Taiwanese oil firm denies scrapping Malaysia investment plan

Kuala Lumpur and Taipei, Nov. 18 (CNA) Taiwan's state-run oil refiner CPC Corp., Taiwan (CPC) denied reports Saturday that it was scrapping a planned investment project in Malaysia, saying the plan was still undergoing a feasibility assessment. CPC Vice President Chen Ming-huei told Malaysia's Oriental Daily News that he was unaware of any Taiwanese reports that Kuokuang Petrochemical Technology Co., the CPC subsidiary making the investment, had dropped its plan to invest in Malaysia. Taiwan's Chinese-language Economic Daily News reported Thursday that Kuokuang planned to build a NT$10 billion (US$343 million) methyl methacrylate plant at Taichung Port because its investment project in Malaysia had stalled. Methyl methacrylate is used to manufacture resins and plastics. Analysts said Kuokuang hoped to build a petrochemical complex covering the full petrochemical supply chain in Malaysia, but progress has been slow because of difficulties in securing land, the report said. Facing problems in Malaysia, Kuokuang decided to first invest in facilities producing high value-added petrochemical end-products in Taiwan, and it is expected to sign a NT$55.4 billion investment deal to put plants in Taiwan's main port areas, including the one in Taichung. The report added that Kuokuang is planning to differentiate itself from local firms by using eco-friendly and more advanced petrochemical materials and techniques to improve the competitiveness of its products. Chen clarified that Kuokuang is still evaluating its planned investment in Pengerang in the southern Malaysian state of Johor and has not decided to pull out of the Southeast Asian country. He said that Kuokuang in principle would focus on research and development of high-end products in Taiwan and mass production overseas and described Kuokuang's investments in Taiwan and those in Malaysia as separate matters. Chen said Taiwan has only a limited amount of land, and mass production of petrochemical products requires a place like Pengerang that has large tracts of land available for manufacturing. Oil and natural gas authorities in Johor also said they have not received any word from CPC that it was withdrawing its investment plan. Kuokuang had originally planned to build a naphtha cracking and petrochemical complex in Changhua in central Taiwan but was forced to scrap the project last year because it did not pass local environmental assessments, eventually deciding to move it overseas. Malaysian Prime Minister Najib Razak announced in May this year that a Taiwanese petrochemical firm had promised to invest in a petrochemical complex in Pengerang set up by Petronas, Malaysia's state-run oil firm. The investment plan, estimated at US$120 billion, will include an oil refinery and a naphtha cracker. Taiwan Economics Minister Shih Yen-shiang later confirmed that the Taiwanese firm Najib was referring to was Kuokuang Petrochemical Technology. The Pengerang project has drawn opposition from local residents, however, who staged a protest in May over pollution concerns. (By Kuay Chau-churh and Scully Hsiao)