Formosa Plastics Corp., the flagship entity of the Taiwanese conglomerate Formosa Plastics Group, said Wednesday that it will build a new production site in Texas at a cost of US$207 million (NT$6.1 billion).
When completed, the plant in the United States will have an annual capacity to manufacture 100,000 tons of alpha olefins, which are used to make high-density polyethylene (HDPE), among other products, Formosa Plastics said.
Some 63,000 tons will be used by Formosa Plastics, while the remaining 37,000 tons will be sold on the international market, the company said.
The projected completion date of the US$207 million plant is October 2025, and mass production is scheduled for December that year, after a trial run, Formosa Plastics said.
One of the company’s goals in building the plant in Texas is to secure a supply of raw materials for the production of HDPE, Formosa Plastics said, adding that alpha olefins are in high demand in the global market.
Citing a recent report by market information advisory firm IHS Markit, Formosa Plastics said demand for alpha olefins in North America is expected to hit 915,000 tons in 2025 but supply will be only 878,000 tons.
According to Formosa Plastics, the new Texas investment will be funded by a loan of about US$138 million and an increased investment of US$70 million in its fully owned U.S.-based subsidiary Formosa Industrial Corp.
Currently, Formosa Plastics Group has production sites in Texas and Louisiana, where its four major entities – Formosa Plastics, Nan Ya Plastics Corp. Formosa Chemicals & Fibre Corp. and Formosa Petrochemical Corp. – make petrochemical products such as HDPE, low-density polyethylene (LDPE), ethylene, propene, polypropylene and ethylene glycol (EG).
In April, the four companies reported a net 7.1 percent monthly decline in combined sales to NT$156.61 billion, due to the COVID-19 pandemic and geopolitical factors, but the figure represented a 12.8 percent year-on-year increase.
In the first four months of the year, the combined sales of the four entities totaled NT$610.66 billion, a 21.2 percent increase from a year earlier.
Source: Focus Taiwan News Channel