Formosa Plastics Group is planning a U.S.-based initial populace put up that would combine PVC/polyolefins maker Formosa Plastics Corp. USA with plastic organ pipe producer J-M Manufacturing Co. Inc. and PET resin manufacturer Nan Ya Plastics Corp. The IPO would help Formosa, a conglomerate based in Taipei, Taiwan, recruit fund for a major growth project in China, according to a May 24 Bloomberg News fib. The first public citation of the IPO came when Formosa Plastics President C.T. Lee spoke with reporters May 24 after the firm ‘s annual shareholders converge in Taipei. Lee told reporters at the time that there are “ a lot of opportunities ” in U.S. capital markets that Formosa has n’t been using, and that the U.S. units will be combined “ because the U.S. market likes large-scale companies. ” Rob Thibault, Formosa ‘s U.S.-based spokesman, said the IPO could take place in 2006 and will combine four legal entities : Formosa Plastics Corp. USA, Formosa Plastics Corp. America, Nan Ya Plastics Corp. USA and Nan Ya Plastics Corp. America.

Livingston, N.J.-based Formosa Plastics Corp. USA is one of North America ‘s largest polyvinyl chloride makers and is a goodly producer of polyethylene and polypropylene. J-M was No. 3 in a recent Plastics News rate of north american english pipe, profile and tube makers, with annual sales estimated at $ 625 million. Nan Ya has a smaller bearing in PET, but still holds about 5 percentage of north american english capacity. Formosa Plastics Corp. USA employs more than 2,300 and posted sales of more than $ 2.5 billion last year. No employee or sales totals were available for Nan Ya. A Formosa IPO would be the fourth plastics-related IPO in the past year, joining offerings from Westlake Chemical Corp., Celanese AG and Huntsman Corp. Results from those efforts have been mix. Of the three, Westlake has been the most successful. Its stock debuted at around $ 15 per share in August and passed $ 36 in March before coming down to a late $ 25 – a 67 percentage bump-up in nine months as a public company.

industry sources said there are some intrigue parallels between Westlake and Formosa, since both make polyvinyl chloride and polyethylene and operate a pipe unit. In Westlake ‘s case, the pipe business is north American Pipe Corp. of Houston, which was seventh in the Plastics News rank, with estimated sales of $ 345 million. Both firms have taiwanese ownership, with Westlake controlled by Chao Group. While it appears Westlake timed the market right, Celanese and Huntsman have not been as lucky. Celanese opened at $ 16 in late January, passed $ 18 in March, but since has dropped back to its original price. Huntsman debuted at around $ 25 in early February and passed $ 28 late that calendar month, but has slipped to a late $ 19. For plastics and chemical firms, finding achiever in the current IPO market “ is n’t a surely thing, ” said Jeff Dancer, president of Allan F. Dow Group, a individual equity firm in Houston.

“ A set of people think that because there ‘s so much private capital that ‘s bountiful and cheap right now, that it ‘s a good time to put themselves up [ for an IPO ] and see what people will pay, ” said Dancer, who spent 25 years in the PE commercial enterprise with Phillips Petroleum Corp. “ But in our opinion, polyolefin prices have peaked, so it may be meter to cash out of these markets. ” Dancer added that, because of increased regulative and fiscal coverage requirements, being a public company “ is n’t that much fun anymore. ” “ public companies have to do a draw more now [ in reporting ] than they used to, ” he said. “ But when you get down to it, going public is all about time. That ‘s where the hazard is. ”

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