Stock Code 1802 TAIWAN GLASS IND CORP Spokesperson

  • Slides: 28
Download presentation
Stock Code: 1802 TAIWAN GLASS IND. CORP. Spokesperson: Lin, C M GM, Finance Dept.

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). 2019 -11 -22 1

* Ø This brief and the related information issued meanwhile were obtained from internal

* Ø 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. � Ø 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. 2

* Ø Introduction of Taiwan Glass Group Ø Production Facilities Ø Product Introduction Ø

* Ø Introduction of Taiwan Glass Group Ø Production Facilities Ø Product Introduction Ø General Operation Situation of 2019 Ø Situation and Development of the Market Ø Q&A 3

* Founded in 1964 Capital NTD$29. 08 billion Chairman Number of Employee Date of

* Founded in 1964 Capital NTD$29. 08 billion Chairman Number of Employee Date of Listing Main Products Mr. Lin, Por Fong 14, 402 (until 2019. 9. 30) Listed in 1973 Flat Glass Fiberglass Glassware 4

* TGI 19 th Directors / 2 nd Audit Committee (Number from left side

* TGI 19 th Directors / 2 nd Audit Committee (Number from left side to right side) Lin, P F Front Row 5 Lin, P S Front Row 6 Lin, P C Front Row 7 Lin, F C Front Row 4 Chen, C C Front Row 3 Hwang, T Y Front Row 2 Peng, C H Front Row 9 Lim, H T Front Row 1 Hsu, L L Front Row 8 Lin, C H Back Row 4 Su, Y T Back Row 3 Lin, C Y Back Row 5 Lin, C M Back Row 6 Chen, C C Back Row 2 Tsai, T M Back Row 1 5

* Sustainable Development Strategy Management Policy The founder of TGI adhered to the philosophy

* Sustainable Development Strategy Management Policy The founder of TGI adhered to the philosophy of building an autonomous high -quality glass industry in Taiwan. Under the joint efforts of partners in the construction industry, the company strives to create a solid foundation of professional manufacturing for the glass industry. Since TGI's establishment, Importance we have been committed to providing great quality, reasonable prices, perfect services, customer satisfaction, to reward shareholders, care for employees, and contribute to society. To ensure TGI's competitiveness in the ever-changing economy, we strive to cultivate talents, develop high-quality products, enhance the business management, strengthen the layout and marketing services, and implement the Policy and economic, environmental, labor and product responsibility aspects of corporate Commitment social responsibilities, so that enterprises and society can progress and prosper together, and achieve the goal of robust financial and business development and sustainable operation. TGI established the Corporate Social Responsibility Committee which focuses on ESG planning. We continue to introduce new technologies and expand Action Method production operations, optimize product and operation scale to enhance TGI sustainable development. 1. Reduce operating costs. Goals and 2. Optimize and improve the production line structure. 6 Targets 3. Strengthen distribution channels and services.

* Sustainable Development Strategy Management Policy Objective Evaluation Flat Glass Update automation technology equipment,

* Sustainable Development Strategy Management Policy Objective Evaluation Flat Glass Update automation technology equipment, increase the sales of high-grade building materials such as Low-E energy-saving glass and Super Clear Glass, and increase the added value of products. Make full use of the layout to flexibly allocate production capacity and inventory to achieve the goal of reducing operating costs and strengthening distribution channels. Fiberglass The technology and quality of fiberglass products have always been the core competitiveness of the company, among which the production capacity of electronic grade fiberglass fabric accounts for 16% of the global market. TGI has successfully developed products with leading global technology, in line with applications of emerging industries such as advanced mobile devices, automotive electronics, and Internet of Things, continue to seize market trends and supply the high-end product. We also cooperate with Ownes Corning, the global leader in the production of fiberglass, to renew the technology license and sign the technology licensing and manufacturing supply agreement. With the agreement signed, TGI obtained the world's most advanced fiberglass formulation and production technology. TGI optimizes the structure of production lines and increases the annual production capacity of 60, 000 tons to 80, 000 tons, providing customers with higher performance and more environmentally friendly products, improving the quality of composite products of domestic manufacturers and increasing the overall competitiveness of the market. Container Glass The domestic and international demand for container glass products remains stable. The one-piece bottle made of α 33 borosilicate heat-resistant glass has a global market share of 40%, can withstand an instantaneous temperature difference of 150℃, and has excellent quality and safety. TGI has entered the global leading brand supply chain. We continue to strengthen the traditional sales channels of the food and beverage container products, and selected products are sold on the B 2 C e-commerce platform, which is closer to the consumer market. In order to establish product characteristics and market segmentation, TGI invited the Japanese industrial design master Naoto Fukasawa to design the brand identification and products, and the product has been launched. 7

