Formosa's Vietnam operations damaged during anti-China rioting

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Taiwan’s Formosa Plastics said May 14 that its factory campus in Dong Nai, Vietnam, was damaged as part of widespread rioting connected to maritime boundary and oil drilling disputes between Vietnam and China.

News reports said several thousand Vietnamese residents rioted May 13 at industrial parks in Binh Duong and Dong Nai provinces in the southern part of country, setting fires, damaging gates and windows and in some cases plundering computers and other property. International media reported hundreds of people were arrested, with estimates ranging from 200 to 400 people.

Formosa, which has production for biaxially oriented polypropylene and fibers at the Dong Nai site, said in a statement on its website that a mob of about 300 people broke into its facilities before midnight local time.

The company said it called police at around 10:30 p.m., and the county chief arrived with his team, but they had little impact on stopping the mob from entering the industrial park. Rioters did not leave until about 4 a.m., so damage was still being assessed.

The company gave no reports of deaths or injuries, and a spokesman for the Nhon Trach Industrial Park also told Plastics News there were no reports of people being hurt or killed.

Kaohsiung, Taiwan-based Formosa said it deeply regrets the incident and said the foreign-owned factories being targeted by rioters have no connection to the political dispute over maritime boundaries between China and Vietnam.

It said it also regrets the inability of the Vietnamese government to handle riots and protect foreign investment. The company said it believes foreign investors will have doubts about the security in Vietnam, and will step back on new investments. It urged Taiwan’s government to pressure Vietnam to adopt effective protection measures.

A report from Reuters news agency said that “the brunt [of the damage] appears to have been borne by Taiwanese companies in the zones … as rioters mistook the firms to be Chinese-owned.”

The New York Times quoted media in South Korea stating that 50 Korean companies also were damaged during the rioting. Reuters quoted a spokesman for exporter Li & Fung, which supplies toys, clothing and other consumer products to U.S. retailers, as saying some of its suppliers in Vietnam halted production as a precautionary measure.

The Dong Nai site is a large production base for Formosa.

The company has invested $1 billion there thus far, setting up yarn, polyester fiber and BOPP production, and it announced late last year it was spending another $500 million, including $100 million for a 200,000-metric-ton-per-year polystyrene factory.

Formosa is currently Vietnam’s largest foreign-invested company, according to an English language website of the Communist Party in Dong Nai.

A series of demonstrations escalated in Vietnam in recent days, after China moved an oil drilling rig into waters claimed by both countries. Coast guard vessels from the two nations used water cannons and tried ramming each other’s vessels to disrupt operations.

Press reports said foreign factories were also damaged at Singaporean-owned industrial parks in Vietnam.

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