Formosa Plastics Corporation was founded in 1954. At
start-up in 1957, its plant produced 4 MT/day of polyvinyl
chloride (PVC) resin, the smallest PVC plant in the
world at that time.
With Such a small production volume, product costs were
comparatively high. Due to the lack of a local downstream
industrial base, sales remained stagnant, resulting
in the stockpiling of finished goods. To ameliorate
this situation, it was decided to increase production
volume in order to lower unit costs. PVC production
volume went up from 4 MT/day to 40 MT/day.
At the same time, plans were made to construct downstream
processing facilities to help consume the PVC resins.
Nan Ya Plastics Corporation was set up in 1958 to produce
secondary products such as PVC pipes, PVC film, and
plastic leather. Soon afterwards, the New Eastern Corporation
was formed to help consume Nan Ya's products by making
such tertiary products as handbags, luggage, shoes,
curtains, raincoats, and blow-molded toys, for the export
The strategy was enormously successful in solving the
problem of slow sales of PVC resins. With the following
expansions of Formosa Plastics Group and development
of new businesses by its ex-employees, an enormous tertiary
processing industry was created, with no rival in the
world. This led to the prosperous development of the
local petrochemical industry and contributed significantly
to the economic development of Taiwan.
The Formosa Plastics Group diversified into the textile
industry in 1965. It set up Formosa Chemicals and Fibre
Corporation (FCFC) to produce rayon staple fiber, yarn,
fabric, and garments, from the discarded wood left on
the mountains after lumbering. Nan Ya expanded in 1967,
setting up plants to produce polyester staple fiber.
The same year Formosa Plastics Corporation set up plants
to produce acrylic fiber. In 1974 FCFC added nylon filament
and fabric to its product lines. To offer better service
to downstream customers, large-scale dyeing and finishing
plants were set up to add to the value of the textile
products. The companies were the only ones in Taiwan
that produced four kinds of fibers and offered finishing
and dyeing services. The Formosa Plastics Group had
become one of the largest fiber producers in the world.
In view of the rapid development of the electronics
and information industries in Taiwan, Chairman Wang
saw a way to reduce dependence on imports of major components.
Although unfamiliar with the electronics industry, Nan
Ya selected and began investing in 1984 in the manufacturing
of printed circuit boards and copper-clad laminates.
The printed circuit board is one of the basic components
of the industry, with a long product life and few variations.
The key to success would lie in the control of manufacturing
processes and costs, which is the management expertise
of the Group. Once familiar with the business operations
of the industry, the Company would seek future expansions.
After more than 10 years of assiduous efforts, a successful
vertically integrated production of electronics raw
materials has been estabilshed. A further upstream diversification
included production of key components, such as thin-film
transistor liquid crystal displays (TFT-LCDs), dynamic
random access memory chips (DRAMs)
, and wafer. This move would contribute greatly to the
self-sufficiency of the nation's electronics and information
Taiwan's chronic shortage of upstream petrochemical
materials, at a self-sufficiency rate of merely 38%,
forced the middle and downstream manufacturing industries
to rely on more expensive imports and dampened their
competitiveness in the international markets. Formosa
Plastics proposed the No. 6 Naphtha Cracker Project
to alleviate the shortage problem. The government's
approval was obtained in 1986. In coordination with
this giant undertaking, Formosa Petrochemical Corporation
was founded in 1992 to take charge of the construction
of the oil refinery, naphtha cracking plant, and co-generation
plant. The first phase of the oil refinery as well as
the projects of the naphtha cracking plant and co-generation
plant have already been completed. This achievement,
and the continuous output from petrochemical related
factories of affiliated companies, has already realized
the value of vertical integration of the No. 6 Naphtha
Cracker Project and has advanced the operational abilities
of the group as a whole.
With over 40 years of development, the Formosa Plastics
Group is now the largest private enterprise in Taiwan.
The Group includes Formosa Chemicals &Fibre Corporation,
Formosa Petrochemical Corporation, and more than 20
other investments in Taiwan, the united States, China,
and Indonesia, in addition to several large educational
and medical organizations.