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Kuokuang investors question government's petrochemical policy

2011/04/22 23:26:49

Taipei, April 22 (CNA) A leading private investor demanded toknow where Taiwan's petrochemical industry policy was after PresidentMa Ying-jeou halted a major investment project in central TaiwanFriday.

"We can do without the Kuokuang petrochemical project, " saidPreston Chen, chairman of Ho Tung Chemical Co. which had a 3 percentstake in the NT$600 billion project. "But Taiwan cannot afford not tohave a policy on the petrochemical industry."

With no policy for the industry, "how do we develop a so-calledhigh value-added petrochemical industry?" asked Chen, who is alsochairman of the Taipei-based Chinese National Federal of Industries.

The president decided against going ahead with the government-ledproject in Changhua County's coastal wetlands, worrying that it couldlead to "unbearable ecological consequences" for the area.

CPC Corp., Taiwan, a state-run enterprise, owns 43 percent ofshares in Kuokuang Petrochemical Technology Co., the consortium thathas proposed the naphtha cracker investment project.

CPC Chairman Chu Shao-hua said his company, as the biggestshareholder, would try to convince other shareholders not to disbandthe company "within the next six months to a year."

Chu said all investors had worked hard over the past five yearsto try to make the project a reality. "It's really unfair for privateinvestors," he said.

Kuokuang General Manager Tsao Ming was emotional when he learnedthat a major investment project that had been on the table for fivelong years was now halted.

"Five or 10 years down the road, history will reveal all thefacts and people will know at that time who is lying today, " Tsaosaid.

Kuokuang Chairman Chen Bao-lang said he would discuss with allshareholders what to do next, including the possibility of moving theproject abroad.

Economic Affairs Minister Shih Yen-shiang said it would be verydifficult to find another 2,000-hectare plot needed to build such alarge complex of plants elsewhere in Taiwan.

He said his ministry will begin planning to lift a current ban onTaiwanese investors setting up naphtha cracking plants in China, aslong as they are capable of sending the output back to Taiwan fordownstream manufacturers.

He stressed that the government will not give up developing thepetrochemical industry and will do its best to make up for theshortfalls in the supply of petrochemical materials.

In addition to upgrading the CPC's third and fourth naphthacrackers to ensure a basic supply of ethylene for domestic use, hesaid the government would build a shipping and storage center inDalin, Kaohsiung.

If the fifth cracker, set to move from the current site inKaohsiung in 2015, were to be moved overseas, the government wouldsee to it that it would ship 300,000-400,000 tons of ethylene back toTaiwan each year, the minister said.

(By Lin Shu-yuan, Pan Chih-yi, Kao Chao-fen and S.C. Chang)