* Taiwan Taichung Factory (TF) Taiwan Lukang Flat Glass Factory (TF-4) TG Qingdao Glass

* Taiwan Taichung Factory (TF) Taiwan Lukang Flat Glass Factory (TF-4) TG Qingdao Glass Co. , Ltd. (QFG) Qingdao Rolled Glass Co. , Ltd. (QRG) TG Changjiang Glass Co. , Ltd. (CFG) TG Chengdu Glass Co. , Ltd. (CDG) 250, 068 M 2 260, 343 M 2 429, 126 M 2 404, 770 M 2 452, 027 M 2 1 Furnace 140, 000 mt/y 1 Furnace 200, 000 mt/y 1 Furnace 145, 000 mt/y 2 Furnaces 383, 250 mt/y 2 Furnaces 547, 500 mt/y TG Huanan Glass Co. , Ltd. ( HNG) TG Donghai Glass Co. , Ltd. (DHG) TG Tianjin Glass Co. , Ltd. (TJG) TG Xianyang Glass Co. , Ltd. (TXY) TG Anhui Glass Co. , Ltd. (TAH) 364, 907 M 2 398, 096 M 2 300, 448 M 2 452, 703 M 2 572, 643 M 2 1 Furnace 328, 500 mt/y 2 Furnaces 400, 000 mt/y 1 Furnace 180, 000 mt/y 1 Furnace 438, 000 mt/y 天津廠 8

* Taiwan Changpin Factory (TC) TG Changjiang Glass Co. , Ltd. (CFG) TG Chengdu

* Taiwan Changpin Factory (TC) TG Changjiang Glass Co. , Ltd. (CFG) TG Chengdu Glass Co. , Ltd (CDG) TG Huanan Glass Co. , Ltd. ( HNG) 272, 480 M 2 404, 770 M 2 452, 027 M 2 364, 907 M 2 1 Line 4, 000, 000 m 2/y 2 Lines 8, 000 m 2/y 1 Line 4, 000 m 2/y TG Tianjin Glass Co. , Ltd. (TJG) TG Xianyang Glass Co. , Ltd. (TXY) TG Taichang Architectural Glass Co. , LTd. (TTAR) TG Wuhan Architectural Glass Co. , Ltd. (TWAR) 300, 448 M 2 452, 703 M 2 199, 525 M 2 222, 000 M 2 1 Line 4, 000 m 2/y 1 Line 5, 000, 000 m 2/y 1 Line 4, 000 m 2/y 9

* Taiwan Taoyuan Factory (TT) Taiwan Lukang Factory (TL) Taichia Glass Fiber Co. ,

* Taiwan Taoyuan Factory (TT) Taiwan Lukang Factory (TL) Taichia Glass Fiber Co. , Ltd. (TGF) Taichia Chengdu Glass Fiber Co. , Ltd. (TCD) 181, 181 M 2 260, 343 M 2 323, 539 M 2 362, 668 M 2 2 FRP Fiberglass Fabric 75, 000 mt/y 2 Electronic Grade FRP Fiberglass Fabric 25, 000 mt/y 4 Electronic Grade FRP Fiberglass Fabric 56, 000 mt/y 1 Electronic Grade FRP Fiberglass Fabric 30, 000 mt/y 370, 668 M 2 1 Electronic Grade FRP Fiberglass Fabric 35, 000 mt/y 10

* Container & Tableware Ultra-Thin Glass Taiwan Hsinchu Factory (TS) Taiwan Taichung Factory (TF

* Container & Tableware Ultra-Thin 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 M 2 250, 068 M 2 388, 822 M 2 266, 400 M 2 6 Container : 173, 600 mt/y 1 Ultra-Thin Glass 33, 580 mt/y 1 Photovoltaic Glass Solar Mirror Glass 1 Tableware & Kitchenware: 3, 000 mt/y Photovoltaic Glass Automotive Glass Taiwan Autoglass Ind. Corp. (TAGC) TG Yueda Autoglass Co. , Ltd. (TYAU) 250, 068 M 2 132, 755 M 2 1 Automotive Glass 250, 000 units 4 Automotive Glass 600, 000 units 11

* Division Product Category Flat Glass Division ● Clear Float Glass ● Tempered Glass

