The Impact We Make

፬ሰ The Impact We Make

Isaac Newton wrote: “We build too many walls and not enough bridges.” Far Eastern Group has made substantial contributions to Taiwan society through its ideals and professionalism and by providing a method to bridge the gap between the local people and the world. Beginning with a single supple fiber, Far Eastern Group today, has an influence, which is global and connected through infinite miles of fiber optic cables. Far Eastern Group has helped to shape Taiwan’s economy, culture, management concepts, social responsibilities, and entrepreneurship and in the process become a prestigious household name and a model for all Taiwan companies. Winston Churchill wrote: “The further backward you look, the further forward you can see.” For the past sixty years, Far Eastern Group has influenced the Taiwanese people in their daily lives and by transforming yesterday builds the bridges for a better world tomorrow.

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未命名-1 2 2011/8/9 2:10:39 PM THE IMPACT WE MAKE ECONOMY

Ⅰ. 經濟 Economy

For sixty years Far Eastern Group has played an important role in Taiwan’s economic development, contributing in myriad industries and ways to Taiwan’s progress. How did Far Eastern Group become one of the most important business entities in Taiwan? What enabled its expansion from a simple textile factory into a large conglomerate? And what allows a successful integration of Taiwan and mainland China operations to encompass manufacturing including textiles, cement, petrochemicals, to businesses in the shipping, retail, construction, hotel, finance, and telecommunications industries?

ɼ Taipei Metro Towers – Far Eastern Group headquarters 52

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Textiles — the Origin of 60 Years of Glory

wareness of Far Eastern Textile Ltd. cover customer base, product and manufac- (FETL) was limited to garment man- turing processes. “We are sensitive to who ufacturing, however, in its present our customers are and their needs. We work incarnation as Far Eastern New Cen- with leading brands such as Nike and Adidas. turyA Corporation (FENC) the company’s busi- These companies are less affected by economic ness has grown and touches upon all aspects of downturns and therefore we are less affected.” daily life in Taiwan. Furthermore, FENC also collaborates with When the Nationalist Government retreated emerging companies such as Uniqlo from Japan, to Taiwan in 1949, Far Eastern’s textile factory A&F from the United States, and Li-Ning from moved from Shanghai to Banqiao, Taiwan. Dur- China. Hu emphasized that FENC is among the ing that period, daily necessities were scarce and top few suppliers avoiding elimination from key the company provided warmth with such basic accounts. needs as the manufacturing of the “Skyscraper” FENC has a raw materials research advan- brand of knitwear. FENC set many records in tage, giving the company a great deal of flexibil- Taiwan’s textile industry, for example, it was ity in apparel innovation. The product varieties the first to export cotton yarn as well as apparel have shifted from basic knitwear, to fashionable overseas. The Group served as a key generator of sportswear. FENC is now a major supplier of foreign exchange reserves for Taiwan, contribut- China apparel brands, leading China’s apparel ing directly to Taiwan’s economic prosperity. industry into a more streamlined manufacturing In touch with Taiwan’s economic pulse and process. Austin Lee, President of Far Eastern Ap- government initiatives, FENC redirected its parel (Suzhou) Co., Ltd. in China, indicates that business accordingly. When the company suf- the lead time from template preparation to final fered from a raw material shortage, it seized the product can be shortened from one week to one opportunity to expand vertically from upstream day on diverse projects. to downstream. From producing petrochemicals The success of the cross-Strait deployment and fibers to spinning, weaving, dyeing, and re- between Taiwan and China has increased tail, it has created a complete supply chain and FENC’s scale, and brought energy and momen- to this day in Taiwan, only Far Eastern Group tum to the company. Eric Hu believes that a has successfully accomplished this. company needs to grow constantly. “By capacity Johnny Shih, Vice Chairman of FENC, has expansion and talent development, the com- pointed out that the company’s development pany will be able to attract new talent, interna- can currently be divided into three phases. The tional customers and global investors.” first phase focused on quality and quantity of “You can see the true potential of a business mid- to downstream products. In the second by how it handles crisis.” Hu lamented about the phase, the company shifted its focus from tex- first energy crisis back in 1973. In three years, 70 tiles to non-textile applications and producing percent of the downstream textile companies in value-added products such as PET bottles, High Taiwan had closed, and FENC was greatly im- Tenacity Yarn, tire cord and optical film. Petro- pacted as well. But facing the 2008-2009 global chemicals were later developed, to become a economic crisis over 30 years later, FENC had core product offering. The third phase is more the foresight to be cautious with all investment ɼ Apparel manufactured by Far Eastern New Century Corp. (formerly Far Eastern Textile Ltd.) focused towards becoming a leading global sup- projects, and enhanced the management of our plier with high-quality innovative products. financial measures. This shows that the com- According to Eric Hu, Senior Executive Vice pany has the ability to shrug off major impacts President of FENC’s Textile Business Operation of the economic crisis with its abundant experi- Center, “A business needs innovation to move ence and solid tradition of “Sincerity, Diligence, in step with global trends.” Innovation should Thrift and Prudence.”

