Formosa Petrochemical 2007Q1 Results Presentation

Formosa Petrochemical 2007Q1 Results Presentation

For the Three Months Ended in

March 31, 2007

2

Index

11 Our Company

Financials

Refinery Division

Olefins Division

Capital Expansion

22

33

44

55

3

Our Company: Leading Private Integrated Producer in Asia

FormosaPlastics29.4%

FormosaPlastics29.4%

Nan YaPlastics23.8%

Nan YaPlastics23.8%

Formosa Chemicals & Fibre

25.2%

Formosa Chemicals & Fibre

25.2%

Formosa Taffeta

4.0%

Formosa Taffeta

4.0%

Formosa PetrochemicalFormosa PetrochemicalFormosa PetrochemicalFormosa Petrochemical RefineryRefineryRefineryRefinery

OlefinsOlefinsOlefinsOlefins

UtilitiesUtilitiesUtilitiesUtilitiesFormosa Formosa Petrochemical Petrochemical TransportationTransportation

Formosa Formosa Petrochemical Petrochemical TransportationTransportation

Formosa OilFormosa Oil(Asia Pacific)(Asia Pacific)

Formosa OilFormosa Oil(Asia Pacific)(Asia Pacific)

100% 88%

Source: Company data.

PrincipalPrincipalShareholdersShareholders

Note 1: Shareholding percentage as of December 2006.Note 2: Taiwan Ratings on FPCC as of January 2005.

OUTLOOKOUTLOOK RATINGSRATINGS

Long term credit twAA-

Short term credit twA-1

Long term outlook Stable

Taiwan Ratings on FPCC

Taiwan Stock Exchange IPO on December 26, 2003. Founded by Formosa Plastics Group companies in 1992

One refinery, two naphtha cracker plants and three co-generation plants vertically integrated in No.6 Naphtha Cracker Complex site

As of Dec 2006, total refining capacity is 510,000 bpd, ethylene capacity is 1.735 million MTY and electricity generation is 2,720 MW


1

2

4

Co-GenCo-GenII-UPBII-UPB(600)(600)

Plant IIPlant II(900,000)

Our Company:Our Track Record

128.651.6

529.6443.3

347.4

169.4236.5

2000 2001 2002 2003 2004 2005 2006

Sales Revenue (NT$ billion)

Start-UpStart-UpStart-UpStart-Up Rapid GrowthRapid GrowthRapid GrowthRapid Growth Consolidating the LeadConsolidating the LeadConsolidating the LeadConsolidating the Lead

CDU ICDU I(150,000)(150,000)

CDU IICDU II(150,000)(150,000)

CDU IIICDU III(150,00)(150,00)

CDU IIICDU IIIDe-De-

bottleneckbottleneck(180,00)(180,00)

CDU ICDU IDe-De-


CDU IICDU IIDe-De-


Plant IPlant I(450,000)

Plant IPlant I De-De-

bottleneckbottleneck(700,000)

RefineryRefinery(bpd)(bpd)

RefineryRefinery(bpd)(bpd)

CrackerCracker(tpa)(tpa)

CrackerCracker(tpa)(tpa)

Co-GenCo-Gen(MW)(MW)

Co-GenCo-Gen(MW)(MW)

Co-Co-Gen Gen II

(300)(300)

Co-Gen Co-Gen IIIIII

(320)(320)

Co-GenCo-GenII-UPA II-UPA

(600)(600)

CFBCFB(300)(300)

Co-GenCo-GenII-UPCII-UPC(600)(600)


5

0

2

4

6

8

10

12

Refinery Olefins Utilities

04Q1 05Q1

06Q1 07Q1

Propylene10%

BTX2%

Ethylene12%

Fuel Oil3%

Jet Fuel/Kero8%

Naphtha5%

Electricity & Steam5%

Other Products11%

Gasoline19%

Gasoil25%

Financials

Sales Revenue by DivisionSales Revenue by DivisionSales Revenue by DivisionSales Revenue by Division Operating Profit by DivisionOperating Profit by DivisionOperating Profit by DivisionOperating Profit by Division

Historical Operating Profit by DivisionHistorical Operating Profit by DivisionHistorical Operating Profit by DivisionHistorical Operating Profit by DivisionSales Revenue by ProductsSales Revenue by ProductsSales Revenue by ProductsSales Revenue by Products

Note 1: “Other Products” includes Butadiene, LPG, MTBE, Asphalt, Sulfur and etc.


1 1

1

(NT$ billion)

Unit: NT$ billion 06Q1 (%) 07Q1 (%) Change Growth

Refinery 81.0 74% 104.2 78% 23.1 29%

Olefins 32.8 30% 35.6 27% 2.8 8%

Utilities 6.1 6% 8.2 6% 2.1 34%

Others -10.5 -10% -14.7 -11% -4.2 40%

TOTAL 109.5 100% 133.3 100% 24 22%

Unit: NT$ billion 06Q1 (%) 07Q1 (%) Change Growth

Refinery 2.68 39% 10.67 66% 8.0 298%

Olefins 3.76 54% 4.20 26% 0.4 12%

Utilities 0.35 5% 1.12 7% 0.8 223%

Others 0.14 2% 0.10 1% 0.0 -31%

TOTAL 6.93 100% 16.08 100% 9.2 132%

1

6

FinancialsSource: Company data.

