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| The Operating Revenue Comparison |
( UNIT : US$ Billion) |
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| Nan Ya Plastics Corporation |
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The sales revenue of the company in 2008 was US$6.44 billion, a decrease of 8.7% from US$7.05 billion in 2007. The profit before tax in 2008 was US$0.292 billion, a substantial decrease by 86.1% from US$2.1 billion in the previous year.
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In the first half of 2008, the global emerging countries economy was persistently growing and was in robust demand of energy resources, which brought about the soared international crude oil price and drove also the cost increase for the interrelated upstream petrochemical feedstocks. Thanks to such an advantage gained and the handsome profit made for the petrochemical products of the company, the profit earned in the first half of 2008 could still continue maintaining a stable growth which was the same did by the company in the second half of 2007.
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Till the second half of 2008, the 「subprime mortgage storm」 was set off, the Bear Stearns Company – the 5th largest investment bank in the States – was closed down, and Lehman Brothers Holding was declared bankruptcy. Under the sweep of global financial tsunami, the majority of the advanced industrial countries ran into a economic decline and encountered a great many unfavorable factors covering the collapsed stock market, the
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| The Operating Revenue Comparison |
( UNIT : US$100 Million ) |
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sluggish investment, the weak non-government consumption, the hiked unemployment rate, and the shrunk people wealth and so forth which caused an impact on global economic environment. Thus the downstream customers treated the future business climate by taking 「conservativeness, wait-and-see」attitude, with the result that the market demand took place a sudden shrinkage starting from last August, and the sales performance in 2008 appeared going downturn as compared with the same that the company did in 2007. |
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EG-4 Plant |
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The product line of the company comes under 4 major categories; they are plastics product, plastics raw material, electronic materials, and polyester fiber product. |
In the area of plastics product, as many tertiary processing industries have been already relocated their production plants to mainland China, they lessened their demand for secondary processing raw materials at home, in addition, the company was difficult to pass the increased cost, primarily driven by the soared international crude oil price, for upstream petrochemicals procured onto its customers, which increased the weight of cost burden and affected decreasing the profit |
for the company. In response to the external unfavorable environment, the parent company in Taiwan not only moved partial products, enjoying a lower cost advantage than that of products made in Taiwan, to be manufactured in its subsidiaries in mainland China in order to supply the local customers. And the parent company in Taiwan had to positively transform; renewedly plan the product orientation; accelerately propel eliminating the impure product but retaining the pure product; promote product with feature and product in conformity with environmental protection current and high valve-added; timely adjust the sort of products manufactured in Taiwan, mainland China and USA enabling to differentiate the categories and markets; set up the optimum combination of production and marketing so as to acquire the greatest earnings. |
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BPA Plant |
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With respect to plastics raw materials (petrochemicals), in consideration of the demand source for upstream raw materials and to keep in line with the development of No. 6 petrochemical complex, the company aggressively transformed in recent year stepping into the production of petrochemical products consisting of EG, BPA, 1,4BG, TDI, 2EH, 1NA, DOP, Epoxy and so forth. A complete vertical supply chain was formed and the de-bottleneck of production process was persistently improved, which enabled to raise the capacity and to reduce the energy consumption, the carbon emission, and the production cost. It is foreseeable that mainland China and ASEAN (Association of Southeast Asia Nations) as the emerging economic entity arisen are situated in Asia region and heavily rely on their demand for petrochemical products to be supplied from the said region. As the petrochemical complex in Mai-liao is nicely located having the geographical environment advantage, it will gain an utmost advantageous competition condition no matter in production scale, shortening delivery, and cost saving. |
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In the field of polyester product, as the cost increase for the primary raw materials this year, the industry suffered difficulty in passing the increase onto customer and needed to reduce the production capacity one after another to respond due to high inventory driven by the fact that the demand by the customer was on the rapid decline. Fortunately the polyester product manufactured by the company had a very stable quality and a great many high value-added product which was long developed with the world-wide leading brand owners, with the result that the corporate sales showed the relatively stable and the profit earned could be kept up.
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EPOXY Plant |
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The company made an investment and established a polyester fiber plant in South Carolina of USA, with annual capacity of 860,000 tons and sales revenue of US$890 million in 2008. It primarily produces polyester staple fiber and PET chip for bottle grade use. In recent years, owing to the adverse factors suffered in relation to the price of raw material went up and the striving for order with low price offered by the competitors in mainland China and south Asia counties, besides the plant in South Carolina had to positively transform marketing stuffing fiber and floor carpet fiber products with high value-added, it had to sign sales contract with the international well-known players to supply bottle grade PET chip, which enabled the company to yet maintain the stable profit.
