Business Overview
Business Overview
In 2023, several factors have impacted global economic development and social stability. These include geopolitics, the economic and trade standoff between China and the United States, the impact of interest rate hikes and inflation, the recovery of China's economy has yet to recover significantly following the lifting of restrictions, and the destocking process. According to S&P Global, the global economic growth for 2023 was forecast to be 2.3%, which was lower than that of 3.0% in 2022.
The performance of Taiwan's paper industry in terms of supply and demand has been subpar this year. Despite China fully reopening in the first half of the year, the economy has struggled to recover in the short term. Additionally, unfavorable external environmental factors persist, and market demand remains sluggish. Domestic containerboard operations have experienced an unusual recession for the first time in recent years, and the market has not shown any significant signs of recovery yet. The decline in production and sales volume of containerboard has affected its selling price. However, the price of containerboard has remained relatively stable despite changes in demand. Furthermore, the rate of price adjustment was not sufficient to reflect the cost due to the continuous cost padding, and constrained by the market downturn, we could only absorb the cost on our own. This year, the market conditions have been marked by a slow domestic market and a weak external market. The industry continues to be enveloped in a destocking atmosphere, and the demand for paper packaging is not obvious. According to the Taiwan Paper Industry Association, total paper production volume in Taiwan in 2023 declined by 3.6% from the previous year to 4.09 million tonnes, while total sales decreased by 5.0% to 4.038 million tonnes, with domestic sales declined by 7.5% to 2.452 million tonnes and export sales declined by 1.0% to 1.586 million tonnes. As a result of the slowdown in the end-market demand, the production and sales of corrugated containers in Taiwan also declined by 2.9%, or around 2.12 billion M2, compared with last year.
In 2023, total consolidated revenue of the whole group was around NT$42.17 billion, a decrease of 4% compared with the previous year, and net profit after taxes amounted to approximately of NT$0.93 billion, a decrease of 65.6%. Although the Group's revenue and profit decreased this year compared with last year, the Company has continued to develop both domestically and internationally. In addition to actively pursuing new packaging opportunities, we are continuously striving to improve processes and optimize product structures to increase efficiency and prepare for future growth. The overall profile of production and sales is as follows：
Our efforts and achievements in management and operations in 2023 are as follows:
Looking ahead to 2024, demand is projected to continue its moderate recovery, with raw materials experiencing slight fluctuations. Various industries are expected to steadily rebound. With the tightening of monetary policies and the decline in consumer purchasing power will have delayed effects on major economies, resulting in a noticeable slowdown in the growth rate of the U.S. market, Europe being on the verge of recession, and China's economic activity being hindered by challenges in the real estate industry. Therefore, the risk of a global economic recession remains high. According to S&P Global, the global economic growth for 2024 is forecast to be 2.5%. The Directorate General of Budget, Accounting, and Statistics, Executive Yuan, estimates that growth rate of the Taiwanese economy will be 3.43%. While the economic growth rates of China and Vietnam, where the Company's production and sales offices are located, are estimated to be 4.5% and 5.8%, respectively. The real estate market in China is experiencing significant shifts in supply and demand. The diminishing marginal benefits of the policy of maintaining stable economic growth are becoming evident as the economy transitions from rapid growth to a more moderate pace. Additionally, the traditional manufacturing industry has reached a plateau phase after reaching its peak, and it must undergo intelligent and digital transformation to seize the opportunity for another period of growth. Vietnam continues to receive active foreign investment, with many technology industries increasing their share of investment, making it a member of the "New Chain of Asia," which still has a promising future.
In the coming year, the Company's main business policies are as follows:
- 1. Improving operational efficiency through intelligent production and sales.
- 2. Lean management ensures consistent growth.
- 3. Innovative product services create win-win situations.
- 4. Key talents enable global localization.
- 5. The process of low-carbon transformation contributes to the development of a net-zero ecological system.
- 6. Strengthening Operational Resilience through Cybersecurity Risk Management.