Formosa Chemicals to shut down Taiwan plant amid regulatory battle

Formosa Chemicals and Fibre

30/09/2016 06:53

TAIPEI, Sept 30 (Reuters) - Formosa Chemicals & Fiber Corp 
 1326.TW , a unit of Formosa Plastic Group, said on Friday it 
will shut down its plant in central Taiwan beginning next week 
as the local government declined to renew permits for its 
cogeneration equipment.   
    Formosa Chemicals has applied to renew the license for the 
power plant equipment, however the Changhua county government 
insisted the company apply for a new permit because the amount 
of coal and steam used during the manufacturing process has 
changed over the intervening decades, said vice chairman Hong 
Fu-yuan.         
    The plant mainly makes textile-related materials, such as 
rayon staple fiber and nylon fiber.  
    "We are facing a major crisis," said the vice chairman. "We 
have stopped shipping raw materials used in making products 
today," he said, adding that the application for renewal has 
been rejected 37 times by the county government.  
     County government officials couldn't be reached immediately 
for comment.  
     A shutdown of the plant would affect 1,000 workers, the 
vice chairman said. About half of its output is shipped 
overseas, and the plant generates about T$10 billion ($320  
million) in annual revenues, accounting for about 3 percent of 
the company's total revenue.    
    Shares of the company closed down 1.3 percent, roughly in 
line with the main index's  .TWII  1.12 percent slide.  
 
 (Reporting by Faith Hung; Editing by Christian Schmollinger) 
 ((faith.hung@thomsonreuters.com; 8862 2500 4893; Reuters 
Messaging: faith.hung.thomsonreuters.com@reuters.net)) 
 
Keywords: FORMOSACHEMICALS TAIWAN/