CPC Corp, Taiwan's government-owned oil refiner, has cut back on ethylene production in the wake of typhoon Morakot, following a reduction in customer demand.

The company's ethylene plants, known as naphtha crackers, have been reduced to 75 percent of capacity, down from 95 percent before the storm, CPC vice-president Lin Maw-wen said by phone from Taipei yesterday. The refiner's plants and refineries were unharmed by typhoon Morakot, Lin said.

"We hope conditions will return to normal gradually," Lin said. "It may take two or three days."

Thirty-five of CPC's 650 gasoline stations are out of service because of flooding, Lin said. The company's two liquefied natural gas import terminals aren't affected, he said.

Formosa Plastics Corp, Taiwan's largest maker of polyvinyl chloride, or PVC, said production at its plants in Kaohsiung remains normal despite some flooding brought by the typhoon.

"There was some flooding, but operations have returned to normal now," spokesman Jerry Lin said by telephone from Taipei.

Kaohsiung, where CPC's naphtha crackers are located, is in southern Taiwan, which is among the areas worst-hit by the typhoon.

The crackers process naphtha into ethylene, a material for manufacturing plastics, chemicals and synthetic fabrics. CPC operates three ethylene plants with a combined annual output capacity of 1.08 million metric tons.

Bloomberg News

(HK Edition 08/11/2009 page2)