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The Taiwanese conglomerate’s unit in Vietnam, which is building an integrated steel mill in the country’s central province of Ha Tinh, suffered heavy losses from violent protests aimed at foreign-owned factories.
Formosa Ha Tinh Steel Corp, which protesters mistook for a Chinese-owned company, came under attack. The violence was sparked by Beijing's deployment of an oil rig in disputed waters of the South China Sea.
Vietnam is among several countries involved in territorial disputes in the South China Sea.
The Vietnamese government will pay $1.44 million of the total sum to Formosa this week. The remaining $948,000 will be paid out in instalments by a Vietnamese insurance firm, Reuters reported on Monday July 21, citing a spokesman for the Formosa unit.
A company official declined to comment on the matter.
Formosa Plastics Group, one of Vietnam’s major foreign investors, had previously estimated property losses of about $3 million.
In the aftermath of the unrest, the conglomerate submitted a series of special requests to the Vietnamese government. Among them was one for a special economic zone to be set up, which the government rejected, according to Vietnamese media reports.
The first phase of Formosa’s mill is expected to be put into operation sometime in the third quarter of 2015, with 3.5 million tpy of initial crude steel capacity.
Taiwan’s Formosa Plastics Group has been granted a compensation of $2.39 million by the Vietnamese government and an insurance firm for losses incurred during anti-China protests in May, according to a Reuters report.