TFC — Interim / Quarterly Report 2013

Jun 26, 2013

Taiwan Fertilizer Co., Ltd. (1722 TT) Company Introduction

June 3rd, 2013

1

Table of Content

� History and Milestones

• TFC Financial

• Lines of Business

• Fertilizer and Chemical Business

� Al-Bayroni Business

• Land Development

==> picture [217 x 39] intentionally omitted <==

2

History and Milestones

1946

1980

1993

1999

2009

TFC was established by the government and initiated to produce fertilizer & chemical products

Established a 50:50 JV, Al-Bayroni with SABIC Co. in Saudi Arabia to produce Urea & Ammonia

Agreed to invest in 2-EH project in Al-Bayroni and to extend JV contract until 2013

TFC was privatized, but the government is still the largest shareholder with 24% stake

Agreed to extend JV contract for another 20 years after 2013

==> picture [217 x 39] intentionally omitted <==

3

Fertilizer & Chemical

Line of Business New Business

==> picture [780 x 168] intentionally omitted <==

----- Start of picture text -----

Domestic
Market
Property
----- End of picture text -----

==> picture [780 x 168] intentionally omitted <==

----- Start of picture text -----

Overseas
Investment
----- End of picture text -----

==> picture [217 x 39] intentionally omitted <==

4

					TFC’s							Financial–														Breakdown(1)
					Core Business (Operating Profit+ Jubail JV)																	Others													NT$		Million
																																320
					4065													3721							4252
										2111																						2202
					(1,821) 2009					(266) 2010								(435) 2011							(502) 2012							2013Q1
																																			NT$ Million
					Year								2009						2010						2011						2012			2013Q1
					Operating			Profit					1,771						846							447					1,115				1420
					Jubail	JV							2,294						1,265						3,274						3,137					782
					Core Business								4,065						2,111						3,721						4,252				2202
					Others								(1,821)						(266)						(435)						(502)					320
					Pre-tax Profit								2,244						1,845						3,286						3,750				2522

==> picture [217 x 39] intentionally omitted <==

5

’ – TFC s Financial Breakdown(2) Total Revenue

Gross Margin

2013 Q1: 5.90 Billion

2013 Q1: 1.81 Billion

==> picture [274 x 135] intentionally omitted <==

----- Start of picture text -----

Others
2%
Fertilizer
Real Estate
39%
32%
Chemical
27%
----- End of picture text -----

==> picture [238 x 115] intentionally omitted <==

----- Start of picture text -----

Others Fertilzer
Chemical
-4% -3%
10%
Real Estate
97%
----- End of picture text -----

2012: 17.80 Billion

==> picture [260 x 119] intentionally omitted <==

----- Start of picture text -----

Others
Real estate
2%
11%
Fertilizer
47%
Chemical
40%
----- End of picture text -----

2012: 2.42 Billion

==> picture [277 x 116] intentionally omitted <==

----- Start of picture text -----

Others Fertilizer
Chemical
9% 2%
23%
Real estate
66%
----- End of picture text -----

==> picture [217 x 39] intentionally omitted <==

6

TFC’s Financial – Overseas investment

�Saudi Arabia- Al-Bayroni JV

Four Main Products: Urea, Ammonia, 2-EH, DOP

Contribution from Al-Bayroni JV (TFC Account) NT $ million 2,294 1,265 3,274 3,137 782 5,000 0 2009 2010 2011 2012 2013Q1

Note:

According to the overseas income tax non-deductable claimed by TNTA, the difference caused from 2005~2009,1.63 billion, was deducted from profit contribution of 2010 Jubail.

==> picture [217 x 39] intentionally omitted <==

7

TFC Dividend Polic y

==> picture [780 x 168] intentionally omitted <==

----- Start of picture text -----

3.91
3.40 3.41
EPS (NT$) DPS (NT$)
3.07
2.70
2.24 2.20 2.30
1.80 1.76
1.40
1.29
2007 2008 2009 2010 2011 2012
----- End of picture text -----

• �TFC historically maintained a high cash payout ratio.

• �Dividend policy: stable growth and mainly paid out with cash dividend.

==> picture [217 x 39] intentionally omitted <==

8

Fertilizer & Chemical Business

Fertilizer Business in Taiwan

�What we supply—

Compound and single nutrient fertilizer products.

�Where our market—

Fully supply to domestic farmers

�Who we are—

Leading company in fertilizer market, taking 75% of market share in general.

