FORMOSA INDUSTRIES CORPORATION (CÔNG TY TNHH HƯNG NGHIỆP FORMOSA) is a foreign direct investment (FDI) company, registered under tax code 3600517557. Established in 2001, it is based in Nhon Trach III Industrial Park, Dong Nai Province, Vietnam. The company specializes in the manufacturing of synthetic fibers, plastic products, and polyester materials. Additionally, it operates a thermal power plant and leases industrial infrastructure.

The company is a subsidiary of the Taiwan-based Formosa Chemicals & Fibre Corporation, with major stakeholders including Nan Ya Plastics Corporation and Formosa Taffeta Co., Ltd. These connections place it under the larger umbrella of the Formosa Plastics Group, one of the most powerful industrial conglomerates in Asia.

Financial Performance: A Troubling Decline

In 2023, FORMOSA INDUSTRIES CORPORATION experienced a 38.67% decline in revenue, raising concerns about its market position and operational sustainability. The company also reported a massive loss of $88.53 million, marking the second consecutive year of heavy financial downturns.

Key Financial Issues

• Total assets declined by 8.47%, signaling potential disinvestment or operational inefficiencies.
• Owner's equity dropped by 20.39%, reflecting ongoing financial struggles.
• Net profit has fallen drastically, following a 282.44% profit drop in 2022.
• Working capital remains low, indicating possible liquidity challenges.

For investors or businesses considering trade or partnership opportunities with FORMOSA INDUSTRIES CORPORATION, a full risk assessment, including liquidity analysis, is essential. VANGUARD BUSINESS INFORMATION LLC (VBI) provides comprehensive financial reports with deeper insights.

Environmental Controversies: The 2016 Coastal Disaster

While FORMOSA INDUSTRIES CORPORATION primarily focuses on textiles and synthetic fibers, it is closely associated with the larger Formosa Group, which was responsible for one of the worst environmental disasters in Vietnam's history—the 2016 Central Vietnam Marine Disaster.

The Disaster and Its Impact

• In April 2016, toxic wastewater from Formosa Ha Tinh Steel Corporation, another subsidiary of Formosa Plastics Group, contaminated over 200 km of coastline across Ha Tinh, Quang Binh, Quang Tri, and Thua Thien Hue provinces.
• Mass fish deaths, economic devastation, and public health concerns emerged, affecting thousands of fishermen, seafood businesses, and coastal communities.
• Formosa admitted responsibility and paid a $500 million compensation package, but the long-term ecological damage remains severe.

Though FORMOSA INDUSTRIES CORPORATION was not directly linked to the toxic spill, its parent companies' history of environmental neglect raises red flags about its own operational standards in Vietnam. The company's thermal power plant, plastic production, and textile dyeing operations all pose potential environmental risks, particularly concerning waste management and emissions.

For businesses considering long-term engagements with FORMOSA INDUSTRIES CORPORATION, a detailed compliance and environmental impact report is advisable. VBI’s credit and risk assessment reports provide a full evaluation of potential liabilities.

Business Operations and Market Challenges

Despite being in Vietnam for over two decades, FORMOSA INDUSTRIES CORPORATION faces several operational challenges:

• Declining Market Competitiveness: The sharp drop in revenue suggests weakened demand or increased competition in Vietnam’s textile and synthetic fiber sectors.
• Large-Scale Financial Losses: With back-to-back losses exceeding $88 million, concerns about financial sustainability continue to grow.
• Environmental Scrutiny: The Formosa name is permanently tied to environmental controversies, making regulatory compliance and public trust ongoing challenges.

Leadership and Ownership Structure

The company is led by General Director Hong Fu Yuan and Deputy General Director Huang Chien Fu, both of Taiwanese nationality. It is majority-owned by Taiwanese conglomerates, with significant shares held by:

• Formosa Chemicals & Fibre Corporation (42.5%)
• Nan Ya Plastics Corporation (42.5%)
• Formosa Taffeta Co., Ltd (10%)
• King Car Food Industrial Co., Ltd (5%)

This centralized foreign ownership structure means strategic decisions are made outside of Vietnam, which may limit local responsiveness to regulatory and environmental issues.

For a detailed breakdown of ownership control, governance policies, and financial liabilities, purchasing VBI’s credit report on FORMOSA INDUSTRIES CORPORATION is recommended.

Future Outlook and Risks

• Financial Uncertainty: Given continuous losses, the company must either restructure operations or secure additional funding to remain viable.
• Reputation Damage: The Formosa name remains controversial in Vietnam, making brand recovery a long-term challenge.
• Regulatory Pressures: Vietnam’s tightening environmental laws may require the company to invest in cleaner production technologies or face penalties.

For businesses and investors considering transactions with FORMOSA INDUSTRIES CORPORATION, a detailed risk assessment and financial due diligence process is strongly advised. VBI’s credit and compliance reports provide essential insights into operational and financial risks.