About Us

Overview

In 2019, Nan Ya Plastics Corp. (NPC) recorded a consolidated revenue of NT$ 286.30 billion, 14.0% lower than NT$ 333.06 billion in 2018; and a consolidated pre-tax income of NT$ 26.69 billion, a reduction of 56.6% compared to NT$ 61.53 billion in 2018.

In 2019, NPC faced fierce industry competition, with continued increase in competitors' capacity and market supply, and the trade war had also created negative impact in the world's economy. The market adopted a strong wait-and-see attitude, and the overall performance reflected a difficult operating environment.

The four major product categories of NPC operations are plastics, chemicals, polyesters, and electronic materials.

With regard to plastic products,

NPC has accelerated the research and development of new applications, new materials, and products that meet environmental protection trend and have unique specification, and increased the proportion of production and sales of differentiated and high-value products. NPC continues to transform and deploys automated monitoring equipment to ensure quality stability of production process, and together with e-commerce and online marketing, it has expanded into high-end markets such as the U.S. and Japan as well as potential emerging markets. With market expansion, sales increase, capacity utilization increase, cost reduction, the advantages of distributing production domestically and overseas in Taiwan, China, the U.S. ,and Vietnam, and timely adjustment of plants' production and sales, NPC strives to provide customers with satisfied services. The efforts of NPC have enabled plastic processing products to provide stable profitability.

In terms of petrochemical products,

in line with vertical integration and division of labor in Sixth Naphtha Cracking Plant in Mailiao, NPC's products, including ethylene glycol (EG), Bisphenol-A (BPA), 1,4-butylene glycol (1,4BG), plasticizers, phthalic anhydride (PA), 2-ethylhexanol (2EH), and epoxy resin (EPOXY), have been vertically integrated with upstream and downstream industries, thereby forming a complete supply chain, which supports the development of downstream industries such as polyester, electronics, and plastic processing, respectively.

With a slow global economic growth and negative impact of the trade war, the market demand decreased in 2019. With the increasing petrochemical capacity by China, price generally declined, with the prices of main products, BPA and EG, dropped by 30% compared to 2018, resulting in significant decrease in profit. In the future, NPC will respond to the change in raw materials and product prices, flexibly adjust its capacity, continue to drive process optimization, and improve its sales in areas outside China, so as to increase revenue and profit.

In terms of polyester products,

China-U.S. trade war and increase in crude oil price have made market competition more intense in 2019. The continued fall in price, and serious price-slashing situation by competitors resulted in sales not meeting expectation and a drop in profit.

NPC will continue to actively research and develop, monitor and control product quality stability, promote environmental protection, PET bottles recycling, biodegradability and green energy, and explore new application areas for products, so as to differentiate the market and expand scope of sales. NPC will enhance customer recognition so as to continue to increase sales and maintain stable profitability.

For electronic materials,

with the ongoing development of various electronic product application devices since the fourth quarter of 2016, the active promotion of new energy vehicle in the world and construction of related infrastructure such as charging pile, the demand of electronic materials significantly increases, attracting companies to expand their investments, and resulting in increase in capacity. In addition, with China and the U.S. imposing higher tariffs on each other, decrease in home appliance orders, and increase in uncertainties of electronic product market, customers reduce their inventory and respond to urgent orders, and are more conservative in their placing of orders. However, due to the advance deployment of 5G communications infrastructure, mid and high-end materials demand increased, and 2019 overall revenue is only slightly lower than 2018.

The 5G infrastructure and the Internet will continue to develop in the future. With the related applications, it will drive the demand of electronic materials and upstream raw materials. NPC will actively promote differentiated products, increase sales proportion of mid and high-end materials for high-value-added and high-functionality niche products, to cater to the trend of market development. Also, it will make use of the advantages of complete upstream and downstream vertical integration, to flexibly adjust the capacities in Taiwan and China, driving the increase in revenue and profit.

