Taiwan to build petrochemical plant in China
January 28, 2014, 12:10 am TWN
TAIPEI--Taiwan's government approved yesterday a proposal by domestic companies to put a petrochemical plant in China, the first such approval since authorities lifted restrictions on Taiwanese investment in naphtha cracking plants on the mainland.
The Investment Commission under the Ministry of Economic Affairs (MOEA) gave the green light to USI Corporation and six other Taiwanese companies to invest US$263.62 million in a joint venture in Fujian's Zhangzhou Gulei Economic Development Zone, the MOEA said.
The investment plan's approval came with some conditions attached.
The new company, which will produce seven products including ethylene, propylene and 1,3 butadiene, will need to supply those products to Taiwan as necessary, the government said.
The seven Taiwanese firms have pledged in their investment plan to ship 300,000 tons of its annual production of 1.2 million tons of ethylene to Taiwan should there be a shortfall in Taiwan's own production, according to an official familiar with the case.
The Taiwanese investors will also need to step up their research and development and the manufacturing of high-value products in Taiwan and report on their progress annually from 2015 through 2019.
The Gulei Economic Development Zone was set up in July 2003 on the Gulei Peninsula in Zhangzhou mainly to attract petrochemical companies from Taiwan.
Taiwan lifted the ban on domestic companies investing in China's petrochemical industry and infrastructure in October 2013.