Category Units 2006Q1 2007Q1 Differential

Total Assets NT$ billion 405,822 441,886 8.9%

Shareholders’ Equity NT$ billion 217,389 233,069 7.2%

Basic EPS NT$/share 0.5 1.34 0.84

Expense/Revenue % 2.11 1.96 (0.15)

Interest Coverage % 12.03 20.13 8.1

Debt Gearing % 87 90 3

7

-20

-18

-16

-14

-12

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

14

16

18

20

22

24

J-06 F-06 M-06 A-06 M-06 J-06 J-06 A-06 S-06 O-06 N-06 D-06 J-07 F-07 M-07 A-07

Gasoline GasoilNaphtha-MOPJ

Jet Fuel/KeroMF180

Refining Division: Macro Environment

Crude Price IndexCrude Price IndexCrude Price IndexCrude Price Index Dubai Crude/Oil Product DifferentialsDubai Crude/Oil Product DifferentialsDubai Crude/Oil Product DifferentialsDubai Crude/Oil Product Differentials

Singapore Refining MarginSingapore Refining MarginSingapore Refining MarginSingapore Refining Margin

Source: Reuters, industry sources.

(US$/bbl)(US$/bbl)

(US$/bbl)

05

1015202530354045505560657075


NYMEX

IPE Brent

Dubai 1Mo

(4)

(2)

0

2

4

6

8

10

12

14

16


FPCC Export Raw Material Margin Singapore Simple Margin Singapore Complex Margin

8

Refining Division: Operations

CDU (180kbpd): March ~ April

CDU (150kbpd): revamped 120%

RDS (70kbpd): revamped 117~130%

RCC (73kbpd): revamped 110%

88%

98%

77%

96%

78%

05

101520253035404550556065707580859095

100105110115120125

1Q'06 2Q'06 3Q'06 4Q'06 1Q'07

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Refinery Sales Rev Utilization Rate

Refinery Sales and Utilization RateRefinery Sales and Utilization RateRefinery Sales and Utilization RateRefinery Sales and Utilization Rate 2006 Upgraded Facilities2006 Upgraded Facilities2006 Upgraded Facilities2006 Upgraded Facilities

2007 Schedule Maintenance2007 Schedule Maintenance2007 Schedule Maintenance2007 Schedule Maintenance

(NT$ million)


9

Refining Division:Product Market

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

1Q06 1Q07 1Q06 1Q07

Export

Domestic

44%44%

Gasoline Gasoil

56%56%

50%50%

50%50%

14%14%

86%86%

14%14%

86%86%

Gasoline and Gasoil CracksGasoline and Gasoil CracksGasoline and Gasoil CracksGasoline and Gasoil Cracks

FPCC Gasoil Production Yield RateFPCC Gasoil Production Yield RateFPCC Gasoil Production Yield RateFPCC Gasoil Production Yield Rate

0 500 1,000 1,500 2,000 2,500

1Q06

1Q07

50ppm 500ppm 5000ppm


(‘000 KL)

Domestic vs. Export Sales VolumeDomestic vs. Export Sales VolumeDomestic vs. Export Sales VolumeDomestic vs. Export Sales Volume

0

5

10

15

20

25


Ron92 0.5%Gasoil

0.05%Gasoil

(‘000 KL)

(US$/bbl)

10

Olefins Division:Macro Environment

Global Ethylene Utilization EstimatesGlobal Ethylene Utilization EstimatesGlobal Ethylene Utilization EstimatesGlobal Ethylene Utilization Estimates Naphtha vs. Ethylene SpreadNaphtha vs. Ethylene SpreadNaphtha vs. Ethylene SpreadNaphtha vs. Ethylene Spread

Source: CMAI, Reuters, industry sources,.

(US$/MT)

0

200

400

600

800

1000

1200

1400

1600

1800

J-06

F-06

M-06

A-06

M-06

J-06

J-06

A-06

S-06

O-06

N-06

D-06

J-07

F-07

M-07

A-07

Naphtha-MOPJ

Ethylene CFR TW

11

0

200

400

600

800

1000

1200

1400

1600

1800

J-06

F-06

M-06

A-06

M-06

J-06

J-06

A-06

S-06

O-06

N-06

D-06

J-07

F-07

M-07

A-07

HDPE (inject)

EG

PP

ABS

Olefins Division: Macro Environment

Downstream SpreadsDownstream SpreadsDownstream SpreadsDownstream Spreads Regional Petrochemical PricesRegional Petrochemical PricesRegional Petrochemical PricesRegional Petrochemical Prices

Source:, Reuters, industry sources,.

