Nan Ya Plastics increases investment in Texas plant
Taipei, Sept. 16 (CNA) Nan Ya Plastics Corp., one of the major entities under the conglomerate Formosa Plastics Group, is increasing its investment in a plant in Texas in the United States to boost its production of ethylene glycol.
In a statement Tuesday, Nan Ya Plastics said it is investing an additional US$160 million in its subsidiary in Texas, which operates an ethylene glycol plant there.
The funds are being used to implement the third-phase expansion of production at the plant, and will boost annual production from 360,000 tones to over 800,000 tons, the company said.
Construction of a facility to accommodate increased production is underway and will be completed in October or November, with mass production scheduled to begin in December, Nan Ya Plastics said.
The third-phase expansion project, which had been scheduled for completion in the first half of the year, was delayed due to COVID-19 pandemic.
Nan Ya Plastics had already invested US$277 million in the subsidiary company in Texas, and the new funds of US$160 million will bring its investment in the plant to US$437 million, which accounted for 3.12 percent of its total assets.
Global demand for ethylene glycol, one of the major components of polyester products, is likely to grow 3.5 percent per year in the long term, despite the current oversupply, according to market analysts.
This year, demand is expected to show an annual rise 1.3 percent, according to analysts.
They said the Nan Ya Plastics plant in Texas has been generating stable profits, and the expansion project is expected to sharpen the company's competitive edge.
Meanwhile, Nan Ya Plastics said its board of directors on Tuesday approved a plan to issue NT$10 billion (US$340 million) in unsecured corporate bonds this year to repay the company's debt.
The bonds will comprise three tranches -- NT$3.2 billion in five-year year bonds with a coupon rate of 0.49 percent, NT$3.8 billion seven-year bonds with a rate of 0.58 percent, and NT$3 billion 10-year bonds with a rate of 0.62 percent.
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