Far Eastern Group
Celebrating 60 Years of Far-Reaching Success
“Connecting Lives for a Better Tomorrow”
Year 2009 marks the 60th anniversary of Far Eastern Group (FEG), a major diversified business conglomerate headquartered in Taipei that has extended its business reach throughout Taiwan and China. With its roots in textiles, the Group has branched out into ten different industries with enormous success in each. While pursuing excellence in its businesses and elevating value for shareholders, the Group perseveres to fulfill its social responsibilities, improve employee benefits and remain environmentally conscious.
A Vision of Innovation
Since its inception, FEG has been built on a rock-solid motto of “Sincerity, Diligence, Thrift and Prudence,” as communicated by its founder, the late Mr. Y. Z. Hsu. His successor, Douglas Tong Hsu, chairman and chief executive officer of the Group, added “Innovation” to the motto to underscore the importance of FEG’s ever-intensifying aspiration to keep pace with our fast-changing world. Together, these five corporate values are driving FEG full steam ahead.
FEG employs state-of-the-art technology, well-structured organization, top-notch professionals and precise execution of strategies across its diverse businesses. FEG has expanded into and excels in polyester fibers and polymers, petrochemicals, cement, sea and land transportation, retailing, construction, tourism, financial services, telecommunications and social welfare. With nine listed companies—Far Eastern Textile, Asia Cement, Far Eastern Department Stores, U-Ming Marine Transport, Oriental Union Chemical, Everest Textile, Far Eastern International Bank, Far EasTone Telecommunications and Asia Cement (China) Holdings—as well as over 220 affiliated companies operating in more than ten countries with over 50,000 dedicated and highly motivated staff, the Group boasted total assets surpassing US$46.5 billion and annual revenues exceeding US$16 billion in 2008.
“FEG’s goal is to make every firm under our flagship a leader in its industry in Asia and globally,” Chairman Douglas Hsu declares. “This has always been the ambition of our Group in the past, present and future.”
This year, FEG is commemorating its 60th anniversary with a string of activities under the theme “Connecting Lives for a Better Tomorrow.”
“We are dedicated to combining all the resources of our companies and foundations to bring a better life to the people in our operating areas and beyond,” says Chairman Hsu.
FAR EASTERN NEW CENTURY CORPORATION (FENC), formerly known as FAR EASTERN TEXTILE, is the Group’s flagship company and is the leader in the polyester and textile business in production scale, brand name and technological innovation. FENC is the first in Taiwan to vertically integrate its production processes to reach world-class standards. Innovative products include polyethelene terephthalate (PET) packaging materials for beverages and food, amorphous PET (APET) sheets for electronics packaging, low-melt staples for insulation and thermal bonding, industrial fibers for radial tire cords and conveyor belts, and quick-dry or water-repellent fabrics for sportswear. With a team of 200-plus R&D personnel, the Group defines its core competence as the ability to develop high-value-added products unrivaled by those of its peers. The Group’s 2008 launch of PET beer bottles in cooperation with the 251-year-old Martens Brewery Group of Belgium in Suzhou, China, is an example.
FENC now ranks among the world’s top five polyester manufacturers, with an annual capacity of 1.6 million metric tons of polyester polymer and an additional 200,000 to 300,000 metric tons under development. The Group has successfully positioned itself as one of the lowest-cost producers by establishing production bases in Taiwan, China, Singapore, Malaysia, Thailand and Vietnam. Its organizational structure is streamlined, synergistic and capable of operating globally—armed with marketing and sales channels covering the world.
FENC looks to grow through mergers and acquisitions (M&A) opportunities to develop specialty and high-value-added products with cutting-edge technology.
FEG’s petrochemical arm, ORIENTAL UNION CHEMICAL CORPORATION (OUCC), founded in 1975, is expanding aggressively on the mainland. The firm is a major supplier of ethylene glycol (EG) and ethylene oxide derivates in Taiwan and throughout the Asia-Pacific region. Oriental Petrochemical (Shanghai) Corporation, formed by FEG in 2006, operates a purified terephthalic acid (PTA) plant with an annual capacity of 600,000 tons. The firm is open to more strategic partnerships to strengthen its business prospects in China and globally.