Nan Ya Printed Circuit Board Corp., which is invested by NPC, has long been focusing on the development and production of circuit boards and IC package substrates. Optimistic with the demand of 5G infrastructure, it has taken advanced move in the development of related products. The sales of high layer and large dimension substrate for the related applications were strong in 2019. In addition, the demand for high-valued products such as System-in-Package for wearable device applications, and interposer for high-end mobile device was promising during the second half of the year, driving increase in profit, and hence successfully turned loss into profit. In response to future development trend of semi-conductor, it actively strengthens its research and development capabilities, recruits more research and development talents, speeds up the development of new products, and expands IC substrate capacity to meet market demand. In the future, the company will work closely with customers, get more niche products orders, and continue to enhance production technologies, improve yield and reduce cost, to improve operational performance.

Nan Ya Technology Corp., another company invested by NPC, is committed to the development, manufacture, and sale of dynamic random-access memory (DRAM) products. Though DRAM industry significantly slowed down in 2019, the company still maintained good profitability, and completed the product development and shipping of low-power 20 nm 4Gb/8Gb LPDDR3, 2Gb/4Gb/8Gb LPDDR4/4X, etc. It has also successfully developed 10 nm DRAM cell design, enabling future DRAM products to continue to shrink in size for at least 3 generations. In 2020, it will develop first generation 10 nm lead products, DDR4 and DDR5 on its own technology platform, and is expected to gradually go into trial production after the second half of the year, in preparation for mass production of 2021. In 2020, it will continue to focus on 20 nm product portfolio optimization to increase competitiveness, and increase process technologies, product design, and customer services capabilities, to meet market demand, and provide customers with best memory solutions.

Looking ahead to 2020, the environment is still disturbing. The world's economy has been affected by many factors, including trade war, technological war, currency war, and threat of armed conflict of geopolitics in the long run. Also, the virus outbreak that affects human health in the beginning of the year deepens the unrest in the market, suppressing the opportunities for economic recovery through new technologies development and application in the short run. If the various uncertain factors can be reduced in the future, the economy should be able to develop normally.

With the complex international situation, maintaining stable growth and profit is still the most important goal. Therefore, NPC will continue to actively push forward its four business focus:

(1) Market expansion: Based on the physical sales channels with the assistance of online marketing, NPC actively expands and separates the market. With the configuration of domestic and overseas production bases, diversion in sales channels, production capacity allocation, and market expansion, NPC carries out overall production and sales allocation, increases revenue, boosts capacity utilization rate, and reduces cost.

(2) Research and development: Besides developing new products with different characteristics to satisfy customer needs and market trend, NPC makes good use of the features of existing products to explore new application. It expands customer base and explore new markets to increase the proportion of differentiated and high-value products in the hope of increasing profitability continuously.

(3) Circular economy: Implement reduction, reuse, and resource recycling, reduce raw materials and energy consumption from the source, and carry out resource integration across plants and companies, recycle energy, and finally recycle the waste generated, achieving recycling and reuse, and attaining the economic benefits of low consumption, low emission, and high utilization.

(4) Process optimization: NPC will continue to improve and upgrade its equipment, increase the efficiency of existing equipment/production lines, create maximum benefit with minimum investment, and actively implement AI to attain intellectualization in production process.

In the future, we will continue to make AI our priority, and make use of image recognition technologies to carry out product quality inspection and control, and conduct systematic gathering, processing, and application on the massive data, so as to optimize the control of process conditions, increase quality and reduce raw materials and energy consumption. We will also expand it horizontally to domestic and overseas plants to create greater benefits.

In addition, besides participating in the joint venture expansion in US Texas OL-3 and Louisiana at present, our total ongoing investments amount to approximately NT$ 68 billion, including 14% in Taiwan, mainly in high-value copper foil, polyester film, PP synthetic paper, etc., and 86% in other countries, mainly in expansions of EG plant in the U.S., which is about to be completed, as well as copper foil substrate, fiberglass cloth, printed circuit board, aluminum plastic film, and BPA plants in China. When they go into production, it is expected to generate an annual output of NT$ 52.4 billion, which will drive the continued growth of NPC.