FORMOSA PLANS $650 MILLION TEXAS EXPANSION

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CHICAGO — Formosa Plastics Corp. USA announced a major expansion of its polyolefins facilities in Point Comfort, Texas, Monday at NPE 1997 in Chicago. The company, a global leader in PVC resin production, will spend $650 million in the next four years to build two plants and expand three existing plants.

A new ethylene plant will provide 1.8 billion pounds of capacity, while a new polypropylene plant will crank out 660 million pounds each year.

In addition, Formosa will expand its existing high density polyethylene plant 150 percent, sodium hydroxide capacity by 20 percent and ethylene dichloride capacity by 20 percent.

The expansion, set for a 1998 start, will create 200-300 jobs. The announcement comes as the company is finishing a $101 million construction project expected to be up and running next year.

Paul Huang, vice president of the company's olefins and polyolefins business, said the expansion is part of Formosa's continued entry into areas where it considers itself ``a small player.''

Formosa, which is not exhibiting at NPE, began U.S. production of PP and HDPE in 1994, adding linear low density PE the following year. Currently, its annual PP production stands at about 500 million pounds, while its combined PE capacity totals 1 billion pounds. Those totals include a smaller PP and PE facility in Baton Rouge, La.

Huang said his division will continue Formosa's self-sufficient business practices in trying to establish itself in polyolefins.

``The only way for us to survive in the market is to be a low-cost producer,'' Huang said. ``Other companies in the market will say `Put a plant together for me,' but we do construction for ourselves. We also buy our own equipment on a global scale and license technology instead of being into research and development.''

Huang said licensing saves the company 20-30 percent in capital investments. Formosa currently uses BASF's PP technology, but will use PP technology from Chisso Corp. of Japan for its expansion. HDPE technology is leased from Japan's Nippon Petrochemical, while LLDPE technology is provided by BP Chemicals Ltd.

Other Formosa developments include the start of a communications department and a consulting firm to help other petrochemical makers attain the ISO 14001 environmental standard, which Formosa achieved earlier this year.

``It might be a Chinese tradition to be low-key in the market and not go out much, but we're trying to improve communications,'' Huang said of the new communications department.