Greetings to all our partners who have supported us throughout in the development of FPC and cared for its growth.

In 2018, the global economic market was in a turmoil. The strong economic growth momentum in the first three quarters led to an increase in demand for petrochemical products. With the Organization of Petroleum Exporting Countries (OPEC) and Russia reducing their oil production, the international crude oil prices increased sharply by 24%. The global automotive, construction, e-commerce, and home appliances industries continued to boom, driving the demand for alumina, paper, home appliances, and epoxy resin. The production was reduced by our peers due to the annual maintenance, equipment malfunction, or environmental protection issues, so there was a decrease in market supply, which pushed up the prices of our caustic soda, acrylonitrile (AN), methyl methacrylate (MMA), and epichlorohydrin (ECH) products, further widening our spreads. However, in the fourth quarter, due to the market uncertainties brought about by the China-US trade war, the global economy and international trade went down. To boost the growth of the U.S. economy, and with the intention to stop the oil price increment, President Trump substantially increased crude oil production, causing crude oil prices to collapse by nearly 40%, along with the sharp decrease in ethylene, propylene, and petrochemical products. Downstream customer purchases turned conservative, resulting in a decrease in sales volume and spreads.

Overall, we achieved the annual capacity of 42,000 tons at the polypropylene (PP) plant in Ningbo and improved the equipment safety management to maintain the stable production. The operating rate in 2018 was better than that in 2017. We also distributed markets and differentiated sales of products with high unit prices, resulting in consolidated revenue of NT$230,370,000,000, an increase of 11% compared to 2017. Together with cash dividends of Nan Ya Plastics Corp., Formosa Chemicals & Fibre Corp., and Nan Ya Technology Corp. and income of Formosa Petrochemical Corp., Formosa Plastics Corporation, U.S.A., and Formosa Sumco Technology Corp., consolidated income before tax reached NT$57,020,000,000, hitting a record high over the past 64 years since its establishment.This remarkable success was based on the support and encouragement from all our shareholders, colleagues, customers, and partners.

Looking back at 2018, we continuously improved our profitability as a builder of a prosperous economy in pursuit of sustainable development with our stakeholders. In addition, we also adopted the UN's Sustainable Development Goals (SDGs) as the long-term goal of sustainability strategy while pursuing sustainable development, happy talent, a safe and healthy workplace, and shared development. In 2018, we continuously ranked in TWSE Taiwan High Compensation 100 Index, Taiwan Employment 99 Index, and Corporate Governance 100 Index; besides, nine departments and five employees received commendation and recognition from the competent authorities in terms of occupational safety and health, energy conservation, carbon reduction across departments, and workplace safety and health. As our efforts have been widely recognized, we are more confident of continuously improving the sustainable development and fulfilling our commitment to stakeholders in the future.

Furthermore, we are committed to creating an excellent living environment and better and sustainable future for the Earth. As of 2018, we have invested a total of NT$22.7 billion in pollution prevention, energy conservation and carbon reduction, GHG reduction, and occupational safety and fire protection. For water and energy conservation and GHG reduction, a total of 460 improvements were made in 2018, which conserved 5,340 tons of water per day and reduced 73,826 tons of GHG emissions per year. Besides, 345 ongoing improvements will be completed, which are estimated to further conserve 3,375 tons of water per day and reduce 168,124 tons of GHG emissions per year.To further reduce the environmental impacts caused by the plant operations, we strengthened the control over leaks of equipment components, monitored air quality instantly through the Fourier-transform infrared spectroscopy (FTIR), and improved the white smoke elimination project at the Renwu and Linyuan Utility Plants; in addition, we have established a designated team to be in charge of wastewater reduction and targeted zero wastewater emissions.

As of 2018, the seven charitable trust funds and foundations established by the two founders of Formosa Plastics Group (FPG) have invested NT$55.4 billion in social welfare organizations to benefit education, medical services, elderly welfare, inmate support, women and children’s welfare, sports and culture, and people with disabilities. Additionally, in line with the Kaohsiung City Government's policy of developing urban tourism while preserving the historic relics of Taiwan's petrochemical industry, 13 buildings, including the two founders’ office in Kaohsiung Plant, the birthplace of FPG, have been registered as historic buildings by the Kaohsiung City Government. We, along with Nan Ya Plastics Corp., Formosa Chemicals & Fibre Corp., and Formosa Petrochemical Corp., have invested in a foundation to establish the Wang Yung-Ching and Wang Yung-Tsai Park at the 2.5-hectare site of the Kaohsiung Plant as a tourist attraction featuring historic relics, entertainment, and education, which can motivate the economic development of Kaohsiung City.

Looking forward to 2019, in the face of global climate change and environmental issues, we, as the leader in Taiwan's petrochemical industry, will strive to achieve a breakthrough based on the business philosophy of “Diligence, Perseverance, Frugality and Trustworthiness; Aiming at the Sovereign Good; Perpetual Business Operation; Dedication to the Society.” In addition to improving operational performance, given the fact that artificial intelligence (AI) is the key to future growth and competitiveness, we will expand the AI applications in the production and sale optimization, distillation tower energy conservation, smart monitoring system maintenance, automated optical inspection (AOI), meter digitization, and defect identification to avoid occupational disasters, ensure the smooth production, improve yield, and reduce energy and material consumption and costs; in addition, we expect to enhance our long-term competitiveness by introducing quick reproduction across plants. Meanwhile, we will improve our R&D capacity for forward-looking products and recyclable and biodegradable plastics and promote circular economy and social responsibility initiatives in the hope of continuously creating value for our stakeholders and becoming a benchmark enterprise that is committed to environmental protection, social prosperity, and economic development on the basis of sustainable management.