Formosa to add $500m investment
Formosa to add $500m investment
Taiwan’s largest industrial group Formosa is going to spend an additional $500 million to expand its textile and plastics production capacity in Vietnam, in anticipation of the zero-tariff treatment for exports after Vietnam joins Trans-Pacific Partnership agreement.
Taiwan’s Taipei Times quoted Hong Fu-yuan, president of Formosa Industries Corp, as saying that the group would spend $100 million to build a 200,000 tonne capacity polystyrene factory in the southern province of Dong Nai. The factory will serve growing demand for polystyrene products as electronic and home appliance companies continue to flock to Vietnam.
In addition, Formosa will spend $400 million to build a cogeneration power plant to supply its factories and increase the capacity of yarn-making, polyester fibre factory and biaxial oriented polypropylene factories in Dong Nai.
An anonymous official at the Dong Nai Provincial Industrial Parks Management Authority also confirmed that Formosa had already informed the authority of its massive expansion plans. However, he said the plan would take time because the investor had to complete the necessary investment procedures.
“It’s no surprise to us that Formosa has expanded investment in Dong Nai, because it has successfully operated here,” said the official.
Formosa currently is the largest foreign invested company in Vietnam in term of committed investment capital. In Dong Nai, the Taiwanese group has invested approximately $1 billion into a yarn, polyester fibre and biaxial oriented polypropylene complex.
According to the local authority, Formosa recorded turnover of $808 million last year, up 109 per cent from 2011.
Once the investment expansion plan is approved by Dong Nai authorities, Formosa’s total investment capital in the province will reach $1.5 billion.
Besides Dong Nai, Formosa is building a mammoth steel and seaport complex in the central province of Ha Tinh, worth approximately $10 billion. The group has completed the construction of office buildings, guest-houses and residential buildings for workers. Other works such as the seaport and the first blast furnace are under construction. The blast furnace will begin operations in 2015.
Formosa told VIR in May that it had decided to increase the total annual production of this steelwork to 22.5 million tonnes of steel from a current 7.5 million tonnes. The total investment cost for this project will increase from $9.9 billion to $27 billion, putting it on the map as one the world’s largest integrated steelworks.
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