p50-73(0808).indd 54 2011/8/9 3:03:28 AM ɼ Far Eastern New Century Corp. (formerly Far Eastern Textile Ltd.) and its early printed fabric products hold beautiful memories for the people of Taiwan

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Polyester — a Leading Player in Asia

very morning at 11:00 a.m., facture chemical fiber, the PTA process Far Eastern Textile Ltd. (FETL, takes 15% less in raw materials than the renamed Far Eastern New Cen- DMT process. After assessing the risks tury Corp.) Hsinpu Chemical and potential of the new technology, FiberE Plant senior executives receive a Mr. Hsu promoted PTA as the raw mate- text message listing raw-material prices. rial of choice and 40 years later this new Modeled after the financial industry, re- technology has grown to become the ceiving timely pricing reports help exec- world’s mainstream process. utives prepare and embrace for changes FETL was the first company in Asia to in the market. Regular bi-monthly or as introduce and utilize partially-oriented needed cross-Strait sales meetings are yarn (POY) from Europe. The finished held via video-conference with all top POY skips a draw-twisting step and al- managers in Taiwan and China. These lows direct false-twisting along with ad- are a few examples where harnessing ditional processing steps. Furthermore, the latest technological advances in the spinning speed can reach up to 3,500 communication can be fully utilized to meters per minute, which was thus improve knowledge and efficiency to faster than the original technique. help decision making. FETL prioritizes monitoring market Although FETL has implemented the developments and with careful obser- most cutting-edge concepts and state- vation formulating decisions based on of-the-art technology, it still holds true this analysis. Y.H. Tseng, Senior Execu- to its original values and motto. Com- tive Vice President of the Fiber Business bining in-depth experience with new Operation Center, shares an example of capabilities in decision-making and this. In 2008 FETL acquired Invista Far human resource management, FETL Eastern Petrochemicals Ltd. (chang- changes crisis into opportunity and op- ing its name to Oriental Petrochemical portunity into business success. This (Taiwan) Co., Ltd. (OPTC)), which had foundation provides strong support for been running a long-term deficit. The the company as it strives to get ahead. acquisition decision was based on the In 1971, when Oriental Chemical evaluation that the polyester market was Fiber Corporation commenced opera- moving to the emerging Asian markets; tions, it was already more advanced and would be where research, develop- than its competitors. Raw materials were ment and production would also most differentiated into two types: Purified likely be heavily based. In addition, ɼ Top: Far Eastern New Century Corp. (formerly terephthalic acid (PTA) and Dimethyl OPTC had the capacity to produce one Far Eastern Textile Ltd.) Optical Film Plant terephthalate (DMT). At the time, DMT million tons of PTA per year and would ɼ Bottom: Film produced by Far Eastern New was mainstream in the market, due to thus become the stable raw material Century Corp. (formerly Far Eastern Textile Ltd.) the fact that PTA was difficult to pro- provider for FETL. Just a few months duce lacking the mature technology to after its take over, OPTC had already do so. At the time, only three companies reported a profit by the first quarter of worldwide were able to supply PTA. 2009. Mr. Yu-Ziang Hsu, Far Eastern Through a series of major transforma- Group’s Founder, always focused on tive decisions, FETL has strengthened “using the most advanced technology, its competitive advantages in the market the best equipment, and building plants creating a leading polyester manufac- at the lowest possible cost.” To manu- turer in Asia.

p50-73(0808).indd 56 2011/8/9 3:03:39 AM ɼ Polyester chips produced by Far Eastern New Century Corp. (formerly Far Eastern Textile Ltd.)

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ɼ Asia Cement’s administration building at its Hualien plant, Taiwan

p50-73(0808).indd 58 2011/8/9 3:03:49 AM Cement — the Building Block of Taiwan’s Economy