The establishment of ASIA CEMENT CORP. (ACC) in 1957 marked the Group’s first step into diversification. ACC produces basic materials for construction and infrastructure that touch our daily lives and are also environmentally friendly. This is best demonstrated by the firm’s ongoing investment and efforts in electronic dust-collection equipment and greenification and landscaping projects, which contributed to the company’s ISO-14001 certification, the first in Taiwan’s cement industry. The company has also won the prestigious Eco-Friendly Enterprise Award for three consecutive years..
ASIA CEMENT (CHINA) HOLDING, an offshore subsidiary of ACC, was listed on the Main Board of the Hong Kong Stock Exchange on May 20, 2008. The Asset awarded the company the Best Mid-Cap Equity Deal 2008, thanks to its successful share launch.
Today, Asia Cement is the forerunner in the industry in terms of operating efficiency, production quality and profitability. With market footholds in Taiwan, China, Singapore, Hong Kong and throughout Southeast Asia, the company has built a world-class cement business with an annual capacity of 20 million tons. Four additional kilns under construction in various parts of China will boost annual production capacity to 28 million tons by 2013. Besides organic growth, M&A offers a strategic possibility to expand into growth markets.
To support the Group’s global transportation needs, U-MING MARINE TRANSPORT, Taiwan’s largest bulk carrier, was established in 1984. U-Ming owns 32 vessels and is expected to take delivery of another three in 2010, reaching a total tonnage of 3.6 million metric tons at that time. U-Ming plans to enter China’s logistics business and is in talks with China for joint venture operations. This bulk carrier has been selected by Taiwan’s China Petroleum Corp. as one of the joint venture partners for future oil transport.
Despite a challenging global economic climate in 2008, U-Ming continued to post stellar earnings growth and is now one of the highest-earning bulk carriers globally. U-Ming attributes its high profitability to its ability to anticipate industrial change. It manages its fleet portfolio effectively through long- and short-term contracts, controls costs efficiently and implements comprehensive risk management.
In 2008, Marine Money International magazine awarded U-Ming second place in its ranking of enterprises based on outstanding financial performance.
FEG’s retail business grew out of FAR EASTERN DEPARTMENT STORES (FEDS), which started 42 years ago. It has since expanded into 35 business units in Taiwan and another 11 in Mainland China. FEDS is the only publicly listed department store chain in Taiwan and includes SOGO DEPARTMENT STORES, hyper mart AMART, THE MALL and CITYSUPER.
In 2002, FEG acquired Taiwan’s Pacific SOGO Department Stores and Pacific China Holding Ltd., further expanding its department stores chain in both Taiwan and Mainland China. With a wide collection of world-famous fashion brands, SOGO Department Stores consistently registers the highest sales per ping (3.3 square meters) in Taiwan. At the same time, Pacific China Holding helps the Group capitalize on the burgeoning consumer market across the Taiwan Strait in China. FEG currently has six major retail stores under construction.
The Group’s HAPPY GO joint-bonus-point program encompasses 6 million members to integrate the Group’s various retail-related businesses, which has led to the launch of the GoHappy e-commerce service. These are examples of the Group’s integration of retail-related businesses.
Enriching People’s Lives
As the leading brand in Taiwan’s mobile communications business, serving 30% of the mobile phone market, FAR EASTONE TELECOMMUNICATIONS spearheads the convergence of mobile, broadband, media and Internet services to provide consumers easy access to a wealth of possibilities.
Established in 1998, Far EasTone has grown through acquisition and cooperation with leading international telecom groups such as NTT DoCoMo, SingTel and previously AT&T to offer innovative integrated services and enterprise application solutions.
Far EasTone recently announced a strategic cooperation agreement and share subscription agreement with China Mobile, the largest mobile telecommunications operator in the world. Under these agreements, the two companies will cooperate in a number of areas encompassing joint procurement, roaming services, data and value-added services, as well as network and technology advancement. Such strategic collaboration not only sets the stage for more cooperation, but also exemplifies Taiwan and China’s heightened “cross-strait” interaction, be it in goods, services or telecom.
