A Word From the Company

The Moment When Mother Earth Stomped

At 7:58 AM, on April 3, 2024, together we experienced a magnitude 7.2 reality-shaking tremor.

For the Earth, it was only releasing its energy as usual, just as it routinely absorbs the scorching sunshine or endures the ordeals of wind, rain, thunder and lightning.

For the Earth, it was merely shedding excess energy, which may be nothing but its minor trembles or gentle sneezes, considering what it has released around the world in the past 50 years.

However, for humanity, all of these releases have evidenced as such disasters as earthquakes, volcano eruptions, flooding, forest fires, tsunamis, hurricanes, heatwaves and droughts, all underscoring the global consensus on abnormal climate pattern and extreme weather changes.

In the past, these large abnormal releases occurred occasionally, perhaps once every few decades or even centuries. This time alone, it took just 50 years to increase the disasters five times bigger as a result of global warming.

Taiwan Cement Corporation’s (TCC’s) Hoping cement plant, harbor, and Hoping power plant, all located at the tectonic plates that measured the highest seismic intensity, were the most hit, with the disaster (nature’s force) imposing profound impacts on us.

The Adhesive of Human Civilization

To the Earth, what significance do humans, in all their minuteness, hold?

20 years or 50 years, they are but human constructs of time. Yet, to the Earth, which has existed for billions of years, we are not a necessity. It is we people who need the Earth. Upon relying the Earth, humanity must behave and act responsibly for our way of life on this planet, continuously seeking sustainable modes of existence.

This year marks the 200th anniversary of the invention of Portland cement.

Today, after the magnitude 7.2 earthquake, we still rely heavily on cement for reconstruction, whether roads or homes to be rebuild, just as humans did 12,000 years ago (a particular mixture of time). From 12,000 years ago to the present day in 2024, cement remains the adhesive of human civilization, firmly securing the ever-progressing realities of human life upon the Earth.

12,000 years ago when limestone was used by humans, our population was one million; 2,000 years ago when volcanic ashes were added in cement, the population increased to 2 hundred million; 200 years ago when Portland Cement was introduced, the population rose up to one billion. This year, as we celebrate the bicentennial of Portland cement, the world population has reached over eight billion.

As we move into 2024, 200 years after the introduction of Portland Cement, it has witnessed the advent of an era of new low-carbon cement and new energy sources, signaling a new civilization for humanity to be unveiled. TCC’s Ultra High Performance Concrete (UHPC) energy storage cabinet, signature-named “Energy Ark” which carries the dual conceptions of low-carbon and green energy as a bridge between them, is a jigsaw puzzle piece of our final picture of ”Fantasy of Cement.” It is our proactive and concrete response to entering into a new era of low-carbon and green energy.

The Challenge of Time vs. The Trajectory of Response

People are born, and they are destined to die. It is also inevitably so when a civilization or a nation is involved, not to mention a society or an enterprise.

But the Earth does not measure time in the same way as we humans do; time is but the mark deliberately sculpted to document human civilization in response to changes and challenges posed by nature.

In 1983, MOTOROLA launched the world’s first handheld mobile phone but the company was split and sold in 2011. In 2001, Taiwan Industrial and Mining, one of Taiwan’s first batch of publicly-listed companies, was shut down after a 40-year operation dating back to 1962. The delisting of Japan’s TOSHIBA Corporation was just last year in 2023, showing that it was privatized after 74 years of trading on the Tokyo Stock Exchange.

However, today, I am fortunate and honored to represent TCC, the first listed company on the Taiwan Stock Exchange with the stock code 1101, to meet here with everyone of you, my valued shareholders. From the very beginning, TCC, being aware of cement as the most reliable building material for humans to construct the foundation of a friendly living environment, has always been at the forefront safeguarding such an unwavering belief.

TCC has always trodden the most challenging paths, braving through throns and thistles, engaging in long-term exploration with such natural elements as sunlight, air, water and soil upon which humanity relies. We strive further to understand the intricate relationship between human and nature, thereby seeking and realizing the best ways for humans to live on the Earth, with the best solutions.

Light up the Torch of Sustainability on Earth

On this admittedly long and winding road, we choose only to walk without stop until eternity. The only time scale TCC pursues is sustainability, namely sustainable operation and sustainable development. With a view to catch up with the changes in the environment, we must not only open our eyes and listen very carefully, but also examine constantly to ensure if we stay true to our original thoughts. Only then can we make our steps steady, maintain the balance between internal operations and development, and eventually achieve long-term success.

62 years ago in 1962, TCC became the first publicly-listed company in Taiwan, with the stock trading code 1101. 7 years ago in 2017, TCC had 16 subsidiaries, with over 80% of its revenue still coming from cross-Taiwan Strait cement markets. Today in 2024, we have 27 subsidiaries, spanning 11 industries which are operational in 13 global markets.

Again, 62 years ago, TCC operated as a cement-only supplier. 62 years later as of today, TCC has advanced itself to become a developer of low-carbon building materials, resource recycling and green energy at the same time. No longer just a supplier of raw-materials, but we compete and break new ground alongside high-tech and electronics industries for new frontiers, pioneering among cement fellow workers.

We are far from being able to predict an earthquake or any extreme climate events. We could only watch out for and try to understand constantly-evolving carbon lexicon popping up anytime soon in this Carbon Era, such as: carbon sinks, carbon fees, carbon taxes, carbon credits, carbon audits, carbon leakage, CBAM, ETS, etc.