Chemical Business in Taiwan

�What we supply—

Ammonia, sulfamic acid, untreated urea, nitric acid, oleum, melamine, etc.

�Where our market—

Except some portions of sulfamic acid and melamine products sold to overseas, mainly for domestic industries in Taiwan.

New Directions—

• �Taichung Consolidating and Relocation Project

�Seeking Investment Opportunities in China

==> picture [217 x 39] intentionally omitted <==

9

Taichung Consolidated & Relocated Project

Benefits—

1.To Save operating and transportation costs 2.Taking advantages of Taichung harbor ‘s location to Invest new projects

3.Land Redeveloping will be in progress at existing plant site after this project

Taifer

Total Investment— Total Investment:12.43 Billion Scope—

Including Fertilizer & Chemical Products. Schedule—

Construction duration: 2007.4~2015.6 Construction in 3 phases

Source from: Google earth

==> picture [217 x 39] intentionally omitted <==

10

Land Development– Map of Significant Projects

==> picture [229 x 115] intentionally omitted <==

Hsinchu Tech Business Park

==> picture [230 x 107] intentionally omitted <==

Taichung Relocation Plant

Kaohsiung Multifunctional Commerce and Trade Park

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [4 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [4 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [4 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [4 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [4 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [4 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [4 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [4 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [4 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [217 x 39] intentionally omitted <==

==> picture [264 x 391] intentionally omitted <==

----- Start of picture text -----

Nan-Gang
( 南港 ) ‧
----- End of picture text -----

==> picture [229 x 111] intentionally omitted <==

Keelung Mixed-Use Development

==> picture [229 x 123] intentionally omitted <==

Nangang C2C3C4 Development

Hualien DSW & Ocean Holiday Park

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

==> picture [5 x 5] intentionally omitted <==

11

Land Bank

Location	Lot of Land	Size(㎡)	Book Value (NT$ mm)	Percent(%)
Taipei City	78	121,856	13,137	36.99%
New Taipei City	125	66,201	1,114	3.36%
Taichung City	1	582	79	0.24%
Yunlin County	1	17,510	91	0.27%
Keelung City	238	240,394	4,729	14.28%
Ilan County	10	4,383	110	0.33%
Hsinchu City	58	234,989	4,253	12.84%
Miaoli County	113	305,706	1,798	5.43%
Kaohsiung City	12	161,253	5,153	15.56%
Hualien County	43	560,082	2,661	8.03%
Total	679	1,712,956	33,125	100.00%

==> picture [217 x 39] intentionally omitted <==

NOTE : The percentage is based on the book value of the land.

12

Land Development Plan in 2012

Area	Size (ping)	Size (㎡)	Current Status
Nangang Business-Trade Park No.R4-1 (Taipei)	1,367	4,520	1. JV with Huaku Corp. 2. Handover in 2012Q4&2103Q1
Nangang Business-Trade Park No.R5 (Taipei)	2,045	6,759	Sold out & construction in progress
Nangang Business-Trade Park No.R13-1 (Taipei)	328	1,087	Passed urban design review. Launching urban renewalproject.
Nangang Business-Trade Park No.C2 (Taipei)	7,051	23,310	1. C2 Hotel leasing- end the bid in 2013 Q1. Bid winners are Grand Hi-lai Hotel & Caesar Park Hotel 2. C3 superficies for release. Calling of tender
Nangang Business-Trade Park No.C3 (Taipei)	12,565	41,537
Nangang Business-Trade Park No.C4 (Taipei)	2,091	6,911
Hsinchu Tech Business Park No.D7-ABCDF (Hsinchu)	17,790	58,810	D7-A applying for construction license
Hsinchu Tech Business Park No.D3 ( Hsinchu)	6,907	22,834	Leased 4907 pins. 2000 pins vacant lot for lease.
Keelung Mix-Use Development (Keelung City)	9,772	35,563	Change of the industrial districts in urban planning
Kaohsiung Multifunctional Commerce and Trade Park (Kaohsiung City)	48,779	161,253	Rezoning
Hualien Ocean Holiday Park (Hualien)	138,734	458,627	Landscape improvement in progress

==> picture [217 x 39] intentionally omitted <==

13

Note: 1 ping equals to 3.3 ㎡

Location of Nangang

==> picture [780 x 345] intentionally omitted <==

----- Start of picture text -----

Taipei Main Station
Zhongxiao E. Rd. Songshan Airport
Xinyi Planned Area Neihu Technology Park
Nangang
Great Tappei
R13
R17
C6-9 R5
C4 R4
NangangNangang C3
Business ParkBusiness ParkC2
Business Belt
Industry Belt
----- End of picture text -----

