Formosa Plastics board says it has ‘high hopes’ for Q4 performance

By Kuan-lin Liu, The China Post

Formosa Plastics Group (FPG) held a press conference on Tuesday, Dec. 6 to discuss its production and sales performance for the month of November.

Speaking at the conference were Formosa Plastics Corporation Chairman Lin Chien-nan (林建男), Nan Ya Plastics Corporation Chairman Wu Chia-chao (吳嘉昭), Formosa Chemicals & Fibre Corporation Deputy-Chairman Hung Fu-yuan (洪福源) and Formosa Petrochemical Corporation General Manager Tsao Ming (曹明).

FPG brought in total revenues of NT$116.649 billion in November, a 4 percent increase from October’s NT$112.160 billion and a 5.7 percent increase from the NT$110.308 billion from last November.

Of the four companies under the FPG, the Formosa Plastics Corporation (FPC) contributed significantly to the growth with a 15.1 percent growth in revenue made in November (NT$17.421 billion) compared to revenue made in October (NT$15.133 billion).

Chairman Lin explained that both the amount and the price of sales had gone up for the month of November, pointing particularly to the increase in demand for PVC in Australia, Canada, the United States, and China.

The only one of the four companies to post a decline in revenue was Formosa Petrochemical Corporation (FPC).

FPC made a revenue of NT$47.801 billion in November compared to a revenue of NT$48.115 billion in October. The difference (about NT31.395 million) marks a 0.7 percent decline.

FPC’s General Manager Tsao attributed to the company’s November performance to the drop in petroleum prices globally and the overproduction of petroleum that was then sold at this lower price. Future Prospects Looking ahead, representatives from all four companies said that their respective companies will have a better fourth quarter than they did their third quarter, sparking hope for FPG’s overall growth at the end of the year.

However, Lin, Wu and Hung stated that next year’s first quarter for their respective companies may be tough due to the pause in production that will take place during the Chinese New Year holiday. Nonetheless, all three were hopeful that their companies’ performance would pick up around March. Conservatively Optimistic Tsao, on the other hand, was conservatively optimistic about next year’s first quarter outperforming this year’s much anticipated fourth quarter: “The rise in the price of fuel could mean that the first quarter could be better than the fourth quarter. During the press conference, both Lin and Hung mentioned the incoming Trump administration in the U.S. as a source of uncertainty for the global economy. Uncertainty of Global Politics Hung said he was uncertain how “the relationship between Trump and Xi Jinping would affect (the company’s) production in China.”

Other contributors to the uncertainty, Lin elaborated, included “Brexit and how changes in the government in Europe could affect the region’s economy,” and OPEC’s proposed limits on petroleum production.

Overall, however, Hung stated that they could expect FPG to perform “around the same next year as we have this year.”