Issue Date: August 8, 2011
Taiwan Fires at petrochemical complex force a shutdown by Formosa Plastics
Taiwan’s government has ordered Formosa Plastics Group to shut down much of its Mailiao petrochemical complex in phases and to conduct thorough safety inspections. The order follows the latest of seven fires that have plagued the facility over the past year.
Taking responsibility for all the accidents, three senior executives of Formosa Petrochemical, including its chairman and its president, have resigned. A core company in the Formosa group, Formosa Petrochemical is the largest operator of facilities at the giant Mailiao site.
Worth more than $10 billion, Mailiao came on-line in 1998 after Formosa fought the government and nearby residents for 13 years over environmental concerns. Relations between the Formosa group and residents living near its facilities have historically been poor. After the most recent fire, local residents of Yunlin County, where Mailiao is located, demanded a complete halt to operations at the complex.
Formosa says it does not know what caused the most recent fire, which occurred on July 30 in a propylene unit. The company says it will comply with government orders to conduct inspections but that it will need to hire foreign technicians because there aren’t enough people in Taiwan with relevant experience.
The credit rating agency Taiwan Ratings revised its debt outlook for the Formosa group to “negative” because closures of plants at Mailiao will put pressure on the group’s revenues.
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