==> picture [217 x 39] intentionally omitted <==

14

Significant Developments in Nangang

==> picture [780 x 379] intentionally omitted <==

----- Start of picture text -----

Nangang Software Park I&II Nangang Software Park lll
N
National Freeway
China Trust R5
Headquarter C4 R4
Nangang Exhibition
MRT Hall II
C3
Bannang Line
Nangang Exhibition
Hall I C2
MRT
Wenhu Line
Nangang Exhibition
Hall III
(planned Site)
Railroad Expressway
----- End of picture text -----

==> picture [217 x 39] intentionally omitted <==

15

Accessibility

==> picture [227 x 97] intentionally omitted <==

Situated at the major traffic node - in proximity to freeways, railway, HSR and MRT stations

• 20 mins drive to Taipei CBD and Keelung; 40 mins drive to Yilan and Taoyuan

==> picture [780 x 310] intentionally omitted <==

----- Start of picture text -----

drive to Yilan and Taoyuan
�
Two freeways, railroad, and HSR systems to
connect with other cities
�
Access Taipei CBD via Two MRT lines and one
expressway
Freeway No.1 MRT Wenhu Line
Neihu
Technology
Park
Taipei Main Station
Zhongxiao E. Rd.
Ximentin Xinyi Planned
Area
Railway & HSR systems
MRT Ban-nan Line
Huandong Blvd.
(expressway)
Freeway No.3
----- End of picture text -----

==> picture [217 x 39] intentionally omitted <==

16

Market Demographics

Large potential market for the Site - incl. local residents, employees, and exhibition participants

==> picture [726 x 360] intentionally omitted <==

----- Start of picture text -----

Jinshan
incl. local residents, employees, and
Sanzhi
exhibition participants
Wanli
1 million residents in the major
Danshui
catchment area
Beitou
Nangang, Neihu, Songshan, Xinyi & Xizhi
Shihlin � Major catchment area within 20~30 mins
drive to the site
Luzhou �
Population still growing, and diversified in
Neihu Xizhi
different age groups
Sanchong
Zhongshan
Songshan Site Workforces in Nangang Business Park
Datong
� About 15,000 employees in 2010,
Zhongzheng
Banqiao Nangang expected to exceed 40,000 people in
Wanhua Daan Xinyi
near future
Foreign & local exhibitors and visitors
Yonghe
�
Shenkeng Wenshan The launch of the Hall 2 in 2015, together with
the Hall 1, likely to attract millions of visitors
Xindian and tens of thousands of exhibitors per annum
----- End of picture text -----

• The launch of the Hall 2 in 2015, together with the Hall 1, likely to attract millions of visitors and tens of thousands of exhibitors per annum

==> picture [217 x 39] intentionally omitted <==

17

Land Develo ment Pro ect– R4-1 & R5 p j

==> picture [325 x 232] intentionally omitted <==

R4-1 (JV with Huaku) Land Size：4,520㎡ (1,367 ping) Gross Floor Area：25,002㎡ (7,563 ping) TFC Share：53.57% Expected Revenue：NT$ 3.2 billion Schedule：1.Sold out in 2010 Q3 2.Handover in 2012 Q4 & 2013 Q1

R5 (TFC’s Portion) Land Size： 6,759㎡ (2,045 ping) Gross Floor Area：33,778㎡ (10,218 ping) Units：109 units & 250 parking lots Expected Revenue：NT$ 9.7 billion Schedule: Sold out in 2011 Q1, constructed in Q4

==> picture [217 x 39] intentionally omitted <==

18

、 Land Develo ment Pro ect– C2 C3 & C4 p j

、 C2 C3 & C4

==> picture [373 x 201] intentionally omitted <==

Land Size：71,758㎡ (21,707 ping) Plot Ratio：440%(C2 & C3)；360%(C4)

Policy：

• C2 & C4：Rental Property Development

• � C3 ：Superficies Releasing

Schedule:

• Invite HCCH and Tange to design C2 architecture in 2011 Q4

• C2 hotel call for tender in 2012 Q4. End the bid in 2013 Q1. Grand Hi-lai Hotel and Caesar Park Hotel are the bid winners

• C3 superficies releasing project approved by the board of directors. Calling for tender.

