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2018 Operation Perspectives

Directors and stockholders, thank you and look forward to having your opinions on 2018 operation perspective.

 International trade was increased in 2017 due to the efficiency of global economic growth. 2018’s economic situation is expected to maintain steady growth. However, there are still uncertainties including the butterfly effect of the US-China trade conflict, the rising Fed rate, the trend of NTD exchange rate, and the continuous macro-economic control of Mainland China. All these risks require government and enterprises to respond carefully.

TGI benefited from Taiwan and Mainland China’s profitability and the turnaround of business profitability. TGI’s consolidated operating revenue was 44.8 billion, net income before tax was NTD2.39 billion, and the profit ratio before tax was 5.3%. We make a brief report by product lines as follows. In flat glass, both production and marketing in Taiwan is stable. TGI is training more professional personnel, improving automatic technology equipment, and enhancing the added-value of products by selling high-class building materials such as Low-E Glass and Super Clear Glass, etc.

In ultra-thin glass, the yield rate of 0.33mm product was improved and is supplied steadily to Mainland China and USA market. Meanwhile, to respond to the thinner and lighter covers of electronic products and glass screen protectors, TGI has actively developed the 0.28mm and 0.25mm products to upgrade product value and competitiveness by segmenting the type of competition.

Mainland China continuously pushes the reform of overproduction. It intends to achieve the goal of building a well-off society by conducting its economic development to high quality and domestic demand, and weeding out outdated industrial capacity and restore the balance of supply and demand by implement strict environment law. All TGI’s subsidiaries in Mainland China respond to the rapid change of policy and law by complying with the environmental standard, investing in environmental equipment, and controlling risks. TGI fully uses its flexible capacity and inventory to reduce risk and loss.

In fiberglass, the technology and quality of fiberglass products are always the core competency of TGI. In particular, the capacity of electronic Fiberglass fabric accounts for 9.5% of the global market. For the material of PCB, TGI has successfully developed products with global leading technology. It meets the demand of mobile devices, electronic products for automobile and IoT, and continues to hold the market trend to supply products to high-end clients. For FRP, this year TGI signed an agreement for technology cooperation, manufacturing and supply with Owens Corning, the global leading manufacturer of fiberglass. Through this agreement, TGI obtains the most advanced fiberglass formulation and technology in the world. It will help to increase capacity to 80,000 tons from 60,000 tons, cut production costs, and provide clients with higher performance and more environmental products. Furthermore, it will also boost domestic clients’ composite material quality and market competitiveness.

In container glass, the demands of domestic and export sales are steady. The heat-resistant baby feeding bottles made ofα-33, which has 40% global market share, with thermal resistance to 150〬C of temperature difference, have entered the supply chain of global leading brands by safe and high quality. TGI continues to reinforce traditional sales channels for tableware and kitchenware products, as well as selling select products on B2C platforms, to get closer to consumer markets. Regarding the private brand development, to create product and market differentiation, TGI has commissioned Fukasawa Naoto, who is a Japanese artist of industrial design, to plan and design logotype and products of our private brand. It will be sold on the market by the end of this year.

As Mainland China implements its environmental policy, the demand in the flat glass market is increasing, as well as the price of soda ash. Therefore, Shihlien Chemical Industrial Jiangsu Co., Ltd. (SCJ) reached full production and sales in 2017. With regard to Pharmaceutical sodium chloride, sales are expected to start after GMP certification is obtained in the first half of this year.

Looking to the future, TGI will devote itself to improvement of existing products and production capacity, R&D of fiberglass new products, and development of a private brand, continuing to train technical personnel to achieve greater operational success. TGI is committed to carry out its corporate social responsibility by promoting environmental sustainability, enhancing energy safety, creating a green economy, and to contribute to the society of Taiwan, leading this industry to positive development and initiating a more successful and forward-looking future.

Lin,Por Fong