he construction industry is an en- gine for economic development and the cement business the cor- nerstone of the construction industry.T In the last 50 years, Asia Cement Corporation (ACC) has helped modern- ize Taiwan, promoting prosperity in the society that we now know today. In the 1960s, when Taiwan’s economy started to take flight, the government pushed successively for critical infrastructure construction projects in transportation such as railways, high- ways, airports, and harbors. Far Eastern Group’s Founder, Mr. Yu-Ziang Hsu, realized the importance of the cement business in a country that was develop- ing so rapidly. Thus, he founded ACC in 1957. The company began supplying the fundamental materials for all major construction in Taiwan, and became instrumental in Taiwan’s economic development. From the countryside to cities, from ɼ Asia Cement (China) Jiangxi plant, China levees to dams, Asia Cement has been working hand-in-hand with Taiwan’s ployment of eco-friendly equipment, its roots in Taiwan, and striving for world government to lay the foundation for it has also made it a priority to re-plant excellence.” Based on its eco-friendly the future. Many of Taiwan’s landmarks vegetation in the mining areas. With concepts and competitive advantages, and major construction projects were abundant new foliage, the plant is trans- ACC has also expanded its business with grounded in Asia Cement’s efforts. These formed into a beautiful park and nature China, and successfully replicated the achievements include the Chunghua reserve. ACC’s efforts in protecting the coastal marine shipping method there, Market, the Grand Hotel, the SongShan environment have set the benchmark setting up wharves along Yangtze River, Airport expansion, Taiwan’s ten major in Taiwan’s cement industry and pro- to reduce costs and raise its competitive construction projects, Taipei Jianguo vided a better working environment for edge. Elevated Expressway, Taichung Power ACC staff and visitors, thus establishing In its first year, Asia Cement China Plant, Taipei Metropolitan Rapid Transit it as a business model for both eco- produced 260,000 tons of cement, and System, and Taiwan High Speed Rail, for nomic development and environmental production has increased today to 14 example. protection. million tons. It supplies the construc- Besides the building of Taiwan’s in- In 1980, Asia Cement introduced tion needs for major cities in the central frastructure, Asia Cement is also focused the “Coastal Marine Shipping” method, and western areas of China and assisted on environmental protection. Compar- shipping cement by vessels to wharves in humanitarian causes, such as the re- ing the company’s first-generation plant around Taiwan. This innovation reduced building of Sichuan province after the in Hsinchu on Taiwan’s West Coast to the cost of shipping in Taiwan and addi- devastating 2008 earthquake. its second-generation plant in Hualien tionally, expanded the company’s reach Cement is an indispensible building on the East Coast, major improvements to extend to Hong Kong, Singapore, Ni- block of urban development. ACC is one have been established in the newer geria, Hawaii, and the Middle East. Using of a community’s many unsung heroes plant’s eco-friendliness. In addition, this business model, the company has helping cities realize dreams and move to the significant steps made in its de- gradually achieved its goal of “keeping its future forward.

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ɼ Far Eastern Department Kaohsiung Store, Taiwan

p50-73(0808).indd 60 2011/8/9 3:03:59 AM Retail — Shaping Taiwan’s Lifestyle

very morning at 10:55 a.m. sharp, Far who purchased local delicacies, clothes, and Eastern Department Stores (FEDS) hand-made crafts and not an uncommon sight staff, stand behind glass doors, would be chauffeur driven foreign dignitaries dressed in red and white uniforms, in signature black sedans line the road on the Ecomplete with jackets and hats, waiting to annual Double-Ten Day Holiday (Taiwan’s Na- greet the first customers at 11:00. A smile and tional Birthday). a “Welcome” is how the hosts at FEDS have Far Eastern Department Stores not only traditionally greeted its customers. FEDS is provided a window for foreigners into Tai- the oldest department store chain in Taiwan, wan, but it also exposed local Taiwanese to and has always set the pace for Taiwanese de- the world. A unique example of this occurs at partment stores. all stores, which periodically hosted interna- In 1967, when Taiwan’s economy emerged, tional expositions. In 1973, FEDS collaborated FEDS accurately estimated the purchasing with the American Institute in Taiwan to host power of Taiwan consumers by converting its first American product exhibition. The four “Skyscraper” knitwear retail stores on company also collaborated with Japan, South Yongsui St. in Taipei into a six-story building, Africa, Germany and Italy for similar exhibi- establishing the first Far Eastern Department tions, each time receiving positive feedback Store. FEDS opened the Taichung branch in from consumers and were such major events 1969, followed by the Baoqing store in 1972, that even the former Vice President of Taiwan, which attracted an unprecedented number of Mr. Chia-Kan Yen, and the former president, customers and established the model for fu- Mr. Ching-Kuo Chiang visited. ture stores. FEDS’s flexible marketing strategies have One of many future retail trends it would made it a mainstay in the life of the Taiwanese establish, the Baoqing store was the first de- consumer. Every branch store offers frequent partment store in Taiwan to include a super- special promotions for budget conscious market. The building includes a spacious retail customers such as a rock-bottom price for area and an open and airy design. Its base- targeted items though with a purchasing limit ment, with over 1,300 square meters of space, and limitless ‘window shopping’ opportuni- features a popular food court as well as a fresh ties during its many store events. meat and produce supermarket. The fifth floor FEDS has the most diverse locations of with boutique shops offering unique and spe- any department store chain in Taiwan with 12 cialized products continue to follow the Far branch stores around the island. The Hualien Eastern Group’s Founder Mr. Yu-Ziang Hsu’s branch is still the only department store on focus that “Far Eastern Department Stores are Taiwan’s southeast coast. When Far Eastern ɼ Various Far Eastern Department Stores events over the years operated based on consumers’ desires.” Department Stores invested in Pacific Sogo At the time the Baoqing store opened, Department Stores in 2002, it became the larg- Taiwan had resigned its seat in the United Na- est department store retail group in Taiwan. tions and foreign affairs were in crisis mode. Since then, it has ventured into mainland During this emotionally turbulent period, China and set up 43 retail locations on both the opening of the Baoqing store was a major sides of the Taiwan Strait, becoming a part of reassurance for the local Taiwanese who ap- people’s lives in all cities it reaches. preciated the risk with “What are you afraid Far Eastern Department Stores have been of? Even, Far Eastern Group believes in Tai- modifying its services to keep up with the wan and is opening up this huge department ever-evolving lifestyle changes of its custom- store!” The Far Eastern Baoqing store is a sym- ers for 42 years, but has been unrelenting in bol of Taiwan’s economic stability. It was the maintaining its insistence on quality and serv- last stop of foreign presidents visiting Taiwan, ice excellence. ɼ Pacific SOGO Department Stores Tianmu Store grand opening

