Four Years of Losses Totaling $240 Million! Taiwan's Veteran Manufacturer Announces October Shutdown of Kaohsiung Plant, 97% of Revenue Impacted, Stock Plummets

The petrochemical industry continues to face a prolonged downturn, and veteran manufacturer Taipower Benzene (1310) is at a critical juncture. Burdened by global supply-demand imbalances and aggressive low-price competition, the company has suffered operating losses for four consecutive years, accumulating a deficit of NT$2.438 billion. To prevent further erosion of cash flow, the company announced at a major press briefing on the 24th that its Kaohsiung Lin Yuan styrene plant—accounting for 97% of total revenue—will cease production operations starting October 1, signaling a decisive move to stop losses and restructure.

Why Shut Down the Core Business That Generates 97% of Revenue?

The global petrochemical environment remains weak, with persistently sluggish end-user demand and severe overcapacity among competitors. This has driven prices of products like styrene downward, while raw material and production costs remain high. Taipower Benzene's CEO, Chung Chong-kuo, admitted at the press conference that the industry has faced extremely difficult conditions over the past five years. After carefully assessing market trends and current order levels, the company sees no near-term recovery in sight.

Chung pointed out that with gross margins remaining negative for an extended period, continuing operations would only deepen cash outflows and expand losses. The company's Q1 2023 net loss per share reached NT$0.94, already 68.6% of its full-year 2023 loss of NT$1.37 per share. With the Lin Yuan plant's designed annual capacity at 350,000 tons, the shutdown is expected to reduce output by approximately 3,000 tons. The company has decided to halt production to cut operating costs and cash outlays, preserving capital for future business transformation and long-term operations.

Did Bargain Hunters Step In? Stock Plunges to Daily Limit at NT$8.97

Since the Lin Yuan plant is Taipower Benzene's primary revenue source, the shutdown implies a collapse in monthly revenue, severely shaking market confidence. On the 27th, the stock opened sharply lower, immediately hitting the daily limit at NT$8.97, with over 6,000 sell orders queued.

However, as the stock price had already fallen well below the Q1 2023 book value of NT$13.91 per share, early bargain-hunting capital entered the market, briefly pushing the price up to NT$9.01. Unfortunately, buying momentum faded, and the stock was quickly driven back to the daily limit. To meet restructuring and funding needs, Taipower Benzene has already pledged land and buildings as collateral, with land valued at approximately NT$810 million and buildings at NT$230 million—totaling about 13.5% of total assets.

What About Employees? Company Promises Lawful and Proper Placement

With the 350,000-ton-per-year Lin Yuan plant entering a shutdown countdown, the welfare of numerous technical staff and frontline workers has become a public concern. In response, Taipower Benzene's management emphasized its corporate responsibility, stating it will not arbitrarily lay off employees.

CEO Chung stressed that before the official shutdown on October 1, the company will fully communicate with employees in accordance with the Labor Standards Act and related labor regulations, conducting negotiations on placement and optimization measures. The company pledged to complete all procedures legally and in compliance, ensuring the legitimate rights and interests of every affected employee are fully protected.