We assert ourselves to take the lead, hoping to hold back the reins of global warming so we can race against the increasing momentum of climate change, and to explore and realize possible solutions on the path to net-zero emissions.

If you act like TCC, having spent a long time at the forefront of protecting human life, being able to deeply understand the laws of nature and how the world changes, you will realize that there are no coincidencse, no fluke, or no pure luck, but one step after another, with sweats and labor toil in dedicated work.

Over the past seven years, the TCC team has worked from ground zero as “have-nots”, holding the torches high with confidence in the long and dark tunnel, lighting up the exploration of this new journey towards a new civilization of mankind.

With Lights alongside, Healthy and Robust Financial Statements are in Place

Many people have asked:“Can environment protection and economic development go hand-in-hand?” It used to be a question they were unsure about or hesitated to give a firm answer.

Today when we ask again: Is economic development achievable without carbon reduction and concern for the environment?” Through, and evidenced in, our explorations this past few years, the answer is now a hundred percent affirmative.

Environmental health and economic health can march forward side by side and every company will take a decisive turn to pursue them because we have already led the way through this journey. In specific, this is the main topic that we have faced the entirety of 365 days in a year, 24 hours in a day, and down to every minute and every second.

Sustainability is not a noun for TCC today, but a verb of present progressive tense, meaning a continuous action.

It makes great strides powerfully, eligible to produce one healthy, robust and future-oriented promising financial statement after another.

Before 2018, the cement and cemented-related business of TCC, both in Taiwan where it originated and mainland China, accounted for over seventy percent of its revenue, serving as the two pillars supporting the Company. At that time, we had already foreseen after a comprehensive internal study that the Chinese cement market might already hit its peak to plateau and a gradual downturn was looming. Therefore, starting from 2018, we undertook to explore markets elsewhere beyond the Strait, with a joint venture with Turkey’s OYAK the first step, to be followed by the acquisition of ultra-low carbon alternative fuels in Africa through Portugal’s Cimpor. By the move of Cimpor’s utilizing calcinated clay as a substitute for limestone clinker to produce ultra-low carbon cement, it has steadfastly positioned TCC as a global leader in the cement industry with the lowest carbon cement production.

To date, TCC has already gotten benefited from investing in Europe in the low-carbon cement. In 2023, approximately 45% of its profits was contributed by low-carbon cement.

At the end of November of last year, TCC resolved to increase its investment in the low carbon cement in Europe, Asia and Africa. We raised our shareholding from 40% to 60% in OYAK, and from 40% to 100 % in Cimpor. Although increased production might be a source of additional cost in an era where carbon is priced, we have decided to mitigate the burden with more low-carbon products. Low-carbon building materials agreeably are set to become our competitive edge in the European market. The international layout in Turkey, Europe and Africa will no doubt constitute a stable third pillar for TCC’s stable future operations.

Over the past six years, TCC has dedicated itself to a low-carbon transformation, and investing in green energy that can be stored, managed and aggregated for use and trade. We have also established sites for various energy storage projects, capable of regulating total demands like reservoirs to provide stable power supply frequencies, and enhancing energy efficiency through the deployment of smart grids. In addition, the reliable and high-power lithium-ion batteries are produced to meet the ever-growing market demands, aiming at a leading role. In aggregate, we have realized in a full scale a new, clean, environmental-friendly, renewable and infinitely-recyclable mode of energy use.

These new energy ventures, which stand to support and extend to the next-stage human civilization, are our antenna reaching out to the future. Not only have they brought stable profits, but also they have made possible the accumulation of numerous cross-business-category patents and technologies, enabling us to firmly believe that we will stay unbeatable in the competition of carbon reduction and energy renovation in the future.

The new energy sector, which supports and enables TCC to transform it to detach thoroughly in bones and marrows from its historical role, is the fourth pillar to hold up a brand new TCC.

In the FY 2023, we handed in a financial statement, featuring a balanced footing on four sectors: diversified income, risk dispersion, innovative synergy and ample cash flow, demonstrating a healthy and robust financial status.

In an effort to proactively take on and respond to societal needs and expectations, TCC has set to lay out its short, medium and long-term goals, corresponding respectively to the year of 2025, 2030 and 2050, which are traceable, enforceable in good order and verifiable. This sound and healthy financial statement of TCC was not obtained by accident but by concerted action in one accord with a step-by-step perseverance of all at TCC. It is a solid proof that we never back down, with its credibility open to public scrutiny. In sum, this positive health checkup report was credited for our unstopped self-challenge.

Sailing toward a Waterway Exclusive for a New TCC with the North Star in Sight

This low carbon era is a new epoch about sustainability and energy transformation actions and reflections. In human history, there are no precedents or markers left by our predecessors and no one knows exactly how to navigate this new course.

Comparable to sailing in the vast expanse of ocean, both open and boundless, without a clear direction, it appears that the only guidance is a kind heart with good intentions possessed by all humankind, just like the eternal North Star hung in the night sky to eternally steer us, surpassing the compass needle or the sunset in the valleys commonly held or seen.

What is certain is that TCC is walking on the right path.

At this moment, 200 years after the invention of Portland cement, there are only two types of cement workers said to be left:

One is he who is mesmerized by yesterday’s cement industry, still focusing on production volume;

The others are those who look towards a promising tomorrow, firmly and confidently continuing on their path.