 2014-01-22 |
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Commercial Times Reporter: Peng Xuan-yi / Taipei Reported on January 22, 2014, 04:09
Due to cost considerations and China's accession to the ASEAN Regional Economic Integration, the ASEAN market has become a new hotspot for establishing mobile phone and electronics factories. Companies such as Formosa Plastics (1301), Changchun Group, and ACHEM Chemicals (1715) are expected to see benefits from their investments in Singapore and Vietnam. Analysts estimate that operations at Changchun and YC (4306) are expected to grow by 20-30%.
Analysts point out that China's entry into the ASEAN economic agreement will facilitate exports to the Chinese market from Southeast Asian production sites, creating new development opportunities in the region. Since 2011, Changchun Group has been implementing over $4 billion in investment plans across factories in Singapore, China, and Taiwan, with most of the production capacity coming online in the past six months.
The investment in Singapore includes a supply contract with Shell (Shell Eastern Petroleum) for a total of 325,000 tons of ethylene and propylene annually to support raw material expansion in China. The first and second phases of the Singapore project were completed last September, strengthening this year’s operations.
YC’s adhesive tape production base includes facilities in Taiwan, China, and Vietnam, with BOPP (Biaxially Oriented Polypropylene) and PVC tape production ranking second globally. To capture the adhesive tape market, ACHEM has added new OPP (Oriented Polypropylene) capacity of 85 million square meters in Vietnam, along with new annual production capacities of 20 million square meters for hot-melt adhesives and PE protective films, boosting revenues.
Additionally, the Formosa Plastics Group currently focuses on textile, fiber, and plastic secondary processing plants in Vietnam, with recent additions to the steel sector. Targeting opportunities from electronic clustering, Taiwan’s Hsing Yeh is set to invest $500 million (about NT$14.8 billion) in polyester yarn, BOPP, spinning, cogeneration, and PS (polystyrene) projects. The new PS plant is planned to have an annual production capacity of 200,000 tons, with BOPP becoming a key focus due to its significantly better profit margins compared to Taiwan and China. |
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