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Press Release for 2019 Annual General Shareholders’ Meeting
From:FENC

With its Roots in Taiwan, FENC is Pursuing Sustainable Growth 

for Further Expansion of Global Presence and Circular Economy 

 

Far Eastern New Century Corporation (Stock code: 1402, hereinafter referred to as “FENC” or “the Company”) held its 2019 Annual General Shareholders’ Meeting at the Taipei Hero House auditorium at 9:00 AM on 28 June with Chairman Douglas Tong Hsu presiding. During the meeting, the management team reported the 2018 financial results and the operating strategies of key businesses – production, investments, and property development.

FENC’s 2018 consolidated revenue reached NT$228.7 billion (US$ 7.6 billion), a 5% growth YoY, whilst net income attributable to shareholders of the Company was NT$12.03 billion (US$ 399 million), a 49% growth YoY, or an EPS of NT$2.41 (US¢7.99 ). The cash dividend of NT$1.8 (or US¢5.97 ) per share, a record high in the past seven years, was accepted during the meeting. The dividend yield is around 5.3% based on the stock closing price of June 27, 2019. FENC’s revenue growth accelerated in 1Q19, as its consolidated revenue reached NT$61.9 billion (US$ 2.0 billion), a 20% growth YoY, whilst net income attributable to shareholders of the company was NT$2.02 billion (US$ 66 million).

Production Business: Leveraging its Global Presence in Production and Sales & Leading the Circular Economy 

1. Innovation & Breakthrough —  Promoting the Upgraded and Transformed Industries of Taiwan

Established in Taiwan since 1949, FENC has, with its outstanding R&D capabilities, played a crucial role as a driver to promote the transformation and upgrading of Taiwan’s industry on the global stage during the country’s economic growth and industrial development in the past decades. In 2001, the Company started its R&D Center in Taiwan. Throughout past 20 years, FENC has cultivated many R&D talents, focusing on the four strategic areas, including polyester material, fiber & textile, new material, and biotech & energy. FENC has developed a number of world's first products and achieved remarkable research success.

With its deep roots of R&D center and headquarter in Taiwan, FENC has built up a comprehensive polyester supply chain ranging from upstream petrochemicals through midstream polyester to downstream textile businesses. By constantly introducing energy saving processes, smart management and manufacturing projects in its production sites, FENC will continually develop in Taiwan and lead the Taiwan industry to further transformation. 

2. Global Deployment—Growing Presence in the U.S., Vietnam and Japan

FENC built a network of production bases that spans from Asia to the Americas when its first production site in the United States was established in 2018. The successful acquisition of Mossi & Ghisolfi (M&G) in West Virginia adds 360,000 tons per year to its capacity of PET resin, and production commenced in the third quarter of 2018 to directly supply the massive American domestic market. In partnership with two other multinational corporations, the Company is constructing the world’s largest integrated PTA/PET plant in Corpus Christi, Texas, which not only enables FENC to overcome trade barriers, but also allows it to capitalize on America’s low-cost feedstocks and energy. Meanwhile in Vietnam, the construction of a vertically-integrated production site has been completed, including the currently operating PET production line with an annual capacity of 400,000 tons and the dyeing & finishing plant (Phase I). Another expansion of the polyester filament and staple fiber plants are underway. The Company is poised to reap the benefits of manufacturing in Vietnam, which derive from its membership in the ASEAN Free Trade Area (AFTA) and CPTPP and forthcoming entry into force of FTA with EU in 2019, an abundant supply of labor and, finally, rising demand brought about by a growing middle class in ASEAN countries. To accelerate the actualization of circular economy, FENC has decided to expand the second line on its existing recycling facility in Japan, and is also considering setting up another production site to satisfy the strong demand for recycled PET resin in the Japanese market.

