UPC — Investor Presentation 2018

Nov 13, 2018

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UPC Technology Corporation Investor Conference 13 November, 2018

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CONTENT

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1. Company Introduction

2. Development Strategy

3. Financial Performance

4. Q & A

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1. UPC Introduction

• Founded ： August 1976

• Chairman ： Matthew F.C. Miau

• President ： Yi-Shao Ko

• Revenue (Y2017) ： NT$50.6 Billion (US$1.64 Billion)

• Number of Employees ： ~2000

• Taiwan Stock Exchange listed (Y1989) ： code 1313

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Our market covers Taiwan, China, Southeast Asia, Northeast Asia,
South Asia, USA, Canada, the Middle East and New Zealand.
> 10,000 customers globally
Specialty Logistics
Chemical Service
Core
Chemicals
3
2018 UPC Technology Corporation Investor Conference
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UPC’s Deployment in Asia

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Zhenjiang, Jiangsu Panjin, Liaoning
Taizhou, Jiangsu
Nanchong, Sichuan UPC Taipei office
Taiwan
China
Zhongshan, Guangdong
Linyuan, Kaohsiung
UPCHK
Zhuhai, Guangdong Kuantan, Malaysia
Malaysia
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Manufacturing/Logistics Center

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Core Business

• Phthalic Anhydride

• Maleic Anhydride

• Fumaric Acid

• PVC Resin

• General Plasticizer  Phthalate

  • DEHP

  • DNOP

  • DINP

  • DIDP

  • DPHP

  • DBP

  • DIBP

• Terephthalate (DOTP)

• Trimellitate

• (TOTM, TNOTM)

• Adipate (DOA)

UPC Business

Specialty Chemical Business

• Specialty Plasticizer

• Hydrogenated (UN899)

• Polymeric (UN600series)  Adipate (DINA, DIDA)  Benzoate (DEGDB)  Maleate (DOM, DBM)  Fumarate (DOF)  Bio-based

  • Sebacate (DOS, DBS)

  • Citrate (ATBC)

  • Epoxide (ESBO)

  • Succinate (UN9429)

• UPR

• Polyester Polyol

• Fatty Ester

• Lubricant Ester

Logistics and Service Business

• Terminal operation

• Tank farm storage

• Warehouse storage

• Transportation

• Import / Export handling service

• Trading

• Engineering

• Energy Service

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The Supply Chain

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Raw UPC
The Supply Chain Application
Material product
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Global #1 PA and Plasticizer supplier

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Note: 1. The production capacity of Plasticizer is on the basis of the DEHP production capacity. 2. The production capacity of Plasticizer and PA includes the volume of captive use .

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2. DEVELOPMENT STRATEGY

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Total capacity of 3410 KTPA in end 2018 Total capacity of 3680 KTPA in end 2019

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Unit: KTPA
2,500
Capacity in end - 2018
Expansion capacity in 2019
2,000 Plasticizer + 120 KTPA
1,500
1,000
PVC + 150 KTPA
500
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The PVC Outlook

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PVC Integration by Feedstock in 2017 (China)
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Source：IHS / UPC (November 2018)

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The PVC Outlook

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• Global demand for PVC is continuously growing and the capacity expansion can not keep up with the growth for demand. IHS report forecasted that the supply for PVC will still be tight.

• Growth for global demand for PVC is 5.3% per year, and for demand in Asia and China is 6.3% per year.

• Demand for PVC in China is about 17.7 million tons per year on 2017. The high pollution and high energy consumption carbide-based PVC plants are strictly limited to add new capacity and force by central Gov. to be phased out in China.

• UPC will continue to expand PVC capacity in China and to increase long-term competitive advantage by vertical integration.

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The Plasticizer Outlook

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2017 Global plasticizer demand distribution

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Global Demand of Plasticizer: 8550KTPA

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Source：UPC (November 2018)

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The Plasticizer Outlook

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• Continues growth of global PVC demand driving the demand of plasticizers to increase.

• World demand for plasticizers is continuously growing at a rate about 3% per year, and the growth for plasticizers in Asia and China is about 6.3% per year.

• In 2017, the total demand for plasticizers in the China market is 4.6 million tons, accounting for 54% of the global market, with a growth rate about 6.3% over the past five years.

• Phthalate plasticizers accounted for 65% of the world demand of plasticizers in 2017. Meanwhile, the demand for non-phthalate plasticizers is growing rapidly, including:

• UN899

• Bio-based plasticizer(incl. ESBO/EFAME…etc.)

• Polymeric Plasticizer.. etc.

• World consumption of non-phthalate plasticizers is forecasted to grow at an average annual rate about 5.8%.

• UPC continuously develop non-phthalate plasticizers and expand the capacity to keep leading position in the plasticizer market.

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3. Financial Performance

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2013 ~ 2018 Q3 Consolidated Revenue

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2012 ~ 2017 Q3 Production and Sales Volume

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2018 Q3 YTD Revenue Breakdown by Products (%)

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6.6
29.3
Unit: Billion (NTD)
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2012~2017 Q3 Net Income after Tax & EPS

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2013 ~ 2018 Capital Expenditures

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Billion (NTD)

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www.upc.com.tw UPC Technology Corporation

THANK YOU

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