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Petrochemicals — Complete the Integration

riental Union Chemical Cor- pany to reduce the cost of manufacturing. 150,000 tons to 300,000 tons. In addition, poration (OUCC) of the Far The controlling force behind all of these it diversified its product lines by adding Eastern Group is a major actions, however, was the sense of mis- ethyleneamine (EA) and ethylene carbon-

specialty chemical supplier in sion held by Mr. Yu-Ziang Hsu. Victoria ate (EC) production. CO2 emissions were OAsia. The company represents the persist- Peng, Executive Vice President of Human reduced by 40% thanks to adherence to the ent spirit of Taiwan’s businesses, and has Resources, Logistics & Administration, company’s emphasis on environmental often broken new ground in the history of laments the anxiety that occurred during protection during the EC manufacturing Taiwan’s chemical production. these years of financial loss, but fondly re- process. It had elevated the importance of While Taiwan’s economy was taking calls Founder Hsu whose leadership never environmental protection alongside eco- flight with ten major construction projects demonstrated panic, but instead exuded nomic development. in the 1970s, the government identified the calm and determination. OUCC is now constructing a third plant petrochemical industry as a strategic or Throughout its 30-plus years, OUCC for EA in Yangzhou, China. EC production pillar industry for focused development. has witnessed a great deal of turbulence in in Taiwan was raised from 40,000 to 60,000 The Far Eastern Group’s Founder, Mr. Yu- the petrochemical industry. Through the tons, making the company one of the lead- Ziang Hsu, had a vision of making Taiwan difficulties, the company benefited from a ing specialty chemical suppliers in Asia. self-reliant in chemical production - with- stable foundation grounded by Mr. Hsu’s OUCC began investing in ethylene oxide out the need to import chemical products vision. Johnny Shih, former President of the derivatives (EOD) production in line with from abroad. In 1975, OUCC was founded company and now Group Vice Chairman, its goal of remaining immune to fluctuat- as a joint venture of the Taiwan govern- initiated an innovative business model 15 ing crude oil prices. Tailoring its products ment, Union Carbide Corporation, USA years ago, which dictated the company to customer needs, OUCC became what and Far Eastern Textile Ltd. (renamed Far would no longer rely on a single product. might be called a “boutique shop” in the Eastern New Century Corp.). This signaled The first change in OUCC’s business petrochemical industry. Having passed the beginning of Taiwan’s petrochemicals model was to expand its annual production through difficult times, OUCC now em- development. capacity by increasing EG production from barks on a bright future. In Mr. Yu-Ziang Hsu’s memoir, he de- scribes how soon after OUCC was founded, the world faced its second oil crisis and the price of ethylene (C2) jumped astronomi- cally. In 1982, Taiwan’s government pushed for trade liberalization and approved ethylene glycol (EG) imports. OUCC was in crisis with its products lacking competitiveness due to the high cost of manufacturing, and for several months was forced to cease operations. After being in business for seven years, the company reported a loss of NT$500 million, which was almost identical to the initial investment. To make matters worse, Union Carbide Corporation announced its divestment in the company. Such crisis didn’t stop OUCC and ar- rangements were made to transfer its international loans, which carried high interest rates and strict terms back to Tai- wan, meanwhile reducing its financial burden by obtaining a loan underwritten by ten Taiwanese banks. In addition, it acquired the Union Industrial Gas Com- ɼ Oriental Petrochemical (Shanghai) Corporation, Shanghai plant, China

p50-73(0808).indd 62 2011/8/9 3:04:06 AM ɼ Oriental Union Chemical Corporation, Lin Yuan plant, Taiwan

