Chairman Douglas Hsu’s Address at Yearend Party

Yearend party should be a joyful and warm occasion, perhaps it’s too serious to go over our strategic directions. However, I would still like to take this opportunity to address important global trends and the Group’s future direction.  Hope that each company can expedite its own transformation, continue to move further to embrace changes in the new era.  Furthermore, each colleague should also continue to sharpen their foreign language abilities to be able to stand on the world’s stage in order to participate in global competition.

The 6 important trends that affecting business environment the most are：
1. Industry 4.0: In the era of Industry 4.0, the application of Internet of Things, Big Data, cloud computing, and smart equipment can fully connect the integrated supply chain, production, and customer service through virtual and physical integration. This is to master and analyze the end customers, drive innovation of production, services, and even business models. In other words, traditional production is marching toward mass customization, such as different colors for each pair of shoes, each outfit with different styles, to satisfy the needs of different customer segments.

2. Environmental Sustainability: With increasing focus on environmental issues, global consumers and brands are active in supporting sustainable policies.

3. Transparency & Traceability: With more focus on the transparency and traceability of supply chain, manufacturers must be responsible for the management of their supply chain, to be traceable on product information, and ensure the production and distribution process fully comply with environmental regulations.

4. Protectionism: To maintain existing competitive edge, many countries are imposing more rigorous restrictions on the enterprises, which not only greatly affects global trade, but also impedes the healthy development of world economies. The US-China trade war is unresolvable yet, and we should pay close attention to its subsequent impact.

5. Digital Revolution: The new technologies spurred by Artificial Intelligence (AI) have bought disruptive changes in the industry. All future processes must be digitized to expedite industrial developments.

6. Energy Transition: The world is actively promoting the development of new energy projects. Taiwan still needs to enhance its development and application of green energy, and should continue to improve its current energy system and management.
　　
It is worth noting that when industrial knowledge becomes mature, imitation will inevitably follow and create a red ocean market with stiff price competition. Therefore, each company should be bold to embrace innovation. Just as mentioned in the book titled “LEAP”, only with continuous innovation can a business leap onto new territory, and maintain its competitive advantage.
　　
However, in order to build capacity for continual innovation, business needs to have an innovation strategy, innovation system, and a culture for innovation. Each company should review: Is there growth for the current core market? Have you met customer needs? How much potential does your existing technology paradigm offer for improvement? Whether you are able to create barriers to imitation? By knowing one’s current position, the company may stipulate its innovation strategies.
　　
Over the past 50 years, Far Eastern Group has been committed to CSR efforts. This year, the celebration of the Group’s 70th anniversary will also focus to philanthropic activities, which gesture is very well received by all.
　　
I would urge every enterprise of Far Eastern to transform into a leading company in your respective field that offers best products/services, to have a top management team and a large paying customer base.  Moreover, to build sustainable business model with strong execution, processes and financial discipline. Also, to understand big data, AI/Analytics, clouds, IoT, & security, being agile, adaptable, and environmental friendly.
　　
Last but not least, despite the hardships in 2019, thank you all for your hard works that fully exhibit the Far Eastern spirit and achieve outstanding performance. In 2020, the year of the Golden Rat, we will foresee more upcoming challenges, in particular the relation of U. S.-Iran is near brink of war that shall affect oil prices and impact all industries. Despite challenges in external environment in economic recovery or recession, we believe that Far Eastern Group can march steadily into the second 70 years if we all work closely together.＃