Formosa awaits approval for big expansions in China

By Malini Hariharan

In a research note released today, UBS has highlighted plans by Formosa Chemical and Fibres (FCFC) for major expansions at Ningbo, China.

The Taiwanese petrochemicals major is in the process of getting Chinese government approval for a new 1.5m tonnes/year PTA plant, a 200,000 tonnes/year PS unit and a 150,000 tonnes/year ABS plant, said UBS. There is also the possibility of a 200,000 tonnes/year phenol plant at the site.

These projects would further build FCFC’s presence in China where it currently has capacities for around 600,000 tonnes/year of PTA, 300,000 tonnes/year of ABS and 200,000 tonnes/year of PS.

It looks like the company is moving ahead with downstream investments first rather than waiting for the Chinese and Taiwanese governments to lift restrictions on refinery and cracker investments on the mainland. The Formosa group of companies has for a long time been lobbying for a removal of this ban as they would like to create an integrated refining and chemicals hub in China along the lines of what they have at Mailiao in Taiwan.

Expansions have also been lined up by FCFC in Taiwan for which the company expects environmental clearance by the end of this year, said UBS but did not provide any further details about the project.

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