The Chinese Petroleum Corporation plans immediate construction of two plants to develop Taiwan's petrochemical industry. A naphtha cracking plant will supply ethylene, propylene, and butadiene, and an aromatic extraction factory will produce such intermediates as benzene, toluene, and xylenes.
The naphtha cracking plant must be completed by the end of 1967. CPC has signed a contract with the American-financed Taiwan Polymer Corporation to supply 45 million pounds of ethylene annually for five years beginning in 1968. The contract was signed January 26.
Two phases of development have been planned for the naphtha plant. The first phase, to be completed by the end of 1967, will enable CPC to produce annually 50 million pounds of ethylene, 28 million pounds of propylene, 16.5 million pounds of C4 (of which 40 per cent is butadiene), 9.2 million pounds of benzene, and 6.1 million pounds of toluene.
The second phase will begin in 1968 or later, depending on demand. It will double production.
The aromatic extraction plant is an expansion of CPC's existing solvent work at Chiayi, which already supplies 1,000 tons of benzene, 3,000 tons of toluene, and 1,500 tons of xylenes a year. When the expansion project is completed, production will be raised to 13.2 million pounds of benzene, 30.8 million pounds of toluene, and 30.8 million pounds of mixed xylenes annually.
CPC is a government enterprise. The private Pioneer Chemical Corporation also has begun production of benzene, toluene, and xylenes. The company can supply 1.3 million pounds of benzene annually in addition to that for its own use.
Ethylene is an important raw material for making polyethylene, polyvinyl chloride (PVC), and styrene monomer, and all these are important raw materials for making plastic goods and synthetic rubber. Propylene is the source of acrylonitrile, which is a raw material for the manufacture of polyacrylic fiber, a kind of synthetic textile known by such commercial names as Orlon, Exlan, and, Cashmilon.
Taiwan has not yet produced synthetic rubber. One of the best synthetics is GR-S rubber, which uses butadiene as raw material. Benzene and mixed xylenes are sources of caprolactam and DMT, which in turn are raw materials in the production of nylon and polyester fiber. Mixed xylene also is used in the production of phthalic anhydride, which is raw material for making plasticizers for use in manufacturing plastics and paints. Toluene can be processed into TNT, an explosive.
A recent survey by the Industrial Development and Investment Center points out that except for PVC, Taiwan imports all the intermediates to support its plastics, synthetic textile, rubber, and paint industries. Thus the production of initial petro-chemicals by the two plants of the Chinese Petroleum Corporation will economize on foreign exchange.
Thermal Power Loan
The U.S. government's Export-Import Bank in January authorized a loan of US$31,233,000 to the Taiwan Power Company for the construction of a large thermal power plant at Talin near Kaohsiung.
The loan carries annual interest of 5.5 per cent and will be repaid in 14 years, beginning in June, 1970. Except for boilers, the generators and other equipment for the plant will be bought in the United States.
The plant will have installed capacity of 600,000 kilowatts. In addition to the loan, the Chinese government will put up the rest of the construction costs totaling US$38,946,000 and NT$1,299,320,000 (US$32,233 000).
Located 12 kilometers from Kaohsiung harbor, the plant will supply power to newly developed industrial districts. It will be completed in 1970 and will use diesel oil or coal as fuel.
The Taiwan Power Company in January completed a hydro station at Liwu near Hualien in eastern Taiwan. It has capacity of 19,000 KW and will supply the needs of new industrial plants in the Hualien area.
Built along the famous East-West Cross Island Highway, the Liwu power plant uses water from a new reservoir. Construction took two years and cost NT$45 million (about US$1.1 million).
Taipower already has installed capacity of 1,710,000 KW generated at more than 30 stations. Power generation has surpassed six billion kilowatt hours annually. The power rate is one of the lowest in the world. For industrial use, it is US$0.0072 per kwh as compared with US$0.0222 in Hongkong.
Under construction are these other power stations:
* A third thermal power plant with capacity of 200,000 KW at Shenao, northern Taiwan, to be operational in July.
* A thermal power plant at Linkou in northern Taiwan with installed capacity of 300,000 KW, to be completed in July, 1968.
* Third and fourth hydro-electric plants at Kukwan station in central Taiwan. Now beginning operations, the plants have capacity of 45,000 KC each.
* Two hydro-electric plants on the Tachien River, each with capacity of 90,000 KW. Completion is expected in 1969.
Foreigners Profit
A survey of the 86 foreign-owned industries in Taiwan shows 92 per cent of them are doing a brisk business.
The survey was jointly conducted by the Council for International Economic Cooperation and Development, Ministry of Economic Affairs, Foreign Exchange and Trade Commission, and Ministry of Finance.
Seventy-four companies had completed plants and the other 12 are not yet in production. Of the 74, 69 are doing well, 1 has suspended operation, 1 has been rented to a Chinese, 1 has withdrawn its capital, and 2 have been shut down.
Of the 12 not yet in production, 4 are building plants, 1 is ready to begin operations, 1 has suspended construction, 1 has withdrawn, and 5 are yet to start construction.