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Shipping — Sail Taiwan to the World

Ming Marine Transport 50th, and was awarded second place for Corporation (U-Ming), “Outstanding Financial Performance” in formerly known as Yue- Marine Money International. Ming Transportation Rallying against all odds, U-Ming has Co.,U- was established in 1984. The com- thrived in a perilous economic environ- mencement of U-Ming’s operations ment, transitioning from a defensive to pushed Far Eastern Group (FEG)’s reach an offensive business strategy over the from land to sea. Yue-Ming Transporta- years. U-Ming has foreseen the expan- tion originally transported cement using sion of public construction projects in trucks; in 1980, it modified its business many countries, as well as the rising model to provide marine transporta- need for bulk transportation. As main- tion of cement. It contracted China Ship land China increases its imports of iron Building Co. to build Asia Cement No.1, ore and coal, and India, Eastern Europe which transported cement to various and South America’s economies emerge Taiwanese ports, creating a new marine with increasingly liberal market prac- shipping model. In 1984, the company tices, marine transportation is becom- added a second self-loading/unloading ing more important. U-Ming has been maritime carrier. Since then, U-Ming enhancing its competitiveness through has been responsible for marine trans- mergers, replacement of old vessels and portation operations only and shifted fleet expansion. from transporting cement to bulk raw How does one deal with these moving materials. targets? How does one adjust and adapt ɼ U-Ming Marine Transport Corp. Very Large Crude Carrier, In these 25 years, U-Ming has be- to the uncertainties prevalent in capital Starlight Venture come the largest bulk carrier in Taiwan, raising and shipping costs? It takes a possessing various vessel types such leader with a wealth of experience to as Capesize carriers, Panamax carriers, make a good judgment call. “The flex- Handy carriers, and Very Large Crude ibility and agility of our business model Carrier (VLCC) vessels. Taiwan’s location have been crucial factors in U-Ming’s makes it a crucial shipping point in Asia success,” says Ong. for marine transportation. By becoming There was another opportunity for a major competitor in bulk carriers, U- growth when Taiwan’s government Ming has assisted Taiwan’s transforma- signed the “Agreement on Cross-Strait tion into a major shipping hub in Asia Sea Transportation” with mainland and raised the bar for quality marine China in 2009. This opened up the transportation. “Marine transportation is market for shipping vessels to travel be- the most cost-effective shipping method; tween China, Hong Kong, and Taiwan. the need will not disappear,” says U-Ming In 2009 U-Ming was the only company President Choo-Kiat Ong. that was approved to have nine shipping U-Ming Marine was listed in Forbes vessels ship directly to China for a three- Asia’s “200 Best under a Billion” in the year time frame, giving the company a Asia Pacific region in 2005. In 2009, tremendous advantage in cross-Strait CommonWealth magazine awarded U- business development. In the future, U- Ming Marine sixth place in the top-500 Ming is working towards modernizing a service industry net profit list, and third high-quality fleet for a bright future that in profitability. Under CommonWealth will outshine competitors in both the magazine’s Fortune 1000 Companies in cross-Strait and international business cross-straits category, U-Ming is listed arenas. ɼ U-Ming vessel docked at port, loading and unloading

p50-73(0808).indd 64 2011/8/9 3:04:18 AM ɼ U-Ming Panamax vessel – Cemtex Prudence

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Financial Services — Professional and Prudent Services

