TGI — Investor Presentation 2017

Nov 30, 2017

Stock Code:1802

TAIWAN GLASS IND. CORP.
Spokesperson: Lin, C M
GM, Finance Dept.

Provide satisfactory products to our customers through advanced technology and Total Quality Management (TQM).

2017-11-30

Notes:

Disclaimer

This brief and the related information issued meanwhile were obtained from internal and external data of the Company and the operation perspectives, it reflected the viewpoints to the future. If there is any change or adjustment in the hereafter, the Company has no responsibility to remind or update.
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The Company did not issue financial forecasts. The financial, business or Q&A explanations may differ from actual result in the future. The reasons of differences may include the changed market demand, unsettled factory and material price, industrial competition, international economic situation, exchange rate fluctuation, suppliers and retailers supply chain, and etc. which can not be controlled by the Company.

Outlines

Introduction of Taiwan Glass Group
Production Facilities
Product Introduction
General Operation Situation of 2017
Situation and Development of the Market
Q&A

Notes:

Introduction of Taiwan Glass Group

Founded on	1964
Capital	NTD$29.08 billion
Chairman	Mr. Lin, Por Fong
Number of Employee	14,957 (until 2017.9.30)
Date of Listing	Listed in 1973
Main Products	Flat Glass Fiberglass Glassware

Notes:

Introduction of Taiwan Glass Group

TGI Directors & Managers

TGI Directors (number is from left side to right side)
| Lin, P F | Front Row 5 | Lin, P S | Front Row 4 | Lin, P C | Front Row 3 | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Lin, F C | Front Row 6 | Chen, C C | Front Row 7 | Hwang, T Y | Front Row 8 | | | | |
| Chang, P S | Front Row 2 | Lim, H T | Front Row 9 | Hsu, L L | Front Row 1 | Tsai, T M | | | |
| Lin, C H | Back Row 4 | Lin, C Y | Back Row 5 | Lin, C M | Back Row 6 | Su, Y T | Back Row 3 | Chen, C C | Back Row 1 |

Introduction of Taiwan Glass Group

TGI Managers (number is from left side to right side)
| Chairman | Lin, P F | Front Row 5 | President & CEO | Lin, P S | Front Row 4 | Executive Director | Lin, P C | Front Row 6 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| COO, Fiber | Su, Y T | Front Row 3 | COO, China Prod. COO, Flat | Lin, C H | Front Row 7 | GM, Fiber | Lin, C Y | Front Row 8 |
| GM, Finance | Lin, C M | Front Row 9 | VGM, Purchasing | Tsai, T M | | GM, TBF | Chen, C C | Front Row 1 |

Production Facilities - Flat Glass

Taiwan Taichung Factory (TF)	Taiwan Lukang Flat Glass Factory (TF-4)	TG Tianjin Glass Co., Ltd. (TJG)	TG Qingdao Glass Co., Ltd. (QFG) Qingdao Rolled Glass Co., Ltd. (QRG)	TG Donghai Glass Co., Ltd. (DHG)
250,068 M2	260,343 M2	300,448 M2	429,126 M2	398,096 M2
1 Furnace 140,000 mt/y	1 Furnace 200,000 mt/y	1 Furnace 180,000 mt/y	1 Furnace 150,000 mt/y	1 Furnace 400,000 mt/y

| | | | | |
| --- | --- | --- | --- | --- |
| TG Xianyang Glass Co., Ltd. (TXY) | TG Changjiang Glass Co., Ltd. (CFG) TG Kunshan Glass Co., Ltd. (TKG) | TG Anhui Glass Co., Ltd. (TAH) | TG Chengdu Glass Co., Ltd (CDG) | TG Huanan Glass Co., Ltd. ( HNG) |
| 452,703 M2 | 404,770 M2 | 572,643 M2 | 452,027 M2 | 364,907 M2 |
| 1 Furnace 438,000 mt/y | 3 Furnace 602,000 mt/y | 1 Furnace 438,000 mt/y | 2 Furnace 547,500 mt/y | 1 Furnace 328,500 mt/y |

