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FCFC to Expand Investments in Vietnam
2007/11/09
Taipei, Nov. 9, 2007 (CENS)--In line with the expansion project launched by its affiliate-Formosa Taffeta Co., Formosa Chemical & Fibre Corporation (FCFC), one of Taiwan`s leading manufacturers of nylon, has recently resolved to establish an integrated plant for nylon and spun yarn in Vietnam, which is expected to begin mass production in 2009 at the earliest.
If everything goes according to plan, FCFC, a subsidiary of the Formosa Plastics Group (FPG), will be the first domestic nylon manufacturer to invest overseas. The FCFC`s move is expected to inspire downstream firms to follow suit.
Five years ago, FPG`s Nan Ya Plastics Corporation, FCFC, Formosa Taffeta teamed up with King Car Enterprise Co. to forge a special integrated textile zone in Vietnam by establishing the Formosa Industries (Vietnam) Co. The joint-venture firm focuses on the development and production of polyester-related products.
It is estimated that FCFC will invest over NT$10 billion (US$308.64 million at US$1:NT$32.4) to produce nylon in Vietnam, including installation of production equipment and a power plant.
It is said that Y.T. Wang, co-founder of the FPG, approved the FCFC`s overseas investment project in mid-October.
The expansion project launched by FCFC will proceed in four construction stages. The first construction stage will focus on the establishment of yarn-spinning equipment with two production lines with daily capacity of one million metric tons of polymer or one line with 1.3 million metric tons.
In fact, the FPG already made a fact-finding tour of mainland China aiming to find suitable production sites to produce nylon three years ago; but such plan was scrapped and the FPG resolved to go south instead. FPG said over the past few years, the mainland has gradually lost its advantage to attract foreign investors because of the rising labor wages and environment-protection costs.
On the other hand, Vietnam, after joining in the World Trade Organization, has been able to attract many foreign investors in the apparel sector. Besides, Vietnam, being an ASEAN member, is eligible for preferential tariffs when exporting products to the member nations of the ASEAN (Association of Southeast Asian Nations).
It is predicted that FPG will launch another massive investment project in Vietnam in the foreseeable future, which could be even bigger than the ethylene investment project that has been set up in the mainland.
(by Ben Shen)
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