA statement said.

The conditions imposed by the Government also include that the ownership of the joint venture must be secured by Taiwanese firms. In addition, the Taiwanese companies would also need to increase their research and development and manufacturing of high-value products in Taiwan.

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