* Division Product Category Flat Glass Division ● Clear Float Glass ● Tempered Glass ● Tinted Float Glass ● Ceramic Silkscreen/Spandrel Glass ● Rolled Glass ● Heat Strengthened Glass ● Low-E Glass ● Laminated Glass/Sound Control Laminated Glass ● Low-E Vacuum Glass ● Bent Glass/Bent Tempered Glass ● Reflective Glass ● Mirror Glass Fiber Glass Business Container, Tableware & Kitchenware New Material Business Solar Business Automotive Glass Business ● Fiberglass Yarn ● Glass Yarn ● Fiberglass Fabric ● Glass Container ● Tableware ● Kitchenware ● Tableware/Kitchenware Glass Processing ● Private Label Products ● Ultra-Thin Glass ● Super Clear Glass ● Low Iron Photovoltaic Cover Glass ● Auto Glass 12

* TGI Group draws on world-class technology and equipment suppliers and accumulates own R&D

* TGI Group draws on world-class technology and equipment suppliers and accumulates own R&D experience to make efforts in technology improvement and new product research and development. In addition to obtaining a number of quality and environmental certificates, in response to global green energy issues, TGI reduces pollution from the production process to mitigate environmental impact and devotes to develop environmental and energy-saving related products. 13

* Flat Glass TGI’s flat glass has 100% passed the EU CE, US ANSI,

* 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. 14

* Green Product - Flat Glass The new generation energy-saving Low-E glass products can

* 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 CNS 12681 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. 15

* Fiberglass Our Fiberglass Department actively promotes the application of fiberglass in daily life

* 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 Ro. HS 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 Bf. R 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 Ro. HS compliance logos. 16

* Glass container, tableware, and kitchenware Glass containers, with excellent transparency, showcase the real

* 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. TGI’s glass containers come in various shapes. A suitable container can further highlight your product’s texture. The manufacturing facility of the container, tableware, and kitchenware has received FSSC 22000 certification; moreover, it has obtained ISO 50001 in 2017. All products meet Taiwan’s Sanitation Standard for Food Utensils, Containers and Packages. TGI can also provide products that meet Ro. HS 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. TGI 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, TGI has a USD 5, 000 global product liability insurance covering all the products. 17

* Green Products – Glassware TGI began acquiring German NNPB glass-blowing technology in 1983

* 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 fewer resources and energy. Advantages of Lightweight Bottle • • Conserves raw materials use. It has the same strength despite a thinner bottle wall. Reduces energy consumption. Reduces clients’production costs. Glass containers are 100% recyclable and will not destroy the earth’s ecological environment. Example: 1 -liter liqueur bottle originally weighed 540 g. After the implementation of the NNPB technology, the bottle weighs 480 g, 12. 5% lighter. 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 18 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.

* Private Label Since its establishment in 1964, Taiwan Glass Group has been striving

* Private Label Since its establishment in 1964, Taiwan Glass Group has been striving to make Taiwan a better living environment and develop high-quality glass products. In 2014, Taiwan Glass Group and Naoto Fukasawa, the internationally renowned product designer, started a private label brand TG, a local brand with global vision as well as the warmth and friendliness of Taiwan. The first series of products, including water containers, coffee pots, wine glasses, tableware and furniture, are expected to be launched. 19

* Ultra-Thin Glass The TF 5 furnace in Taichung Factory is a newly established

* Ultra-Thin Glass The TF 5 furnace in Taichung Factory is a newly established production line for Ultra-thin touch glass. Introducing the installations of Computerized Automated Production Management System, cleanroom and mechanical arms for collecting glass panes, this line started production in November 2014 with mass production for 0. 33~1. 1 mm glass. The 0. 55~0. 11 glass could be used for ITO touch panels and the 0. 33~0. 4 mm glass could be used as screen protector for 3 C products. All of the products undergo strict inspections before shipment. The high-quality product is able to provide for major electronic manufacturers at home and abroad to produce consumer electronic goods. 20

* 21

* 21

* 22

* 22

* 23

* 23

* Flat Glass China In 2018, due to the strict control on the supply

* Flat Glass China In 2018, due to the strict control on the supply of the flat glass, market equilibrium was achieved. Thus, economic benefits and the annual profit increased significantly compared to the previous period. In the first half of 2019, glass production lines resumed production, thus affecting the supply and putting factories under the pressure of destocking. Hence, the unit price fell and the production costs of capacity planning, raw materials and fuels increased. All in all, the gross margin in the first half of 2019 declined. The second half of 2019 is considered the peak season, so the pressure of destocking is alleviated. Under the promotion of new real estate projects and energy-saving renovation of existing buildings, processed glass used in the construction industry maintained steady growth, and the sales volume and price increased significantly when compared with the first half of the year. In order to maintain stable development of the glass industry, TGI will continue to promote structural reforms in the supply side, prohibit the expansion of production capacity, implement capacity replacement or reduction, and facilitate the withdrawal of unsustainable production capacity from the market in accordance with regulations to balance the supply and demand in the market. However, there are still market uncertainties. For example, the outlook for US-China trade war still remains unclear, and it is difficult to predict what’s to come. Nevertheless, China continues to promote the development of new technologies for safer and more energy-efficient architectural glass. With the increasing amount of processed glass, sales are expected to be maintained. 24

