Bulletin: Formosa Plastics Group's Rising Cash Inflows Can Support Stable Debt

HONG KONG (S&P Global Ratings) July 12, 2023--Significant improvement in working capital inflows could help the four major companies of Formosa Plastics group sustain their aggregate debt level over the next 18 months. That's despite continuing volatility in regional operating conditions and input costs. Demand and supply conditions for the four companies look set to improve from the second half of 2023 and throughout 2024. The four key chemical and oil refining units of the group include Formosa Plastics Corp., Nan Ya Plastics Corp., Formosa Chemicals&Fibre Corp., and Formosa Petrochemical Corp., all rated 'BBB+/Stable/--'. Inventory restocking, rising exports from the region, and recovering consumption in China should support higher chemical prices and improving EBITDA generation later in the

...July 11, 2023 HONG KONG (S&P Global Ratings) July 12, 2023--Significant improvement in working capital inflows could help the four major companies of Formosa Plastics group sustain their aggregate debt level over the next 18 months. That's despite continuing volatility in regional operating conditions and input costs. Demand and supply conditions for the four companies look set to improve from the second half of 2023 and throughout 2024. The four key chemical and oil refining units of the group include Formosa Plastics Corp., Nan Ya Plastics Corp., Formosa Chemicals & Fibre Corp., and Formosa Petrochemical Corp., all rated '###+/Stable/--'. Inventory restocking, rising exports from the region, and recovering consumption in China should support higher chemical prices and improving EBITDA generation later in the period. The China government's package of economic stimulus and policy support for the property sector largely underpin improving demand conditions in this key regional market. We...

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