TAIPEI (Taiwan News) — Formosa Plastics Group Chair Kuo Wen-bee (郭文筆) said the company is expected to return to profit this year after posting a net loss of NT$10.05 billion (US$314 million) last year, supported by higher petrochemical material prices that have lifted revenue.
Kuo said the company’s first-quarter profit rose significantly due to supply disruptions from the war in Iran, which pushed up crude oil and naphtha prices. As petrochemical feedstocks are derived from crude oil and naphtha, higher input costs also led to increased product prices, per CNA.
The company reported first-quarter net profit of NT$3.29 billion, up 64 times from last year. It attributed last year’s losses to factors including excess petrochemical production and US tariffs.
Kuo estimated the company’s second-quarter profit will increase further from the first quarter. He said the ongoing war continues to keep crude oil prices elevated, which is expected to support high petrochemical product prices.
The war has severely damaged some energy facilities and petrochemical plants in the Middle East, significantly disrupting petrochemical production capacity. Repairs to these facilities are expected to take a long time, Kuo noted.
He added that infrastructure development in India and Vietnam has boosted strong demand for plastics and petrochemical materials, which is expected to benefit the company’s revenue.
To speed up its transformation, the company plans to invest NT$29.2 billion in developing new chemicals and materials for semiconductor manufacturing and the healthcare sector.
Formosa Plastics said it has partnered with Sumco Corp. to establish Formosa Sumco Technology, which focuses on 12-inch and 8-inch wafer manufacturing. The company has also supplied TSMC with chemicals for chip production and wafer cleaning.
In addition, the company is expanding carbon fiber production capacity at its Kaohsiung plant and building a new facility in Yunlin dedicated to chemicals and chemical fibers.
It added that it is building a hexene plant in Texas, scheduled to begin operations in August. It is also developing a chemical terminal in China’s Ningbo for the loading, storage, and transshipment of chemicals.
