In view of strong international competition, the Government is formulating new policies to improve the value-additions of Taiwan's petrochemical industry.
According to Taiwan's Ministry of Economic Affairs (MOEA), indulging in Research and Development (R&D) for creation of value-added items is the most appropriate way, for this sector loaded with opportunities, to advance.
The MOEA started formulating alternative development policies for the country's petrochemical industry, just after the Government on April 22 announced its decision to withdraw the support that it had extended to the Kuokuang petrochemical project.
The enormous oil refinery complex had instigated a hot debate involving environmentalists, local residents and big business enterprises.
The MOEA expects the domestic firms to boost the value propositions of their goods to above 30 percent and is offering financial assistance to help this materialize. The MOEA has included the value-addition ratios and R&D expenses to its list of selection criteria while reviewing the investment proposals of the firms.
It is proposed that after relocation of the fifth naphtha cracker plant in 2015, Taiwan's state-owned oil company, CPC Corporation, would set up an R&D Centre for new petrochemical materials on the vacant site. Moreover, the Corporation would also set up a green technology research institute in the port city of Kaohsiung in southern Taiwan at a cost of NT$5billion or US$ 172.38 million.
As these plans start taking shape, it would see the petrochemical sector raising its collective R&D expense ratio to 2 percent by 2020 from 0.32 percent in 2009. It, thus, foresees the sector's overall value-addition ratio going up from current 14.6 percent to 20 percent by 2020.
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