Chairman Douglas Hsu’s Chinese New Year Gathering Address

　　Marching into the new year, the Far Eastern Group has posed a fresh start, including new leaders of Shangri-La’s Far Eastern Plaza Hotel, Taipei, Yuan Ze University, and Far Eastern Memorial Hospital; together with the opening of Chubei New Century Shopping Mall after five years of planning.  Hopefully with our joint efforts,  we will expand a greater horizon for Far Eastern Group.

　　First, I would like to express my gratitude to you all.  Despite the impact of global pandemic last year, we have demonstrated the Far Eastern spirit to expand businesses globally, registered excellent performance, and won respects and wide recognitions.  As Chairman of the Group, I feel very honored.

　　In 2021, the Group registered consolidated revenues of NT$725.9 billion, up 12% from 2020, which may be ranked 465 in top 500 list of the Global Fortune.  The Group’s pre-tax profit reached NT$138.5 billion, up 21% marking historical new high, and ranked among top 100 level in Global Fortune Top 500 List.  Furthermore, total assets of the Group reached US$108.29 billion, grew 4%, with debt ratio of 49%, constituting a healthy financial structure.

　　Looking into 2022, the Group’s overall revenues are expected to increase 10%, revenues of the listed companies including Far Eastern New Century, Asia Cement, Far Eastern Department Stores, Far EasTone Telecommunications, Oriental Union Chemical, U-Ming Marine Transport, Far Eastern International Bank, Everest Textile, and Asia Cement (China) are all expected to outperform than last year, most companies are forecasted to grow around 10%.  In contrast, the growth of startups and high-tech companies ranges around 30% to 40%, there is still much room to improve.  Hope that each enterprise be able to search for new momentum, such as application of innovative technologies in order to gain significant developments.

　　On the other hand, in 2022 profits of the Group companies will continue to reach new highs, and after-tax profits of the Group’s nine listed companies are expected to maintain outstanding performance.  Among which, profit of Far Eastern New Century stays optimistic, after-tax profits of Asia Cement and Asia Cement (China) will increase, Far EasTone Telecommunications and U-Ming Marine Transport maintain steady, after-tax profits of Far Eastern International Bank, Far Eastern Department Stores, Union Chemical Corporation, and Everest Textile are expected to increase significantly.

　　Just as former GE CEO Jack Welch said: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”  Therefore, each enterprise must be well prepared to respond to the future dynamics.  First, we need to define who we are?  what is the goal of company operations? How to create value?  Is there a strong and distinct culture?  Then we should think about how we operate?  Does the company have a right structure?  Is the decision making efficient?  Can we attract top talent?  Is there a way to break “Silo Effect” between the organizations,  to communicate well, and create synergy?  Most importantly is to get clear how we grow?  Far Eastern Group is a globalized conglomerate.  To adopt with business needs, aside from investing in the manufacturing and retailing industries in mainland China, polyester fiber investment in Vietnam, as well as projects in the Philippines, and the U. S., in the future we may even plan to expand into Europe.  Therefore, we must have a globalized mindset in our management, not only focus on training of foreign language abilities, each enterprise should also think about how to strengthen technological applications, accelerate learning new abilities, and merge into new ecosystem, so as to build a new operating model and business model, and sharpen  competitiveness.

　　In the meantime, we should better understand global trends.  In response to the global restructured supply chains, enterprise must strengthen its regional deployment, and supply nearby targeted markets.  Furthermore, the advancement of digital technologies has brought new business model and consumer behavior; presently some affiliated companies have achieved satisfactory result in expediting enterprise’s digital transformation, some still try to catch up.  Also, with drastic climate changes and frequent extreme weathers, each nation is abided to commit to reducing carbon emission, and the industry must be adapted to this trend so as to promote energy transformation.

　　Facing with environmental changes, each enterprise is anticipated to quickly develop the four key capabilities.  The first is agility, the ability to quickly pivot and move.  The second is flexibility, the ability to rapidly shift capacity and service levels in accordance with changes in supply and demand.  The third is endurance, the ability to maintain operational excellence under pressure.  The fourth is sustainability, the ability to create lasting value and equitable impact for all stakeholders including customers, employees, and the society.

　　Furthermore, all Far Easterners should understand your company’s strategic direction, your industry position, your core competence, and the company goal for the next 3 years?  You must have substantial plan and strategy, execute and reiterate the reviewed plans promptly.  After all, environmental change was moving relatively slower in the past.  Enterprise could focus on outrunning its peers; nowadays with quick and drastic environmental changes, we must be able to anticipate market and industry changes, shape new operating and business models to continue to create outstanding growth.  During the 70 plus years, Far Eastern Group has already registered remarkable achievements.  In the future, we will work together diligently for a promising tomorrow.

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