* Taiwan In 2019, the recession in the construction industry has contributed to the

* Taiwan In 2019, the recession in the construction industry has contributed to the increasing number of surplus houses as well as the lower housing starts, which also affects the amount of glass used in the interior industry. Taiwan is a member of WTO, and the cost of manufacturing glass in Taiwan is high, thus making our products no match for cheap imported glass from Southeast Asia and China. Compared to the previous period, the lower sales in the first half of 2019 in Taiwan can be attributed to this. In the future, TGI will strive to improve production efficiency to reduce production costs and take advantage of our strength and convenience in local production. We aim to provide immediate service, including fast delivery of custom samples, products and replacement parts. Through the dealer system and the layout in Taiwan, we aim to achieve comprehensive visibility and market penetration of TGI products. The constant evolution of products and quality prepares us for the competition with foreign products, so that customers have confidence and affirmation in our products. All in all, TGI's production capacity of flat glass in 2019 is expected to decrease when compared to the previous period. In 2020, TGI will not increase production in the flat glass business in Taiwan. The prospect remains unclear due to uncertainties in the market. TGI will develop high value-added products to enter new markets and strengthen our market position with service and product innovation. 25

* Fiberglass Fabric As for the fiberglass business, the production capacity of electronic fiberglass

* Fiberglass Fabric As for the fiberglass business, the production capacity of electronic fiberglass fabric accounted for 16% of the global market. In 2017, the demand for PCB from downstream industries rose strongly, contributing to the slight rise in sales in 2018. TGI is completely self-sufficient from raw materials to production, so TGI still has the edge over other competitors in terms of cost. Taichia Bengbu Fiberglass (TBF) in Anhui Province entered the production phase in March and it achieved mass production in 2 Q 2019, with the annual production capacity of 35, 000 tons, bringing positive impacts to TGI. Nowadays, applications of emerging technologies, Internet of Things, automotive electronics and 5 G industries are still developing, and we strive to win more orders and enter the supply chain of high-end customers. As for FRP, TT and Owens Corning restarted the agreement of technical cooperation last year, equipping TGI with the world's most advanced fiberglass formulation and technology. FRP is expected to start production in Q 4 2019, helping to reduce production costs effectively. Compared to steel, FRP has many advantages such as design, processing and recycling; moreover, it also meets the trend of energy conservation and environmental protection. The fiberglass products manufactured in China and then sold to the US account for less than 3%, and the production can be shifted to Taiwan; thus these products are not affected by the US-China trade war. 26

* Glass Container Taiwan was thought to be benefited from order transfers caused by

* Glass Container Taiwan was thought to be benefited from order transfers caused by US-China trade war. However, in 2019, glassware was not selling as well as expected because the transfers were fewer than we had predicted. Two of TGI’s major OEM products, coffee pots and health pots, faced severe price competition due to the production expansion of the glass industry in China these years, resulting in sluggish sales in the domestic market along with a slight decrease in the overall revenue when compared with the previous period. In July 2019, two production lines of food containers were modified to IS M/C to produce ultra-white container glass, such as high value-added wine bottles and health drink bottles. Currently in the US market, TGI strives to find new customers and develop new products, with more than 30 new moulds having been designed. As for domestic sales, TGI plans to increase orders from government institutions. While at the end of 2018, TGI launched its private label—TG— a brand that has entered the B 2 C market and increased ODM orders. TG manages to achieve full capacity and stable profitability by shifting a part of the capacity to the brand, taking fewer OEM orders, working on brand extension strategies, and by adding value to products. TGI’s private label, TG, has been working with the internationally renowned product designer Naoto Fukasawa. TG has launched 73 kinds of living utensils, and 40 kinds of new products are expected to be launched by the end of 1 Q in 2020. TG has entered the Japanese and Chinese markets, and it will break into the European and American markets to enhance the 27 international visibility of the brand.

Q&A Thanks for your attention. Have a great day. 28

Q&A Thanks for your attention. Have a great day. 28