JEC COMPOSITES MAGAZINE - Issue #39 - March/April 2008 - 29

BUSINESS Market survey: Taiwan capacity reached 3,449 MW in 2007, i.e. a 156% growth over China’s existing installed capacity in 2006 (2,604 MW). China’s total installed capacity thus reached 6,050 MW in 2007. The wind energy sector is growing much faster in China than anywhere else in the world. And this growth is set to last: the capacity should hit 10,000 MW by 2010, and 50,000 MW by 2015. This trend has attracted much attention worldwide. In 2007, many leading manufacturers and system integrators set up business and invested in China. The strong growth of the Chinese wind energy market is due to the strong power demand from the industry, in addition to support from the Chinese government. Thanks to this political support, there are more than 40 domestic companies involved in blade manufacturing in China, and there should be more in the future. Another important event will influence the carbon fibre market in Asia: the Olympics, g…/… Formosa Plastics Corp. invests massively in carbon USA). This trend explains the growing demand for carbon fibre in Asia. Automotive applications might well be the next step for carbon fibre. Faster processing technologies are developing. Once this technology is fully developed, carbon fibre will not only be broadly used in luxury cars but also in common cars. JCM: What is your development strategy for FPC? F.P.C: To adapt to the rapidly growing industrial applications, FPC’s strategy consists in expanding both capacity and variety. An additional capacity of 2,200 MT will be developed in 2008 and another 2,600 MT in 2009, which will enable FPC to meet customer demand. The rapid growth of the wind energy industry (especially in Asia) tells us to focus on the development of 24K carbon fibre, which is an excellent product for industrial applications. which will be held in Beijing in 2008. The Asian composite industry will surely benefit from economic spin-offs generated by the Olympic Games. We believe that the games will enhance the demand for composites, including in the sport goods industry. In fact, Asian manufacturers have expanded their locations to “welcome” this new trend in Asia. JCM: Which sectors are to be explored in particular? F P.C: The Asian market has experienced . very attractive growth in the wind energy industry. In 2007, the installed capacity in Asia grew at a faster pace than in the USA. According to the 2007 figures from the Global Wind Energy Council, the installed capacity grew by 8,554 MW in Europe, 5,630 MW in North America (5,244 MW in the USA), and 5,436 MW in Asia. The Asian wind energy capacity reached 16,091 MW, while the North American capacity totalled 18,664 MW (16,818 MW in the Group’s development is the creation from scratch of the Mailiao site. This site, on the western side of the island, is also known by the name: “No. 6 Naphtha Cracking Project.” It is the fruit of a colossal project run in the 1990s, which required the investment of US$17.5 billion and which accommodates on its 2,255 hectares over 60 various production sites. Continuing investment It was in 1984, under licence from Hitco, that Formosa Plastics Corp. began producing carbon fibre on its Kaohsiung site, in southern Taiwan. In 1986, production levels stood at 100 tons. The following year, the company decided to develop its own PAN precursor. Production subsequently climbed from 100 tons in 1991 to over 700 tons in 1998. In 2002, production was transferred from Kaohsiung to Mailiao. The carbon fibre production capacity then went up, with the new plant, to 1,350 tons. The company had plenty of room still to expand and therefore continued to invest. In 2007, the Group was boosted by 1,100 tons of additional production capacity, with further increases in the pipeline: 2,200 tons in 2008; 2,600 for the start of 2009. This will take the total production capacity from 3,950 tons in 2007 to 6,150 tons in 2008 and 8,750 tons in 2009. The company is not for the moment disclosing details of its investments beyond 2009. Aside from carbon fibre, the Group also produces 5 other types of fibre: polyester, acrylic, nylon, rayon and spandex. Most of the sales of Formosa Plastics Corp. are generated in the Asia zone, and in China in particular. As it strives to capture 14% of the market by 2009, there can be no doubt that the Group will be looking to extend its sphere of influence in order to achieve its objectives. More information: www.fpg.com.tw today No39 March - April 2008 / JEC Composites Magazine

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JEC COMPOSITES MAGAZINE - Issue #39 - March/April 2008

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