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

2022 is a year full of challenges. The outbreak of Russia's war on Ukraine in the first quarter led to rising prices of energy sources, such as crude oil, natural gas, and coal, and in turn resulted in increasing prices of petrochemical products. FPC's consolidated revenue and profit before tax in the first half of the year both hit record highs compared with the same period in previous years. However, in the second half of the year, due to high global inflation rates and interest rate hikes in the United States and Europe, there was a decline in production and consumption activities, resulting in a global economic recession. This has had an inevitable impact on the petrochemical industry as well. Not only did demand suffer significantly, but product prices also dropped sharply, driving down profit margins, which led to a downturn in the petrochemical market in the second half of the year, making it a sharp contrast to the market boom in the first half of the year. Despite the challenging circumstances, all FPC employees continued to work hard together and deliver exceptional results, displaying perseverance and resilience. Although the annual operational performance of FPC declined compared with 2021, we were still able to maintain stable profit growth.

In response to the challenges of drastic changes in the international political and economic environment, supply chain bottlenecks, and declining demand for petrochemical products, with its sympathetic and forward-looking approach and years of experience in the research and development of technology and production, FPC has partnered with downstream partners to develop functional shoe materials and apparel materials that are made of fully recycled, lightweight, antibacterial, and natural materials, including fully recycled EVA foam shoe materials, carbon fiber safety shoes, all PP material cold-resistant clothing, etc., which can also be widely used in industrial operations, medical fields, consumer goods, and sports. We aim to achieve the goal of maintaining human health and improving the quality of life while increasing the added value of products and sales volume.

For almost 70 years, FPC has always adhered to the two founders' philosophy of “sustainable operation” and “aiming at the sovereign good”. We not only keep improving our operations but also strive to demonstrate our care and support for employees. In addition to being included in the "Taiwan High Compensation 100 Index", "Taiwan Employment Creation 99 Index", and constituent stock of the "TWSE Corporate Governance 100 Index" by the Taiwan Stock Exchange, FPC has also maintained stable profit growth. Since the Asian financial crisis, we have raised employee salaries year after year, so as to share our achievements with our hardworking and dedicated employees as well as fulfill our role in supporting thousands of families. In 2022, we started offering financial incentives for giving birth, including a childbirth allowance of NT$20,000 and a monthly childcare allowance of NT$2,000, so as to share the joy of childbirth with novice parents and reduce their financial burden of childcare. Meanwhile, in response to government policies, a subsidy of NT$10,000 to NT$16,000 has been added for the purchase of (replacement with) new electric motorcycles to promote the use of electric vehicles for work, in an effort to contribute to a sustainable environment.

FPC has been committed to creating an excellent living environment and a better and sustainable future for the Earth. As of 2022, we invested a total of NT$28 billion in pollution prevention, energy conservation and waste reduction, greenhouse gas (GHG) reduction, and industrial safety and fire protection, achieving much greater results in the treatment and emissions of pollutants than the control standards set forth by the government. In 2022, FPC not only had zero fines for industrial safety and environmental protection but also was repeatedly awarded by government agencies. In addition to being awarded the Outstanding Green Procurement Unit by the Environmental Protection Administration and by the Department of Environmental Protection of Taipei City Government and the Environmental Protection Bureau Kaohsiung City Government, Mailiao ECH Plant and NBA Plant were honored with the Excellent Occupational Safety and Health Department award by the Yunlin County Government. Among them, Mailiao ECH Plant was specially honored with the Five-Star Award for winning for three consecutive years, showing FPC' commitment to workplace safety and health.

In terms of greenhouse gas reduction, FPC’s carbon reduction strategy passed the review by the Science-Based Reduction Target Initiative (SBTi) in December 2022. The greenhouse gas (Scope 1 and 2) emissions in 2021 have been verified by a third-party, with a confirmed total of 8.604 million tons, representing a decrease of 0.4% compared with the 2022 absolute reduction target of 31,000 tons. To improve reduction and continue to promote water and energy conservation, in 2022 alone, we conserved 3,789 tons of water per day and reduced an additional 136 thousand tons of GHG emissions per year. There are 1,179 projects that are continuously carried out and it is estimated that the daily consumption of water will save another 8,202 tons of water, and the annual GHG emissions will be reduced by another 389 thousand tons. According to the 2022 assessment results announced by the Carbon Disclosure Project (CDP), an international environmental assessment index, FPC was given an A- rating in both climate change assessment and water resource assessment and ranked among the best for internationally renowned chemical companies in consecutive years. Such performance has confirmed FPC's significant results in energy conservation, emission reduction, and circular economy in response to climate change.

To implement industrial safety management, prevent occupational disasters, and protect labor safety and health, in addition to continuously promoting the inspection of process equipment, implementing standard operating procedures (SOP), management of change (MOC), and process hazard analysis (PHA), and strengthening the inspection of machinery and equipment for improvement, mobile cameras also have been installed in recent years at the domestic and foreign factory construction sites to strengthen the control of work progress and assist supervisors and contractors in proper industrial safety management. Furthermore, a construction site safety image recognition system has been developed to set up electronic fences using AI and image recognition technology. It has been applied to personnel control at construction sites, safety belt warning, and high-risk area management to ensure 24-hour monitoring, prevent occupational accidents, and establish a friendly and healthy workplace.

Looking ahead to a new year, in view of the global ESG transformation, FPC will deepen corporate governance, integrate sustainable values into various business strategies, and work towards the United Nations Sustainable Development Goals (SDGs). Also, in response to the post-pandemic trends of health care, technological innovation, and economic development, we are committed to research and development of environmentally friendly and medical-grade products, such as fully recycled plastics, anti-adhesive composite rubber particles, biodegradable and green plastics, so as to accelerate product transformation and create multiple values. Furthermore, we will continue to promote strategies such as low-carbon energy transformation, energy conservation and carbon reduction, circular economy, and use of renewable energy, strengthen the risk control of climate change, complete the carbon footprint inventory of major products, and collaborate with upstream and downstream supply chain partners to promote ESG transformation, so as to ensure we are moving towards the 2050 Carbon Neutrality goal and fulfilling our sustainable commitment.

Last but not least, we will further deepen AI development and research, strengthen industry-academia-research collaboration, seek forward-looking technology transfer or cooperative development, and create a new blueprint for future development. We look forward to strengthening FPC's business resilience through innovative and adaptable business strategies and making full preparation for the next wave of petrochemical industry growth, so that we can continue to break through difficulties in the downturn and maintain stable profit growth. As a good corporate citizen, we will contribute our best efforts to create a sustainable future and work towards the common good of society.