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Taiwan to invest $3.3 billion to upgrade Petrochemical Industry

Taipei spots Petrochemicals as a strategic sector

December 2011 – In an effort to maximize the economic value of petrochemical materials and minimize carbon emission, the Ministry of Economic Affairs (MOEA) of Tawain set up the  High Value Petrochemical Industry Promotion Office (PIPO) with the missions to:

 – Establish R&D centers

 – Form information platform for the strategic alliances,

 – Foster international cooperation projects

 – Obtain critical technology and recruit petrochemical industrial talents

 – Generate incentive programs encouraging R&D activities.

Representatives of major players in Taiwan’s petrochemical industry also signed a memorandum and a letter of intent to establish a cross-industry strategic alliance, with participants to include:

 – Formosa Plastics Group

 – Chinese Petroleum Corp.,

 – TSRC Corp.,

 – Kenda

 – Federal Group

 – Sinbon

 – Pontex

 – Eternal Chemical

 – Plastics Industry Development Center.

In 2011, Taiwan’s petrochemical industry generated $62.7 billion (NT$1.9 trillion) production value with 4.7% growth according to the Industrial Economics & Knowledge Center (IEK).

But in 2012, according to the same IEK institute, the Taiwan’s petrochemical industry is likely to see its output value slightly shrink as it feels the heat of emerging competition and debt crisis in Europe.

The IEK Center sees Taiwan’s petrochemical industry likely to lose its growth momentum mainly due to:

 – Skyrocketing prices of petrochemicals feedstock

 – Declining supply as Asian producers which have begun scheduled plant maintenance

 – Eroding industry’s overall growth.

The growing investments in petrochemical facilities in emerging countries along with the lingering debt turbulence in EU members countries will increasingly impact exports of Taiwan’s petrochemical industry, especially when the global economic doldrums is thought to severely dampen market demands for oil worldwide throughout the year.

Therefore, the analysts project the industry’s annual output to reach $62.7 billion (NT$1.9 trillion) production value in 2011 for a 1.1% yearly decline in 2012.

Taiwan plans 20 High Value Petrochemicals Projects

Because of the major role of the petrochemical industry the Taipei Government is reacting through the Ministry of Economic Affairs in creating  the  High Value Petrochemical Industry Promotion Office (PIPO)

This  High Value Petrochemical Industry Promotion Office (PIPO) is planning  a $3.3 billion (NT$100 billion) total value of the investments.

With this amount, the PIPO is planning in Taiwan:

20 investment projects to upgrade the petrochemical industry

 – To establish at least three R&D centers.

The purpose of this capital expenditure is to transform Taiwan’s petrochemical industry into a high-value hydrocarbon products manufacturing sector.

In parallel of these capital expenditures to invigorate the  Taiwan’s petrochemical industry, some Taiwanese Chemical groups, such as Kuokuang Petrochemical are planning to invest $10-$12 billion in a new integrated petrochemical complex in Pengerang, Johor, southern Malaysia, close to the $20 billion Petronas Rapid project. 

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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