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The company and Formosa Chemicals and Fibre Corporation had a joint venture investment in establishing polyester fiber plant in Dongnai Province of Vietnam. Besides its sales was being overall promoted in domestics, European and Asian markets, the another polyester plant set up in Kunshan Mainland China had joined in operation ranks in 2008 enabling our polyester capacity that can be extended all over the markets in Taiwan, USA, Vietnam and Mainland China. Consequently the allocation of marketing can be more rapid and flexible, and the operation result can be expected a further enhancement. |
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Vietnam Formosa Industries Corporation |
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Nan Ya Copper Foil |
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In the electronic materials side, as the end users regarded the business climate turning towards conservativeness tendency and made an adjustment to their inventory to respond, which brought about the rapid decline in demand for the supply chain of the entire electronic industry. Because the company simultaneously produces copper clad laminates, epoxy, glass fabric, cooper foil, in addition to glass yarn manufactured by PFG Fiber Glass Corporation that is invested by the company, so it constructed a complete supply chain by taking shape of upstream and downstream integration of electronics materials and enjoyed a extreme competition edge. Moreover, in response to the high speed transmission characteristics and the environmentally friendly |
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material without lead and halogen in recent years, the company developed halogen free and high heat resistance substrates, promoted high level IC substrate market, and dedicated to significantly raise the sales proportion of high value-added products. Therefore the company did still get a profit for electronic materials product amidst unfavorable operation environment. |
In view of the global PCB industries have been gradually relocating and centralizing to Asia-Pacific region, the company constructed a series of electronic materials plants producing upstream raw material for PCB industry, such as fiber glass textile yarn plant, glass fabrics plant, copper clad laminates plant, epoxy plant, copper foil plant. The operation of these plants not only enjoyed a good condition of production and marketing, but remained a healthy profit. |
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Nan Ya Printed Circuit Board Corporation, an investment made by the company, concentrated its attention on developing and manufacturing high-level IC package substrate and diversified products over a long period of time. Its market share in the 1st half of 2008 was persistently growing due to the captioned company and its customer jointly carried out R&D into PC, and IC substrate for electronic consumers' goods, in addition to the effective enhancement for production know-how and yield. Unexpectedly, as the impact of financial storm began in the |
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| 2nd half of 2008, the global consumption power came down rapidly, and the customers were in process of substantial adjustment to their stocks and orders, which enabled Nan Ya Printed Circuit Board Corporation decling its sales amount month by month in the 4th quarter 2008. Besides Nan Ya Printed Circuit Board Corporation had to persistently keep in line with the world-class IC key players to develop next generation processor and high layer count substrate for chipsets, it needed to aggressively strive for more new customers source so as to decentralize the market risk. |
As for the printed circuit board plant situated in Kunshan mainland China, with annual capacity reaching 19.2 million square feet, it primarily produces conventional circuit board and substrate comprehensively applying for automotive, consumers' electronics, and memory modules. An expansion plant, with yearly capacity of 5.4 million square feet, is being actively constructed. Through the complementary effect of our production in two sides across the Taiwan strait, the advantage of mutual technic support can be exerted and the profit can be enhanced a step further. |
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Nan Ya Technology Corporation III Plant |
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Nan Ya Technology Corporation, an another investment made by the company, is specialized in the manufacture of memory modules and wafer. It already has its own brand name of device and memory modules. The captioned company currently has one 8” wafer plant utilizing 110 Nm know-how process and foundry service, and one 12” wafer plant adopting 70 Nm know-how process. In April 2008, it signed joint venture contract with Micron Technology Inc. (USA) to develop stack technology process with advanced 43 Nm max. know-how. Both companies mutually owned Inotera Memories Inc. |
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having two 12” wafer plants with monthly capacity of 130,000 wafers in total. It was scheduled that Nan Ya Technology Corporation and Inotera Memories Inc. will be led in production of 68/50 Nm know-how process at their 12” wafer plants in the 2nd half of 2009 and brought the production cost down a step further. |
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In terms of the business outlook for 2009, the global economy is being shrouded in financial storm, bankrupt current, and soared level of unemployment rate. In the circumstances, the non-government consumption willingness is unable to lift and the global business climate will be continuously slowed down, which will be considerably unfavorable to the domestic economic development and operation environment. In the face of the aggravating international competition and challenge day by day, and in order to break through all sorts of adverse business environment, the company will persistently and closely assess the interrelated industrial prospect; accelerately transform and adjust the industrial structure; develop toward the higher technological and high value-added industries; set up Taiwan as the hub of planning and management and strategy so as to provide the various supports of technique, R&D, and marketing allocation required by domestic or foreign subsidiaries invested by the company. In addition, through the abundant operation experience and the advantage of diversification and vertical integration, which enables the company to upgrade the whole competitiveness. Again, in the face of the business climate change that is an unpredictable risk, the company expects that its operation can be stood firm and unmoved, and its performance can be gained victory among them. The focal point of investment henceforth for the company is to watch for the proper moment for expanding the capacity of electronic materials product manufactured by its plant in mainland China depending on the demand status in electronic industrial market, in addition to positively participating in the investment in petrochemical products with interests sharing. Besides, as the demand of polyester product in local market of Southeast Asia has been growing, the company will persistently expand its capacity of polyester fiber plant in Vietnam. On the whole, the focal direction of development for the company in future still remains with petrochemicals and electronic industries. The company anticipates to centralize investing in industries with greater margin so that the profit is able to ensure. |
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EG-1、2 Plants |
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