3. Circular Economy—Ever-expanding Scope of Applications and Production Capacities

FENC is fully committed to promote environmental initiatives that focus on the circular usage, including producing “Bottle-to-Bottle” recycled polyester chips, “Bottle to Fiber” recycled polyester filaments, and “Bottle to Other Packaging” recycled packaging solutions. It is also building a green supply chain jointly with brand-name multinationals. A case in point is the collaborative development with Adidas of the “TopGreen Ocean” filament, which is made of recycled polyester fibers from ocean waste PET bottles and then used to make increasingly-popular footwear and apparel. In addition, the Company’s eco-friendly fabrics have been selected by Nike for players’ functional jerseys in four consecutive Football World Cups, and have become a top choice for sportswear in so many international athletic events that Taiwan is now also known to the rest of the world for making outstanding fabrics.        

The Company has the world’s second largest recycling capacity. Earlier this year, it acquired Phoenix Technologies International LLC, a U.S. PET recycler, and plans to further expand its capacity as the circular economy grows. It now has production sites in Taiwan, China, Japan and the United States, and will keep branching out across the world into the future to secure its leadership of the global market with unrivalled production capacities. 

Property Development: Revitalizes Land Use and Creates Prosperity in the Area 

The Company has up to 570,000 pings (1,884,306 m2) of land throughout Taiwan, mostly located in premium areas across the north of Taiwan. Currently, its prime project is the development of Tpark located in Banqiao District, New Taipei City with the construction of FET’s IDC building and second R&D building scheduled to be completed by the end of the year. Last year, the operations of Amazon Web Services were inaugurated in Tpark, and earlier this year, Google announced to develop a brand-new office complex in Tpark to incubate talent for the AI industry. As global enterprises’ R&D funding continues to flow in, Tpark is expected to host a great number of high-tech professionals, contribute to the neighboring area’s prosperity and employment growth, and also raise Taiwan’s profile in the world. The new residential housing product in Tpark with an estimated floor space totaling more than 7,000 pings (23,140 m2) is about to enter the sales stage and expected to deliver substantial profits for the Company. The Company has also applied to the Taoyuan City government for land rezoning of Neili Texturizing Plant to increase its asset value.   

Investment: Secures Substantial Profits with Diversified Investments  

FENC is the parent company of the Far Eastern Group, which has invested in numerous and diversified businesses. The majority of its investment portfolio is listed companies on the Taiwan Stock Exchange with proven track records, including Far EasTone Telecommunications Co. Ltd., Far Eastern Department Stores Limited, Asia Cement Corporation, Oriental Union Chemical Corporation, Everest Textile Corporation Limited, and Far Eastern International Bank. Such a diversified investment strategy spreads the risk of potential loss caused by economic volatility, and thus provides the Company consistent dividend income each year. The Company holds shares worth over NT$160 billion by market value, about 1.2 times their book values, with a potential net profit over NT$90 billion, which translates into a significant increase in net worth of NT$17.0 per share. 

Social Responsibilities: Operates Sustainably to Pay Back to Society

FENC is dedicated to fulfilling its corporate social responsibility. Chairman Douglas Tong Hsu was presented the award of Outstanding Corporate Sustainability Professionals by TCSA (Taiwan Corporate Sustainability Awards) in 2018. Thanks to the employees’ collective efforts, the Company was also honored by TCSA with the Most Prestigious Sustainability Awards-Top Ten Domestic Corporates for the first time, the CSR Report of the Year for the third consecutive year, and the Reporting Awards by GCSA (Global Corporate Sustainability Awards). Its commitment to CSR practices across its operations was also acknowledged by Global Views Monthly with the 15th Annual Corporate Social Responsibility Award in the Manufacturing Industry Category. Besides, in corporate governance evaluation, the Company ranks top 5% among listed companies. Moreover, it has been nominated as one of the World’s Best Employers for the second straight year by Forbes, the highest among the Taiwanese companies on the list, which qualifies it as a role model for corporate Taiwan.

FENC has achieved world-class operations and emerged as leader in the polyester industry with a forward-thinking mindset during the past seven decades since its inception, whilst still adhering to its overarching principles of sincerity, diligence, thrift, prudence and innovation. In future, it will stride ahead on the path of sustainable development by maintaining stable growth and accelerating transformation in this dynamic era of the new economy.

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