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European debt crisis to last for at least one more year: FPG head

The European debt crisis is likely to drag on for at least a year, and the ending of the global downturn that it triggered is nowhere in sight, said Wang Wen-yuan, chief executive of the Formosa Plastics Group (FPG), yesterday.

He made the remarks during the shareholders' meeting of Formosa Petrochemical Corp. yesterday.

The petrochemical industry is expected to be slower in the third quarter than the second, and the timing of a rebound is hard to say, he said. What the Formosa Plastics Group will do in the meantime is to find additional revenue sources and control raw materials.

As for when the European debt crisis will be over, Wang said the crisis will continue for at least a year. He added that the loosened monetary policies launched by countries around the world are expected to spawn inflation.

He said the 2008 financial meltdown was short-lived yet produced a strong impact, forcing countries around the world to loosen monetary policy. The European debt crisis, on the other hand, had effects that were more widespread. While its impact wasn't as strong, it will last longer.

He said China accounts for about 40 percent of Taiwan exports and is an important market for the Formosa Plastics Group.

While China's move to lower interest rates by 0.25 percent may spur demand, it won't do much to help China emerge unscathed in the global downturn, he said.

As for when the global economy may stage a rebound, he said it's hard to predict.

β€œThe world is changing too fast,” he said.

Earlier this month, FPG reported its four major subsidiaries β€” Formosa Plastics Corp., Formosa Petrochemical Corp., Formosa Chemicals and Fiber and Nanya Plastics β€” had total May revenue of NT$119.657 billion, a decline of 16.1 percent compared to April.

During the first five months, the group had total revenue of NT$666.957 billion, a decline of 3 percent from the same period last year.

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Wang Wen-yuan, chief executive of the Formosa Plastics Group, speaks during the shareholders' meeting of Formosa Petrochemical Corp., yesterday. He said the European debt crisis is likely to drag on for a year.(CNA)

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