天津廠

Production Facilities - Low-E Glass

Taiwan Changpin Factory (TC)	TG Tianjin Glass Co., Ltd. (TJG)	TG Xianyang Glass Co., Ltd. (TXY)	TG Changjiang Glass Co., Ltd. (CFG)
272,480 M2	300,448 M2	452,703 M2	404,770 M2
1 Line 4,000,000 m2/y	1 Line 4,000,000 m2/y	1 Line 4,000,000 m2/y	1 Line 4,000,000 m2/y

| | | | |
| --- | --- | --- | --- |
| TG Taichang Architectural Glass Co., LTd. (TTAR) | TG Wuhan Architectural Glass Co., Ltd. (TWAR) | TG Chengdu Glass Co., Ltd (CDG) | TG Huanan Glass Co., Ltd. ( HNG) |
| 199,525 M2 | 222,000 M2 | 452,027 M2 | 364,907 M2 |
| 1 Line 4,000,000 m2/y | 1 Line 4,000,000 m2/y | 2 Line 8,000,000 m2/y | 1 Line 4,000,000 m2/y |

Production Facilities – ?Fiberglass Reinforced / Fiberglass Fabric

Taiwan Taoyuan Factory (TT)	Taiwan Lukang Factory (TL)	Taichia Glass Fiber Co., Ltd. (TGF)	Taichia Chengdu Glass Fiber Co., Ltd. (TCD)
181,181 M2	260,343 M2	323,539 M2	362,668 M2
2 FRP Fiberglass Fabric 72,000mt/y	2 Electronic Grade FRP Fiberglass Fabric 25,000 mt/y	3 Electronic Grade FRP Fiberglass Fabric 30,000 mt/y	1 Electronic Grade FRP Fiberglass Fabric30,000 mt/y

Production Facilities – ?Container & Tableware / Ultra-Thin Glass / ?Photovoltaic Glass / Automotive Glass

Container & Tableware	Ultra-Thin Glass	Photovoltaic Glass
Taiwan Hsinchu Factory (TS)	Taiwan Taichung Factory (TF-5)	TG Fujian Photovoltaic Glass Co., Ltd. (FPG)	TG Yueda Solar Mirror Co., Ltd. (TYSM)
129,090 M2	250,068 M2	388,822 M2	266,400 M2
5 Container ：170,000 mt/y	1 Ultra-Thin Glass 15,000 mt/y	1 Photovoltaic Glass 219,000 mt/y	Solar Mirror Glass 72,000 mt/y
2 Tableware & Kitchenware：10,000 mt/y

Automotive Glass

| Taiwan Autoglass Ind. Corp. (TAG) | TG Yueda Autoglass Co., Ltd. (TYAU) |
| --- | --- |
| 250,068 M2 | 132,755 M2 |
| 1 Automotive Glass 250,000 units | 4 Automotive Glass 500,000 units |

Product Introduction

TGI’s main products include flat glass, fiberglass and glassware.

Flat glass is one of the core products of TG. With production plants based in Taiwan and China, TG's major markets reach Taiwan, China, Japan, Korea, North America, Middle East, Australia, Europe, South Africa and so forth.

Product Introduction

Flat Glass
TGI’s flat glass has 100% passed the EU CE, US ANSI, Taiwan CNS and other relevant standards. In the production of the flat silver mirror TGI uses advanced lead-free copper process, to avoid heavy metal pollution. TGI also actively promotes the hot-dip process to strengthen glass, even if broken it will become small pieces to reduce harm. Laminated Glass has the PVB interlayer withstands penetration from impact. Even if the glass cracks, splinters will adhere to the interlayer and not scatter. In comparison with other kinds of glass, laminated glass has much higher strength to resist shock, burglary, burst and bullets. Cladding, coating, vacuum and other energy-saving glass has more excellent thermal insulation so it can reduce the heat exchange of indoor and outdoor to save air conditioning usage, and indirectly reduce greenhouse gas emissions.

Product Introduction

Green Product - Flat Glass
The new generation energy-saving Low-E glass products can effectively block the radiation from sunlight while allowing most sunlight to enter, which solves the problem of lighting and heat insulation. This product also significantly reduces energy consumption from air conditioners. TGI’s Low-E glass products are in compliance with CNS12681 standard and certified with ISO 9001 standard and IGCC. Currently the product has been vastly used in buildings.

TGI actively promotes the green building concept. The Low-E Glass can reduce 30% energy consumption of air-conditioning, and Low-E vacuum energy-saving glass insulation performance is 4-6 times of ordinary glass chip. The energy-saving products can better conserve energy than other industrial products. Therefore energy-saving buildings will become a key to the energy conservation energy of the country.