ar Eastern Group (FEG) has al- in the near future. FEIB’s financial oper- ways exuded trust in the banking ating philosophy is based on Mr. Hsu’s industry because of its exemplary insistence on being of service to citizens, credit quality. FEG established the nation, and society, creating prosper- Ftwo boutique financial institutions, Ori- ity and satisfying customer needs. Doug- ental Securities Corporation (OSC) in las Tong Hsu, Chairman of FEG, indicates 1979 and Far Eastern International Bank that the reason why FEIB and OSC can (FEIB) in 1992, which according to cus- stand firm is because the companies tomers are a testament to the Group’s have niche products. With six branches reliability and credibility. in Taiwan, OSC maintains the position Far Eastern Group (FEG)’s financial of operating strictly with its own capital. operating philosophy comes from Mr. Yu- OSC has a well-developed research team Ziang Hsu’s early experience in Shanghai. which keeps abreast of new information In 1942, Mr. Hsu established Ta-Fu Secu- in various business sectors. It has com- rities, assisting customers trading war- prehensive knowledge of the market and time securities. At that time, there were is thus capable of providing precise mar- not many more than ten securities com- ket analysis. panies in Shanghai. Despite the chaotic OSC fortifies its competitiveness by economy and the extremely turbulent introducing new financial products such stock market, Ta-Fu customers were loyal as warrants, and providing service and and reliable. advice to customers with the desire to and cash payment services becoming a When Mr. Hsu moved to Taiwan, a invest in diversified portfolios, including pioneer ACH bank. For years, it ranked significant period of time elapsed before hedging products. In 2007, it introduced number one in Convertible Bond Asset he re-established a securities company. the Korean HTS trading system. This al- Swaps and Foreign Exchange Margin In 1979, with Far Eastern Textile Ltd. lows customers to easily manage their Trading. Furthermore, in 2003 it became (renamed Far Eastern Century Corp.) portfolios with a touch of their fingers. the first bank to initiate unsecured Euro- and Asia Cement Corporation on stable By providing services in trading funds convertible bond (ECB) services in the footing, Oriental Securities Corporation including overseas funds, insurance, and international market. Based on the com- (OSC) was finally established. Starting other products, the company became a pany’s diversified strategy, it took various out with a focus on FEG’s own needs, and trustworthy professional consultant for steps to develop several financial services expanding with a brokerage department investors. “We are a likable company firms, including Far Eastern International in 1989, it became a full-service securities based on our professionalism and profit Leasing Corporation, Dah Chung Bills ɼ Top: Far Eastern International Bank headquarters trading company. After the liberalization growth,” said the President C.C. Lin. Finance Corp., Far Eastern Life Insurance ɼ Bottom: The people-oriented, friendly services of Taiwan’s banking industry, the Group In the last 10 years, FEIB has moved Agency Co., Ltd. and Deutsche Far East- provided by Far Eastern International Bank established Far Eastern International into various business sectors to expand ern Asset Management Co., Ltd. ɼ Right: The lobby of Far Eastern International Bank Bank (FEIB). Although its scope of serv- on its goal of innovation. It has accom- OSC and FEIB help revitalize the econ- ices is not as large as other financial enti- plished this goal with the momentum omy and the financial market in Taiwan ties, it has experienced a steady growth created by establishing various business by providing brokerage services with the rate of 10% over the last 5 years. The busi- groups under the organization. flow of capital funds. They also meet the ness covers four major areas of financial FEIB is the first bank to assist busi- financial need for efficient trading. These service operations (corporate banking, nesses with Taiwan Depositary Receipts two companies provide a record and offer financial banking, individual banking (TDRs). In 2003, it established strategic proof of Taiwan’s financial liberalization and consumer banking & credit cards) for financing alliances with automobile deal- process. a well-rounded product line. ers and became the first bank in Taiwan to With the lifting of the restriction on In 2009, FEIB acquired the assets of introduce an installment payment service cross-Straits economic trade imminent, AIG Credit Card Company (Taiwan) Lim- and ranking number one in that area. In OSC and FEIB are prepared to welcome ited. The company’s credit card market addition, FEIB introduced a platform as a new chapter in the Group’s financial share is expected to rise correspondingly an Automated Clearing House (“ACH”) services history.

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ɼ Far EasTone telecommunications services are entrenched in the daily lives of users

p50-73(0808).indd 68 2011/8/9 3:04:43 AM Telecom & Internet — Connecting for Better Lives

