Taiwan government approves first domestic proposal to set up petrochemical plant in Mainland China

28-Jan-14

Taiwan government has approved a proposal by domestic companies to put a petrochemical plant in China, the first such approval since authorities lifted restrictions on Taiwanese investment in naphtha cracking plants on the mainland, as per CNA. The Investment Commission under the Ministry of Economic Affairs (MOEA) gave the green light to USI Corporation and six other Taiwanese companies to invest US$263.62 ml in a joint venture in Fujian's Zhangzhou Gulei Economic Development Zone. However, the approval has came with some conditions- The new company, which will produce seven products including ethylene, propylene and 1,3-butadiene, will need to supply those products to Taiwan as necessary. The seven Taiwanese firms have pledged in their investment plan to ship 300,000 tons of its annual production of 1.2 mln tons of ethylene to Taiwan should there be a shortfall in Taiwan's own production. The Taiwanese investors will also need to step up their research and development and the manufacturing of high-value products in Taiwan and report on their progress annually from 2015 through 2019. Taiwan lifted the ban on domestic companies investing in China's petrochemical industry and infrastructure in October 2013.