CPC Corp., Taiwan to get government to agree to reduce fuel subsidy

S.C. Lin, the new chairman of CPC Corp., Taiwan, said that the company plans to reduce costs by NT$16.8 billion (US$561.0 million), as well as increase operating income by NT$44.2 billion (US$1.4 billion), to boost its net income by NT$61 billion (US$2.0 billion) in five years. As a state-owned enterprise, CPC is highly influenced by government policy, which resulted in some operational problems, he said. Due to the increase in crude oil prices and fuel price subsidies, CPC incurred a loss of NT$38.7 billion (US$1.3 billion) before income tax in 2011, 260% higher than its loss a year ago. “To prevent losses from growing further, creating financial difficulties and rising capital costs that would affect the company’s credit rating and its operations, in addition to striving rigorously to increase income, reduce expenditures, and enhance operating performance, CPC will seek permission from the higher authorities to reduce gradually the amount of petroleum and diesel fuel costs that it absorbs so that our operations can move in the direction of normality,” Lin said in the company’s website. If CPC is to become a leading international enterprise, it has to be privatized, he said, since privatization would provide management with flexibility in making decisions.