January 1998, Far EasTone Telecommuni- cations Co., Ltd. officially opened its doors for business. Proof of Taiwan’s telecommunications liberalization, it would lead FEG intoIn a new era of communication without boundaries. In the early days, consumers primarily purchased cellular phones for work. As society has evolved, cellular phones have become necessary for all facets of communication including maintaining interpersonal relationships. When the Legislative Yuan amended the telecommunications law in 1996, and the Ministry of Transportation and Communications lifted its restric- tions and allowed use of cellular phones, pagers, and three other types of wireless communication devices, AT&T of the U.S. joined with Far Eastern Group to establish Far EasTone Telecommunications preparatory office as a joint venture. In 1998, Far EasTone launched receiving tremendous success after two years of focused market research to better incorporate telecommunications services into daily life. Not only did it introduce the innovative pre- paid communication card – IF Card, changing many people’s cellular phone usage habits; it was also the first ɼ Far EasTone Telecommunications service lobby to launch financial information services - MobileInfo. Where consumers can get the most up-to-date informa- targeted at the Chinese market. The company proac- tion on stocks, foreign exchange, sports, travel, weather, tively established an alliance with Taiwan’s renowned news, cultural events, movies and more. Eslite Bookstore to promote digital readers and hopes Since Far EasTone’s founding, it has strived to touch to establish itself as the most influential entity promot- our daily lives with innovative services. In 12 years, ing cultural knowledge in the Chinese community. Far Far EasTone’s accomplishments have influenced the Eastern Group also consolidated its telecommunica- finance, medical, entertainment, e-commerce, com- tions companies in preparation for the new digital era. munity and emergency service industries, as the com- In 2008, Far EasTone, New Century InfoComm Tech pany has strived to meet customers’ needs. Far EasTone Co., Ltd. and Digital United Inc. were integrated into the Vice Chairman Jan Nilsson indicates that compared to “FEG Telecom Sector” to achieve synergy and provide customers from other countries, Taiwanese customers integrated mobile communications, broadband, media are more open to new products, services, and concepts. and international services. It became a one-stop shop “Consumers have high expectations of Far EasTone. This for consumers, satisfying their needs and allowing them is our motivation for innovation.” Due to the globaliza- to select desired services with ease. It is believed that tion of the telecommunications industry and saturation the Telecom Sector integration will give Far EasTone the of Taiwan’s telecommunications market, Far EasTone edge in this competitive market. has set its focus on Greater China. In 2009, Far EasTone Far EasTone has spent 12 years building its domestic forged a strategic alliance with China Mobile. This alli- telecommunications market. On top of the integrated ance marks a tactical milestone in Taiwan’s telecommu- power provided by the FEG Telecom Sector, Far EasTone nications history. will remain on the front line of innovation and soon be Far EasTone’s innovative products are specifically leaping forward towards the next stage of growth.

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ɼ A-Mart Stores, Dazhi Branch, Taipei, Taiwan

p50-73(0808).indd 70 2011/8/9 3:04:49 AM Promoting Taiwan’s Agricultural Products

slogan at A-Mart reads: “Get the most bang for your est produce and fish available. A-Mart has also helped advance buck at A-Mart!” How does this happen? Actually, the agricultural industry in Taiwan by providing produce from it’s not only consumers and retailers that benefit, ten top outstanding farmers recognized by the Council of Ag- but the hardworking farmers throughout Taiwan’s riculture (COA), such as Bio-Security Liquid Feeding (BSLF) Aagricultural ecosystem and economy as well. pigs, and Cherry Valley ducks which originate from Britain and Every year during the papaya harvest season, a fruit farmer were once only exported to Japan. in Pingtung County feels a mix of excitement and nervousness A-Mart is also a leading promoter of traceable agricultural about the papaya harvest. Most of the time, anxious and sad products. Cooperating with the COA in Taiwan’s Executive over how many papayas need to be sold at a decent price so Yuan, A-Mart held a promotion called Taiwan Week, providing that he can support his family. “We don’t ask for much. As long top-quality local produce along with traceability machines at as people are willing to buy this fruit so that I can raise my child its hypermarkets for customers to learn more about fresh, certi- and send him to college, I am satisfied,” he laments. In recent fied produce. This was the first collaboration between a hyper- years, A-Mart has cooperated with fruit farmers around Taiwan market and the Taiwanese government. The subsequent One providing them with a delivery service and helping local farm- Town, One Product activity was held monthly with the chief of ers so they don’t wind up empty handed. From a consumption each village or town as the spokesperson. point of view, it provides the freshest and healthiest produce A-Mart has also become a platform for Love Taiwan. To while being more environment-friendly due to shorter delivery solve the problem of the banana surplus in 2007, A-Mart held distances. the A Million People, a Million Bananas activity. By offering “Since retailing is Taiwan’s chief industry, why do we sell each banana at a price of NT$3, eighty tons of bananas (1.2 mil- more imported produce than local produce?” Tim Chuang, lion bananas) were sold within two days. The good fruit harvest Chief Operating Officer of A-Mart, started asking three years in south-central Taiwan in 2009 resulted in surplus stock. To ago. In addition to making money, an enterprise should also solve this problem, A-Mart held the Saving Farmers by Buying consider how to contribute to the local economy. In light of event, during which NT$1 lemons and NT$5 guavas resulted in this, A-Mart started to hold a series of activities. For instance, about 350,000 kilograms of sales, creating NT$5 million income Produce Delivery Service first introduced by A-Mart, has be- for farmers. Through the direct sale of improved produce at A- come the bridge that connects farmers and consumers, balanc- Mart, A-Mart’s strategy contributes to the advance of Taiwan’s ing production and marketing as well as commodity prices. agricultural technologies. Farmers are better able to gauge Moreover, it follows the principle of carbon emission reduction whether the produce is acceptable to consumers and can use and guarantees safety and freshness providing a win-win strat- the feedback to further improve agricultural technology. egy for all. “We have to be a top enterprise and a contributor to every- By harvesting, fishing, and delivering to each branch on the one” said Mr. Y. Z. Hsu, the Far Eastern Group’s Founder. “Love same day, farmers and fishermen are free from price-cutting of Taiwan” is not merely a slogan but an opportunity to show our wholesalers, and consumers are able to buy the cheapest fresh- love for Taiwan by buying its own produce.