Product Introduction

Fiberglass
Our Fiberglass Department actively promotes the application of fiberglass in daily life products. Compared to metal supporters, fiberglass has better resistance to corrosion and elements. Fiberglass is low-cost, more durable and has great a strength/weight ratio. Different types of fiberglass, based on their structures and features, are extensively used in thermal insulation, heat insulation, fireproof material and reinforcement.

TG’s fiberglass products all meet RoHS and REACH requirements. For food contact products, a total of 4 meet US FDA standards; 8 meet EU 10/2011 regulation and have Germany’s BfR approval; 2 meet France’s requirements for drinking water (CAS). The quality of our products meets CNS national standards. We print the CNS logos on labels according to different customer requirements. The packaging labels of fiberglass fabric and fiberglass yarn are marked with RoHS compliance logos.

Product Introduction

Glass container, tableware, and kitchenware
Glass containers, with excellent transparency, showcase the real color of anything inside the container. They also have the advantages of easy sealing and flavor preservation. Furthermore, glass containers can be heated up gradually without deforming. TG’s glass containers come in various shapes. A suitable container can further highlight your product’s texture.

The manufacturing facility of container, tableware and kitchenware has received FSSC 22000 certification. All products meet Taiwan’s Sanitation Standard for Food Utensils, Containers and Packages. TG can also provide products that meet RoHS and REACH standards based on clients’ requests. For our heat-resistant products, all of our baby feeding bottles meet EU’s latest EN 14350 standard. All of our coffee pots come with heat-resistant labeling. TG has established a waste glass recycling factory where waste glass is cleaned and recycled. This company periodically sends samples from this factory to SGS to test for lead content. Due to an increase in export-share, TG has an USD 5,000,000 global product liability insurance covering all the products.

Product Introduction

Green Products – Glassware
TGI began acquiring German NNPB glass-blowing technology in 1983 in order to meet the needs of the market and enhance environmental protection. This technology produces attractive, lightweight bottles of uniform thickness. More recently, TGI has participated in technological cooperation with Germany’s Heye-Glass Group, producing more than 200 million bottles per year. Lightweight bottles are the product of future trends in the glass container market. Besides helping customers cut production costs, lightweight bottles are environmentally friendly, as their production consumes less resources and energy.
Asia’s top quality heat-resistant baby feeding bottle

Starting on June 1, 2011, China banned the baby bottles containing bisphenol A, which is also regulated in countries worldwide. TGI container factory started the production of heat-resistant borosilicate bottles from April of 2013. These bottles have the CTE of 33, which is certified by AGR (American Glass Research) with leading quality in Asia.

Product Introduction

Achievements of Green Production in 2016
| 260 million NTD | In 2016 invested a total of 260 million in the plan to promote environmental policy. |
| --- | --- |
| 190,000 tons | Recycled 190,000 tons of scrap glass in 2016. |
| 67% | Taoyuan Factory recycled 67% of its waste in 2016. |
| -76,416 tons | In 2016 all factories reduced water consumption by 76,416 tons compared to 2015. |
| -1.55% | Total graywater discharge reduced by 1.55% in 2016. |
| 10% | Environmental equipment, pollution handling expense, environmental management system and training expenses increased by 10% compared to 2015. |
| -1,956 GJ | Diesel consumption was 56,120 liters lower than 2015 and the heating value dropped by 1,956GJ. |
| ISO 50001 | The Hsinchu Factory, for better energy management, implemented the ISO 50001 energy management system to maximize its energy efficiency through systematic examinations. |
| 8.99% | Changpin Factory increased its water recycle rate by 8.99% compared to 2015. |

General Operation Situation of 2017

General Operation Situation of 2017

General Operation Situation of 2017

Situation and Development of the Market

Flat Glass
China
The contradiction of supply and demand has been mitigated for the flat glass market in China and the price and quantity have increased and have been steady since the successful reduction of flat glass supply in China and the devaluation of RMB from the end of 2016 to the beginning of 2017 increased the exportation of flat glass in China. In addition, the profit of the Company has had obvious improvement due to the benefit of steady material and fuel cost.
The increase of fuel and soda ash price and the elimination of capacity due to environmental crack down in 2017 can support the price of glass so the profit is stable. The forecast for flat glass price fluctuation in 4th quarter of 2017 and 2018 will be slight due to the demand for renovation of old houses although the Property Curbing policy is still undergoing in China.