(US$/MT)(US$/MT)

0

200

400

600

800

1000

1200

1400

1600

1800

J-06

F-06

M-06

A-06

M-06

J-06

J-06

A-06

S-06

O-06

N-06

D-06

J-07

F-07

M-07

A-07

Ethylene (WCP)

Propylene

Butadiene

12

Olefins Division:Plant Operation

OL#2 (1.035m tpa): undeclared

OL#1 (700ktpa): Sep ~ Oct

Quarterly Sales and Utilization Rate Quarterly Sales and Utilization Rate Quarterly Sales and Utilization Rate Quarterly Sales and Utilization Rate 2006 Schedule Maintenance2006 Schedule Maintenance2006 Schedule Maintenance2006 Schedule Maintenance

2007 Schedule Maintenance2007 Schedule Maintenance2007 Schedule Maintenance2007 Schedule Maintenance

116%

99%

108%115%117%

0

5

10

15

20

25

30

35

40

1Q'06 2Q'06 3Q'06 4Q'06 1Q07

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

120%

Olefins Sales Rev Utilization Rate


(NT$ million)

13

Change Change in FPCC in FPCC Refinery Refinery Capacity Capacity and Yield and Yield

RateRate

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

450kbpd

510kbpd

520kbpd

540kbpd

LPG Naphtha JetFuel Gasoline Gasoil Fuel Oil Propylene Others

Expansion Plan:Refinery

FPCC FPCC Refinery Refinery Expan-Expan-

sionsion

ProjectProject Major ProductsMajor Products Current Current Capacity (bpd)Capacity (bpd)

Expansion Expansion (bpd)(bpd)

Aggregated Aggregated Capacity (bpd)Capacity (bpd)

Completion Completion DateDate

Base-oil Plant Baseoil,

Whiteoil

New 10,000 10,000 2008Q2

OCT Propylene 830 KTY 250 KTY 1,080 KTY 2007Q2

Capacity Revamping

Gasoil,

Naphtha

450,000 90,000 540,000 2008Q2

1

Note 1: Schedule subject to change without prior notice.


(bpd)

1

CDU capacity

14

Expansion Plan:Olefins

FPCC FPCC Olefins Olefins Expan-Expan-

sionsion

ProjectProject Major Major ProductsProducts

Current Current Capacity Capacity (KTY)(KTY)

Expansion Expansion (KTY)(KTY)

Aggregated Aggregated Capacity Capacity (KTY)(KTY)


Olefins No.3 Ethylene 1,735 1,200 2,935 2007Q2

Propylene Propylene from Olefins No.3

867.5 600 1,467.5 2007Q2

Formosa Formosa Group Group Down-Down-stream stream Expan-Expan-

sionsion

CompanyCompany ProjectProject Major Major ProductsProducts

Current Current CapacityCapacity

Expansion Expansion (KTY)(KTY)

Raw Raw Material Material (KTY)(KTY)


FPC AE#2 AE 108 KTY 160 Propylene 120

2008Q1

Butanol Butanol New 250 Propylene 158

2007Q4

PP (Ningbo)

PP New 450 Propylene 468

2007Q3

AE (Ningbo)

AE New 160 Propylene 112

2006Q1

NYP EG#4 EG 1,044 KTY 720 Ethylene 432

2007Q2

PO PO New 100 Propylene 80

2009

1.4BG#2 BG 40 KTY 80 Butadiene 80

2007Q2

FCFC SM#3 SM 600 KTY 720 Ethylene 207

2006Q4

1

Note 1: Schedule subject to change without prior notice.


1

15

Disclaimer

This document has been prepared by Formosa Petrochemical Corporation (“FPCC” or the “Company”) solely for meetings with potential investors

The information contained in this document has not been independently verified. No representation or warranty express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. None of the Company nor any of its respective affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document

This document does not constitute an offer or invitation to purchase or subscribe for any securities in the Company and neither any part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Any decision to purchase securities in the offering should be made solely on the basis of the information contained in the Offering Circular

included in this document contain forward-looking statements and information relating to the Company. The Company has generally identified forward-looking statements by the use of terms such as “may”, “might”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe” or similar words or phrases. The Company bases these statements and financial information on its beliefs as well as its assumptions made using information currently available to it. Because these statements and financial information reflect the Company’s current views concerning future events, these statements and financial information necessarily involve risks, uncertainties and assumptions. Actual future performance could differ materially from these forward-looking statements and financial information. The Company does not undertake to release the results of any revisions of forward-looking statements and financial information to reflect future events or circumstances. The Company cautions investors not to place undue reliance on these forward-looking statements. All written and oral forward-looking statements attributable to the Company or persons acting on the Company’s behalf are qualified in their entirety by these cautionary statements

No part of this document may be distributed, reproduced or transmitted to any third party

Formosa Petrochemical 2007Q1 Results Presentation

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