Formosa Plans To Bring New $625 Million Ethylene Unit Online By The End Of August

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An advisory by Industrialinfo.com (Industrial Information Resources, Inc.; Houston, Texas). Formosa Plastics Corporation Texas (Point Comfort, Texas), a subsidiary of Formosa Plastics USA (Livingston, New Jersey), is now in the final construction phase of their second major expansion program totaling $1 billion at the Point Comfort complex. Initiated in late 1998, the bulk of this investment added a second ethylene unit at a cost of $625 million, and will increase ethylene capacity by 1.8 billion lbs/year. The remaining $375 million investment included a Polypropylene (PP) unit that came online last April and a High Density Polyethylene (HDPE) unit scheduled to come online in December 2001.

Located 130 miles southwest of Houston, the Point Comfort plant came online in 1983 only to produce Vinyl Chloride Monomer (VCM) and Polyvinyl Chloride (PVC). Then in 1988, Formosa announced a $1.5 billion expansion program to transform the site into a major petrochemical complex including a 1.6 billion-lbs/year ethylene unit, their first in the US. That project announcement caused great alarm among US industry players who feared the implications of excess capacity and the potential impact on their own profits.

Today, the Texas site has grown to cover 1,800 acres employing over 1,600 full-time employees and approximately 400 contract workers. The Point Comfort complex primarily produces Ethylene, Chlorine/Caustic Soda, Ethylene Dichloride (EDC), Linear Low Density Polyethylene (LLDPE), High Density Polyethylene (HDPE), Ethylene Dichloride (EDC) and Polypropylene (PP).

Looking to the future, John Chen, Project Engineering Manager at Formosa Plastics Corporation Texas, stated Taiwan headquarters wants to wait before making any additional project decisions. They want to see if gas prices stabilize long enough to make it feasible. Many factors, including product over-capacity, determine how we will expand.

Formosa Plastics USA is a privately held company whose chemical manufacturing operations have grown to include $1.7 billion in annual sales revenue, more than $3.5 billion in assets, and 2,600 full-time employees. Headquartered in Livingston, New Jersey, Formosa owns and operates three vertically integrated chemical manufacturing subsidiaries located in Delaware City, Delaware; Baton Rouge, Louisiana; and Point Comfort, Texas. Taiwan-based Formosa Plastics Group is the parent company, heading up a global organization with $12 billion in annual sales.