Taiwan
Taiwan Glass Ind. Corp. is the only sizable glass manufacturer in Taiwan with the only Coating Production Line for architecture in Taiwan. It introduced the vacuum sputtering coating equipment and technology of Von Ardenne to produce high effect energy-saving glass with high transparency and low heat transmission to apply to green buildings, being the leader of the market in Taiwan.

Situation and Development of the Market

Flat Glass
The sales volume of flat glass in 2017 reached a plateau due to the decreased real estate transaction. The Company strives for government infrastructure, private construction projects, and orders from malls. Taiwan Glass Ind. Corp. has the most advanced production technology, on-site production advantages and geographic convenience to meet the demands of the architecture market. It can assist designers and clients to plan the needs on glass types, colors and energy-saving to reach the goal of aesthetic appearance and design quality. The sales volume of flat glass may be promoted in 2018 if the economic environment improves, the business of construction companies are increased and the public has aspiration to buy houses.

To sum up, the flat glass production capacity of 2018 is approximately equal to the production capacity of 2017. There is no plan for expansion. The quality of flat glass produced by Taiwan Glass Ind. Corp. is good enough to meet the demands on market changes for secondary processing. Taiwan Glass Ind. Corp. develops its market steadily by providing clients with excellent products and quality service, building clients’ trust in the products and the Company.

Situation and Development of the Market

Fiberglass Reinforced
Fiberglass reinforced is a replacement material for metal, widely applied to architecture, shipbuilding, chemical piping, automobile, aviation and wind power generation. Its applied fields are expanding due to the large market around the world, especially with the high demand from the emerging countries such as India and Southeast Asia.

In recent years, the application of thermoplastic products is growing fast under the rising demand for environmental protection. The thermoplastic fiberglass is mature enough to sell to European, American and Japanese clients. The Company can develop high-end to apply to resin, 6.5 μm fiberglass to apply to special filter and battery separator, 1.5mm chopped strand to apply to motor component, and flat fiberglass to apply to the thin case of electronic products. On the market, the demand is higher than supply.

The Company will keep striving to develop high value added products to break away from low-price competition, and continue to increase capacity of flat fiberglass, develop low dielectric and high strength fiberglass to meet the market for electronic grade thermoplastic fiberglass.

Situation and Development of the Market

Fiberglass Fabric
Taiwan Glass Group’s capacity of fiberglass fabric is ranked top two among the world, being the largest supplier on the market. The third production facility in Bengbu of China will start production in the fourth quarter of 2018 to meet growing market demand. The Company is establishing new production capacity to service clients that are expanding geographically, and to stay close to clients to providing the fastest service.

The high-end field of fiberglass fabric is mainly divided into mobile devices and automotive market with high demand for ultra thin fabric and high reliability. For example, the growth of the automotive market is over 15% per year during the past three years. It is predicted to continue to expand in the future. In the market of mobile devices, the Company will keep its leader position to support the development of fiberglass fabric.

The electronic devices and equipment are developed toward high-speed and high-frequency such as 5G devices, basic construction and high-speed automotive receiving equipment. Taiwan Glass Ind. Corp. has the abilities to develop and scale up production for future products, and to meet the demands of the future market and maintain its leading advantage in the industry.

Notes:

Situation and Development of the Market

Glass Container
The Dept. of Glassware was set up decades ago and has started to actively develop the market of export sales since 2007. In recent years, the Company confronted the competition of alternative packing materials. PET and carton have the advantages of lightweight, low-priced, and flexible in design, however, the glass packing material being irreplaceable for high-priced refrigerated beverage, beer and wine. The Company has lightweight bottle technology to reduce clients’ production costs, and its experienced technology can lower the limitation of product design. Taiwan Glass Ind. Corp. continues to popularize the environmental aspect to clients by developing glass packing material.

Moreover, the Company invested in equipment for producing heat-resistant bottle in 2003, which is only the third one in the world. After introducing and promoting to clients for years, the quality and technology are accepted by international famous brand companies supplied to European laboratory equipment and glass feeding bottles in Asia.

The company continues to improve the automated inspection equipment and employee training, and passed all food safety regulations certifications. It strives to maintain clients in niche market, avoid the threat of low-price competition, and move toward the B2C market by boosting the development of high value added products.

Notes:

Q&A

Thanks for your attention.
Have a great day.