Formosa Plastics Group foresees revenue drop

Formosa Plastics Group (FPG) has forecast H2-2011 revenue to fall by about 20-30% from the first half, amid uncertainties over the global economy, China's tighter monetary policy, and the temporary closure of six of the group's plants, as per FPG Chairman estimated at the shareholders meeting of the group's flagship unit Formosa Plastics Corp. that group revenue would fall by between NT$150 billion (US$5.18 billion) to NT$230 billion in H2. Formosa Plastics Chairman admitted that June revenue could drop by 20-30% because of China's tighter monetary policy, and the shutdown of its polyethylene plant in the group's petrochemical complex in Mailiao, Yunlin County following two fires at the complex in May. The fires led the county government to order a halt to operations of the Formosa Plastics plant and five other plants operated by group subsidiary Nan Ya Plastics in the complex for an overall safety inspection. Nan Ya estimated that the closure of its factories on June 1 will cost it NT$5 billion in monthly revenue, and the Formosa Plastics plant closure could cost the group another NT$3 billion per month.
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