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Nan Ya Plastics profits from DRAM subsidiary

TAIPEI, Taiwan -- Nan Ya Plastics Co. (南亞) yesterday announced that it is poised to benefit from a rebound in the performance of its memory-making subsidiary at the company's shareholders' meeting yesterday.

The company's DRAM memory maker subsidiary Nanya Technology Co. (南科) recorded significant improvement in performance results over the course of last year, on account of improving conditions throughout the global memory market.

Nanya Technology in the first quarter of this year recorded a net income of NT$6.1 billion, of which NT$2.3 billion is contributable to its parent corporation. In addition, a shareholders' meeting earlier approved a 90-percent capital reduction totaling NT$215.6 billion. According to Nan Ya Plastics Chairman Wu Chia-chao (吳嘉昭), upon completion of the capital reduction, accumulated losses derived from its investment into the memory maker subsidiary may recede to the NT$17.4 billion benchmark.

Meanwhile, foreign institutional investors are expecting the DRAM producer's performance to rebound from the red, and yield a net income of about NT$17.4 billion, vastly exceeding the NT$8 billion of last year. In addition, Nan Ya Plastics Co. stands to receive a windfall of NT$6.4 billion from the projected earnings of NT$17.4 billion by Nanya Technology this year, through the holding of a 37-percent stake in the memory maker subsidiary.

Prospects for Nan Ya Plastics however, remains under pressure, due to heightened competition from Middle East-based natural gas producers, and U.S.-based shale gas producers, in addition to the overflow of production output originating from China's petrochemical sector. The company noted that demand for electronic materials, plastics and polyester manufacturing remains robust, and that it is not expecting significant slumps in performance.

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