==> picture [217 x 39] intentionally omitted <==

19

Location of Tech Business Park

==> picture [780 x 459] intentionally omitted <==

----- Start of picture text -----

Taipei
Hsinchu
City Center
K.D.
Interchange
Hisnchu
Hi-Tech Park
Taichung
20
Rd. K.D. 5
Expressway
中華路
-
----- End of picture text -----

Land Development Project–Hsinchu Tech Business Park

==> picture [295 x 399] intentionally omitted <==

----- Start of picture text -----

D7-ABCDF
D7-E
----- End of picture text -----

Hsinchu Tech Business Park Land Size：191,800㎡ (58,020 ping) Plot Ratio：210％

Hsinchu Tech Business Park-D7-ABCDF Land Size：58,800㎡ (17,787ping) Plot Ratio：210％

Program：Office、Commercial Building Schedule：

D7-A Applying for Construction License

==> picture [217 x 39] intentionally omitted <==

21

Land Development Project–Hsinchu Tech Business Park

D3 Mobile City (short-term use)

Land Size：22,834㎡ (6,907 ping) Plot Ratio ：210％

Expected Total Investment：NT$120 million

Program：Mobile showroom & maintenance station

Schedule：

1.Leased 4907 pins. 2000 pins vacant lot for lease.

2.Current annual rental income is NT$25 million. Estimated rental income is NT$41 million when full operation.

==> picture [648 x 203] intentionally omitted <==

==> picture [217 x 39] intentionally omitted <==

22

Land Development Project–Keelung - Mixed Use Development

==> picture [780 x 392] intentionally omitted <==

----- Start of picture text -----

Dong-ming Rd., Keelung
Land Size：35,563㎡ (9,772pin)
Plot Ratio ：150％
Commercial Commercial Program ：Housing、Office、Retail
Land Land
Schedule ：Change of the industrial
Park Park districts in urban planning
Residential Residential
Land Land
Residential Residential
Land Land
----- End of picture text -----

==> picture [217 x 39] intentionally omitted <==

23

Land Development Project–Kaohsiung 河 5570 406 Multifunctional ~~Commerce &~~ Tr 1001 017 ~~ad~~ 興 邦 里 e ~~P~~ ark 1201 007 1303014 5 570304 成 功 橋 公三 5 570407綠園道四 1 201 006 ( 河 綠園道四 Kaohsiung Multifunctiona 公 ~~l C~~ 三 ~~o~~ mmerce &Trad 5570 307 ~~e~~ 1 201 004 P ~~ar~~ k 河 5570308 Land Size：161253㎡ 5 570 309 綠園道四 1201003 1 201002 (48,779 ping) 1201001 Plot Ratio ：490％ 000 1001020 ：Retail、Office、 台糖加油站成功站亭亭 Program Hotel、Condotel、 5295D095542A015295D015542A015295D015295D01 1001021 Cultural Facilities 特倉(二)B

5 570 309 1 201002 1201001 000 1001020 台糖加油站成功站亭亭 5295D095542A015295D015542A015295D015295D01 1001021 特倉(二)B (冷卻池) 特倉(二)B 1 001022 5295 D085 980301 鎮 1 106 005 北 里 綠園道五 1106004 525 1106 003 綠園道五 北 1 106 002 特倉(二)C 1106001 1106 000 特倉(二)C 5 542 D02

Schedule ：Rezoning of Trade Park 7C & 7D

特倉(二)C 554554

5 542C07

Land Area

==> picture [217 x 39] intentionally omitted <==

24

Hualien DSW & Ocean Holiday Park

Land Size：458,627㎡ Plot Ratio：210％

Schedule：

• �DSW Project：Draw deep ocean water from 2,200 feet under the Pacific Ocean and produce bottled water and deep ocean minerals extract named Taiwan Yes Co., Ltd..

==> picture [780 x 328] intentionally omitted <==

----- Start of picture text -----

Pacific Ocean and produce bottled
water and deep ocean minerals
DSW Factory extract named Taiwan Yes Co., Ltd..
North Entrance �Ocean Holiday Park：Landscape
Improvement in the south of the site.
DSW Theme Park
SPA Pavilion
Villa
Hotel & Resort
Green Field
South Entrance
----- End of picture text -----

==> picture [217 x 39] intentionally omitted <==

25

==> picture [780 x 168] intentionally omitted <==

Thank You !

==> picture [217 x 39] intentionally omitted <==

26