FEG plans to develop the 24-hectare, multibillion-U.S.-dollar TELECOM PARK—Taiwan’s first privately designed and developed telecommunications science park—in Banciao, Taipei County. The first building will be ready for occupancy by mid-2010.
FEG is a leader in the hotel services sector and has achieved synergy among its many companies in this industry. Since 1994, Shangri-La’s FAR EASTERN PLAZA HOTEL, Taipei, has been recognized as one of the best five-star hotels in Asia. In early 2009, the Group opened a 336-room, five-star Shangri-La Far Eastern Plaza Hotel in Tainan.
The Group also boasts a strong financial sector. FAR EASTERN INTERNATIONAL BANK (FEIB), inaugurated in 1992, combines professional talent with information technology to create a full-service bank. With the opening of its Hong Kong branch, the Bank is now developing regional financial services and sees opportunities for cooperation in the area. By integrating its securities and investment trusts and consulting, leasing, asset management and insurance agency businesses, Far Eastern Group offers clients a wide variety of financial planning and asset management services. With the China market opening up, Taiwan’s financial sector has the opportunity to extend into the mainland. FEIB has demonstrated great potential for combining the Group’s consumer bases in retail, telecom and loyalty cards to drive future growth in the burgeoning e-commerce market.
FEG has always been a good corporate citizen through its work with several large foundations. FEG is committed to social responsibility through the Group-wide programs initiated by its founder, which include FAR EASTERN MEMORIAL FOUNDATION (est. 1976) and FAR EASTERN MEDICAL FOUNDATION (est. 1977).
FEG also plays an active role in supporting higher education to cultivate new talent for Taiwan’s economic development. The ORIENTAL INSTITUTE OF TECHNOLOGY and YUAN ZE UNIVERSITY, established in 1969 and 1989, respectively, have nurtured thousands of industrial technology specialists. With its modern teaching facilities, brilliant teaching faculty and outstanding academic records, Yuan Ze was granted the 2003 National Quality Award, the first of its kind given to a local university.
FAR EASTERN MEMORIAL HOSPITAL (FEMH), established in 1981, is the largest medical center in Taipei County with 1,100 beds and is renowned for its medical treatment of cardiovascular diseases. The hospital was granted the National Quality Award in 2008 for the second time. FEMH will open a new wing with another 1,000 additional beds in the near future to serve the community.
After the passing of FEG Founder Y. Z. Hsu in 2000, the FAR EASTERN Y. Z. HSU SCIENCE & TECHNOLOGY MEMORIAL FOUNDATION was set up in the following year to promote high-tech R&D.
Good architecture improves quality of life. To enhance the living environment in the region, Far Eastern Memorial Foundation sponsors the Far Eastern Architectural Design Award to encourage talented architects on both sides of the Taiwan Strait.
Being environmentally conscious, the Group is donating US$6 million to cosponsor and build the Far Eastern EcoARK for the 2010 International Flora Expo hosted by the Taipei City Government. The Group wants to set an example to encourage recycling by building a high-tech ark-shaped structure made up of over 1 million recyclable PET bottles collected by FEG from the public.
The Far Eastern Group has completed its first 60 years with remarkable results. The next challenge will be targeting a strategy for the next 10 to 20 years by taking advantage of the Group’s technological advancements to increase its cross-strait business in China and throughout the world.
“To this end, the core values of the Group are fine, but we need to adjust our new vision to an enlarged, fast-growing market both in Greater China and globally in order to evolve into a new organization with organic growth and unprecedented opportunities through major mergers and acquisitions,” says Chairman Hsu. “This should set the pace for the next 60 years.”
While 2009 is a milestone year for FEG, it also marks the beginning of a new era of possibilities for the Group, according to Chairman Hsu.
And, as the philosopher Søren Kierkegaard once wrote, “[What] is so intoxicating, as possibility!” Chairman Hsu affirms: “Yes, the Far Eastern Group has great possibilities.”
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