American-financed enterprises total 39, followed by 38 with capital from Japan, 4 from Panama, 2 from Switzerland, and 1 each from Canada, the Philippines, and Hongkong.
For all 86 companies, the Chinese government has approved investment of more than US$86 million. So far about US$46 million worth of capital and equipment has arrived in Taiwan.
The operating firms had sales of NT$2.1 billion (US$52.5 million) in 1964, of which NT$360 million (US$9 million) was exported. They paid NT$310 million in taxes to the Chinese government and employed about 20,000 Chinese workers.
The companies are engaged in the production of chemicals, textiles, food, fertilizers, mineral products, pharmaceuticals, machinery, communication supplies, electrical appliances, musical instruments, and glass. Some companies are engaged in banking and transportation.
Following are the major foreign companies operating in Taiwan:
A. American investment:
Socony Mobil, Allied Chemical (Mobil China Allied Chemical Industries Ltd.), urea fertilizer, 1960.
American Cyanamid Company (Cyan amid Taiwan Corporation), pharmaceuticals, 1960.
Atlas Chemical Industries (Atlas Taiwan Corporation), industrial dynamite, 1962.
Charles Pfizer & Co. (Pfizer Taiwan Inc.), pharmaceuticals, 1961.
James A. Baker and James K. Yu (Young Brother Enterprises Inc.), glass manufactures, 1960.
Morgan Guaranty International Banking Corporation (China Development Corporation), banking, 1962.
Procter and Gamble Company (Procter and Gamble Taiwan Ltd.), detergent and bleach, 1962.
Gulf Oil Corporation (China Gulf Oil Ltd.), lubricating oils, 1963.
Chemtex, Inc. and T.I.M. Corporation International (China Man-Made Fiber Corporation), polyester fiber, 1963.
Singer Company (Singer Industries Taiwan Ltd.), sewing machines, 1963.
General Instrument Corporation (Taiwan Electronics Corporation), electronic components, 1964.
World Homes Inc. (Taiwan Development Corporation), public housing, 1964.
Sino-American Milk Products of America Inc. (Sino-American Milk Products of Taiwan Ltd.), powdered milk, 1964.
Louis Marx and Co. (Louis Marx Taiwan Corporation), toys, 1964.
National Distillers & Chemical Corporation (Taiwan Polymer Corporation), polyethylene, 1965.
Allied Chemical Corporation (Allied Chemical China Corporation), caprolactam, TRA and DMT, 1966.
Thomas Hsueh, Josephine Chen, Theodore Ginsburg, and Gene Allen (Argonaut Yacht Mfg. Co. Taiwan Ltd), yachts, 1965.
Compania De Comerico Y Finanzas S. A. and Celanese Corporation of America (Taiwah Acetate Fibre Company Ltd.), filament and yarn, 1965.
Eli Lilly and Company (Eli Lilly Taiwan Corporation), pharmaceuticals, 1965,
B. Japanese investment:
Takeda Pharmaceutical (Takeda Pharmaceutical Co. Ltd.), pharmaceuticals, 1962.
Tokyo Shibaura Electric Co. Ltd. (Tatung Engineering Co. Ltd.), transformers, capacitors, lightning arresters and switch gears, 1961.
Fuji Television Co. Ltd., Shibaura Electric Co. Ltd., Nippon Electric Co. Ltd., and Hitachi Ltd. (Taiwan Television Enterprise Company), television, 1962.
Tanabe Seiyaku Co. Ltd. (Taiwan Tanabe Pharmaceutical Co. Ltd.), pharmaceuticals; 1962.
Sanyo Electric Co. Ltd. (Taiwan Sanyo Electric Co. Ltd.), electrical appliances, 1962.
Shionogi Pharmaceutical Co. (Taiwan Shionogi Pharmaceutical Co.), pharmaceuticals, 1963.
Matsushita Electric Industry Co. Ltd. (Taiwan Matsushita Electric Co. Ltd.), electrical appliances, 1962.
Hitachi Ltd. (Taiwan Hitachi Ltd.), electrical appliances, 1964.
Yanmar Diesel Engine Co. and Iseki Agriculture Machinery Mfg. Co. Ltd, (China Agricultural Machinery Mfg. Co.), agricultural machines, 1960.
Kubota Iron Works K. K. and Mitsui Bussan K. K. (New Taiwan Agricultural Machinery Mfg. Co. Ltd.), agricultural machines, 1961.
Mitsuhishi Electric Mfg. Co. and Mitsuhishi Shoji Kaisha (China Electric Co.), fluorescent lamps, 1962.
Mitsuhishi Shoji Kaisha and Mitsuhishi Rayon Co. (Tai Ling Textile Co. Ltd.), textiles, 1962.
Yoshida Kogyo K. K. (Chih Chang Industrial Corporation), zippers, 1964.
Kyoei Steel Works Ltd. (Ming Fong Iron and Steel Works Ltd.), spring steel, 1965.
Gifu Seiren Co. Ltd., Toyo Rayon Co. Ltd., and Nippon Trading Co. Ltd. (Eastern Man-Made Fiber Dyeing Co. Ltd.), synthetic fiber, 1965.
