Formosa Plastics' profit rise as demand grows in China

Chinese economy has recorded a 9.5% growth in the first nine months of 2004. China tightened credit last year in an effort to slow investment in property and other industries to prevent capacity from outstripping demand. Growth was not clamped down by China's measures to cool its economy, and the whole petrochemical industry expanded significantly last year. Robust economic growth in China has led to growth in various sectors. A boom in construction industry has lead to increased demand for PVC and its products: plastic pipes, flooring and window frames. PVC prices in Taiwan rose to US$882 a metric ton last year from US$634 in 2003. Formosa Plastics, part of Taiwan's largest industrial group, sells about 35% of its products to China. Formosa Plastics Corp., the world's second-largest maker of PVC, had a bigger than expected rise in profit in the fourth quarter after increasing demand from China pushed up product prices. Q4 sales at Formosa Plastics, which also makes polyethylene for use in packaging and bottles, increased 32% to NT$32.6 billion. Unaudited net income for last year was NT$36.3 billion, more than double the NT$16.6 billion posted in 2003.
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