MOEA stumps plans by 4 Taiwanese petrochem majors to invest in China's Fujian province

19-Aug-11

Inking of an agreement by four petrochemical companies in Taiwan with Chinese partners for a proposed petrochemical project in Fujian Province by 2015, at the earliest; has met with opposition from the Ministry of Economic Affairs (MOEA). As per CNA, this is because currently, there is a ban on Taiwanese businesses constructing naphtha crackers in China, because they could spur large fund outflows and affect investment in Taiwan. So far, the government has allowed Taiwanese companies to invest in the middle and downstream sectors of China's petrochemical industry on a case-by-case basis, but continues to evaluate the possibility of allowing local firms to build naphtha crackers in China. The signing majors include China Petrochemical Development Corp., Tung Chemical Corp., LCY Chemical Corp., USI Corp. to set up a joint venture- Gulei Petrochemical Co., which will be a 50:50 JV between the Taiwanese consortium and Fujian Petrochemical Co. Feasibility studies are underway on the Gulei project with plans to proceed with the investment after government permission and approvals are received.