D. Other investments:
Squibb Mathieson International Corp. (Panama) (Winchester Co. Ltd.), dry cells, 1963.
Mobil Investment S. A. (Panama) (Tait Chemical Co. Ltd.), formalin, urea glue, 1964.
Union Carbide Asia Ltd. (Hongkong) (Union Carbide Asia Ltd.), dioctyl phthalate, 1965.
19th Farm Group
The Republic of China has sent a farm demonstration team to work in Malawi. This is the 19th group dispatched to Africa since 1961.
The team consists of 10 farmers and 2 specialists. They arrived in Zomba, the capital, in January. Lin Peng-tu, a dryland crop specialist, is the leader and Chiu San-mei, a rice specialist, the deputy.
Working site is a 10-acre plot at the village of Kapore, some 500 miles from Zomba, by Lake Nyasaland. Local farmers will be shown Taiwan's irrigation pattern for two crops a year.
The team also will demonstrate rotation of rice with sweet potatoes, cotton, corn or other crops. Application of fertilizer and pest control have been taught.
In Ivory Coast, the Chinese farm team has increased personnel from 106 to 160. The team is now working in an area of 562 hectares. More than 40 farm technicians have been trained by the team.
A five-member water conservancy observation team from Taiwan reached Niger in January. Headed by Liu Fang-yeh, chief engineer of the Taiwan Water Conservancy Bureau, it will stay for two months.
A report from Fort Lamy, capital of Chad, said the Republic of China and that African country have signed a technical cooperation agreement. Signing were visiting Chinese Vice Minister of Foreign Affairs Yang Hsi-kun and President Francois Tombalbye.
The Republic of China will help Chad grow tobacco, soybeans, and jute. Scholar ships will be granted for training Chad farmers in Taiwan.
In addition, the Republic of China will build an oil extraction plant at Abeche, some 400 miles east of Fort Lamy, and a soap factory to make 150,000 tons a year. Chinese experts also will help in Fort Lamy city planning.
The sixth Taiwan seminar for African farm technicians was completed in January. Graduated were 43 young agriculturalists from 16 African countries.
The Republic of China in January sent 50 breeding hogs to Vietnam as a gift to help develop animal husbandry. The breeders were selected by the Joint Commission on Rural Reconstruction from among the best in Taiwan.
JCRR in January also sent two experts to Thailand to help organize farmers associations. They are Y. K. Yang and Spencer Shih, senior specialists of JCRR.
The Republic of China in January extended a technical cooperation agreement with the Dominican Republic for another year. The agreement, mainly for agricultural technical assistance, has been in force since November, 1963.
A Chinese fishing gear expert, Hu Lu-chi, went to New Zealand to act as fishery adviser. Hu specializes in manufacturing trawler gear.
The Taiwan Sugar Corporation sent engineers to Malaysia in January to help establish a large sugar refinery. The engineers will be responsible for construction and chemical processing.
A group of 42 doctors and nurses left for Libya in late January to join another 40 already there. The Chinese medical services to the North African country were begun in December, 1962.
Management Specialists
By the end of January, six American management experts dispatched by the International Executive Service Corps (IESC) had arrived in Taiwan to work in private enterprises. Some have completed their tours of voluntary service.
A technical cooperation agreement was signed last July between IESC and the Council for International Economic Cooperation and Development of the Republic of China. It stipulated that experts sent by IESC would receive no pay but that the beneficiaries would pay transportation costs.
IESC is a private non-profit foundation organized by American corporate executives in 1964 to help improve the performance of private enterprises in friendly countries. It is mainly interested in general management, production, marketing, and financial control.
The Republic of China was the first country in the Far East to enter into an agreement with IESC. Businessmen here are receptive to the kind of assistance offered.
The first team went to the Tatung Engineering Company, one of the largest electrical appliance manufacturers. Ray Clifton Ellis and J. Loren Fletcher have already completed their duties at Tatung. Ellis advised on top management procedures and methods, while Fletcher gave advice on production control and factory management.
On September 25, IESC sent Wallace W. Elton, vice president of J. Walter Thompson Company of New York, to Taiwan. From Sept. 29 through Oct. 22, consultation took place at the offices of six major Taipei advertising agencies on individual creative and management problems. This was followed by a two-week workshop on Creativity Advertising attended by more than 100 executives of enterprise and Communications media.
Edward M. Landway, who has had broad experience in general construction and project management, arrived in Taiwan Oct. 30 to advise on industrial district management.
The Pioneer Chemical Corporation, which produces coke and by-products, has had Reginald B. Chamberlin as its management adviser since Nov. 27. He will stay four months.
J. Harvey Redson, retired chairman of the Redson, Rice Corporation in Chicago, came to Taiwan Jan. 6 to help the China Color Printing Company. He has had extensive experience in high quality color printing.
In February came John Fowler, vice president of Dillon, Read Company of New York, who is working with the China Development Corporation, a private banking institution. His specialty is investment and development banking and security transactions.
IESC said more American experts will come to Taiwan to work with banks, paper mills, automobile plants, and trade associations. The American service organization has an office in Taipei. Its representative is Robert W. Belt.