ɼ Taiwanese produce sales at A-Mart Stores

p50-73(0808).indd 71 2011/8/9 3:04:54 AM THE IMPACT WE MAKE ECONOMY

ɼ Far Eastern Group plan in Banqiao Super HOPSCA business district

p50-73(0808).indd 72 2011/8/9 3:04:58 AM Uplifting Local Prosperity

he Far Eastern Group creates prosperity everywhere it goes not only by building thriving local business districts, but also by helping inte- Tgrate Taiwan into the world. In 1952, when Taiwan’s economy was ɼ Taipei Metro business district, Taiwan rapidly improving, Far Eastern Textile Ltd. (FETL, renamed Far Eastern New Century nity has attracted financial services and Corp.) set up its textile plant in Banqiao. information technology firms turning the Then, in 1969 and 1972 respectively, FETL Taipei Metro area and the office buildings established its Hsinpu and Neili plants. nearby into a leading business district in The Far Eastern plants helped Banqiao, the capital city. Hsinchu, and Neili prosper with employ- The Far Eastern Group has also helped ment opportunities and bustling new busi- invigorate a metropolitan trend in Tainan, ɼ Tainan FE21’ business district, Taiwan ness districts. As Taiwan’s economy peaks southern Taiwan. During the 2008 financial and residents put a greater emphasis on the nation’s internationalization and eco- turmoil, the Shangri-La’s Far Eastern Plaza living standards, the 1994 twin skyscrap- nomic progress. Master Architect Louis Hotel, Tainan, a towering and magnificent ers built by the Far Eastern Group on Tun Sullivan, the renowned skyscraper de- 38-floor skyscraper, opened, becoming the Hwa South Road in one of Taipei’s leading signer, said, “The skyscraper must be tall, tallest building in Tainan as well as the first business districts have become landmarks, every inch of it tall. The force and power of five-star international hotel in south-cen- providing inspiration for Taiwan residents altitude must be in it, the glory and pride tral Taiwan. Located between the train sta- to build a better future. of exaltation must be in it. It must be every tion and National Cheng Kung University, In 1972, the Far Eastern Department inch a proud and soaring thing, rising in Shangri-La’s Far Eastern Plaza Hotel has Stores Baoqing branch opened. Along sheer exultation that from bottom to top it reinvigorated Tainan’s historic landscape, with other branch stores subsequently is a unit without a single dissenting line.” attracting international travelers, activating opened in Taiwan, most were the first The 1994 Taipei Metro Towers with 41 a renaissance in the business district, and department stores in its area, providing a floors, 5 basement floors, and 3 acres of enriching the tourism industry. place for residents to enjoy their leisure space are magnificent eye-catching build- In 2009, Banqiao sees its most ambi- time. A study of its evolution has found ings on the metropolis’ skyline, combining tious project to date break ground where that when FEDS opens a new branch, it an international hotel, top-class shopping FEG has grown and thrived for the decades attracts beauty salons and specialty brand mall and business offices of some of the since it began. With the creation of the shops opening the way for a revitalized world’s leading institutions. The multi- Banqiao Super HOPSCA (H: Hotel, High- new business district. First floors of nearby function building has elevated Taipei to density Transportation System; O: Office, buildings are converted into parking ga- the level of an international metropolis Odeum; P: Parking, Park; S: Shopping, Su- rages and branded clothing companies and ensured FEG’s status as a business per Dome; C: Conference, Convention; A: not included in the department stores set district leader. Apartment, Administration Center), where up their boutiques and stores in the dis- What FEG has created is not merely the Taiwan Railway, Taiwan High Speed tricts. Eventually, chain restaurants, bridal “proud and soaring,” but an upscale Rail, MRT Blue Line and MRT Yellow Line shops, and household appliance shops lifestyle. The luxury spas, hair salons, converge, a major 231,000 square meters open branches. Almost every business dis- boutiques, lounge bars, and restaurants FEDS shopping mall and a 50-floor top- trict created around a FEDS has evolved along Tun Hwa South Road and Anhe class office building are under construc- through these three stages, elevating rents, Road today have elevated the district from tion. With the growth of Banqiao into a changing spending habits and sparking a residential area to a high-end district, thriving hub of activity, this area will not economic development in the district. providing consumers with luxury services only become a landmark destination to Far Eastern Group’s twin towers sym- without the need to travel abroad. In addi- the Super HOPSCA, but a landmark for all bolize the miracle of Taiwan, reflecting tion, the international business commu- of Taiwan and its visitors.

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