Message from the Chairman

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COVID-19 changed the human lifestyle in 2020, and resilience has become the key to sustainable development of enterprises. In 2019, USI Group (USIG), set “create and cohere sustainable value for a sustainable society” as our sustainable development vision to promote overall social sustainable development through environmental protection, social development, and corporate governance (ESG) in the process of production, operations, and value creation. In addition, we also set “R&D and Innovation,” “Steady Operations,” and “Social Inclusion” as our three major development strategies to stabilize self-development and make society better.

 Abundant Innovation Energy

COVID-19 has changed the global lifestyle, accelerated offsite office (or work from home), and videoconferencing. We constantly invest in the innovation and R&D of CBC process optimization; the diversification of EVA application in ink, shoe styrene, and electrical wires/cables, the new application of PVC products and development of eco-PVC; the development of eco-low VOCs EPS; and the development of the SiC market application. All these efforts aim to make life more convenient for people and the reduce the environmental load.

 Steady Operations and Production

The deteriorating climate change has increased the risk of operational interruption. For example, the Texas severe winter storm has messed up the global petrochemical supply chain. As climate change brings ongoing threat to business continuity, we have formed the Task Force on Climate-related Financial Disclosures (TCFD) to assess climate risks and opportunities in business operations, set the annual carbon reduction targets, and implemented programs to enhance production efficiency and energy efficiency.

In addition, we value the safety of employees in the workplace environment, therefore, we have promoted the goal of five zeros: zero pollution, zero emissions, zero accidents, zero occupational hazards, and zero failures. We have also implemented the process safety management (PSM) system in the high-risk sites to minimize the possibility of accidents through qualitative analysis and onsite management.

 Social Participation for the Common Good

During the outbreak of COVID-19, we integrated USI’s R&D capacity and products to provide disinfectants for units in need when epidemic control materials were in short for the earliest recovery of Taiwan’s social operations. Through the long-term support for The Alliance Cultural Foundation and Taitung Junyi Experimental High School, we devote to the sustainable development of rural education and Hualien and Taitung, hoping to maintain educational equity for rural children.

In a time of rapid changes, there are more challenges challenging business operations. To USI, we take them as opportunities. After all, make society better is the mission of business operations. There is never overnight success for ESG operations. With the participation of independent directors and the opinions of the CSR Committee, we steadily establish and develop a culture of sustainable development to demonstrate core value together.

Message from the President

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 Fulfilling Corporate Social Responsibility

Plastic is a material indispensable to the modern life. While the manufacture and sales of plastic resin pellets are USI’s the major scope business, how to reduce the environmental impact of plastic has been the common understanding of USI and the global plastic industry. As a traditional plastics manufacturer, it is the responsibility and obligation for USI to play its role well as a corporate citizen. In the last year, we implemented the measures to prevent plastic resin pellets from leaking into the ocean. We also endeavored to reduce the environmental impact of our production activities through constantly promoting local purchase, energy conservation, carbon reduction, and resource recycling. In 2020, we also invested about NT$420 million in local investments. Besides continuously developing Taiwan, we also made the following achievements, including reducing electricity consumption by 1.67%, conserving energy by 1.28%, reducing carbon by 1.49%, and reducing water consumption by 3.62%.

Adhering to the belief in “one for all and all for one,” we fulfill CSR and have become a trusted and socially identified corporate citizen with high contribution. We believe that enforcing CSR, including and resolving topics that concern/interest stakeholders in management programs, including governance, industry safety management, environmental protection, and social relations, will be the only way to achieve sustainable development and fulfill world citizen responsibility.

 Brilliance CSR Performance in 2020

In 2020, we did a great job in ESG performance:

In operations, our 2020 EPS was NT$2.25, a new high over the last seven years. Under the influence of COVID-19 and the recovery of solar energy demand, a rally came after the fall. EVA/PE sales increased by 6% over last year to 270,920MT, also a new high in history.

In technology R&D, besides continuously developing high value-added and differentiated products, our new medical material ViviOn ™ (CBC) even won the 17th National Innovation Award. We also constantly implemented green design concepts to new product R&D, such as green fire-retardant materials, eco-friendly heat-shielding coatings, and recycling waste oyster shells.

In investment, the Fujian Gulei Refining & Petrochemical Project and Kaohsiung Intercontinental Container Terminal Project will help resolve the insufficiency of ethene supply and ethene storage capacity. The construction of the High-Value R&D Center started in Kaohsiung in December 2020, and the project is expected to be completed in 2021Q4 to develop process and product optimization and technology upgrading.

In industrial safety and environmental protection, we implemented the comprehensive industrial safety check, hired consulting companies to help review in-house problems, promoted the PSM, and won the model of outstanding underground pipeline management for five consecutive years. In management systems, we successfully implemented the ISO 50001 energy management system (EnMS) in 2019, continued to implement GHG inventory in 2020 according to ISO 14064 and version change into the ISO 45001 occupational health and safety management system (OH&SMS). We also applied to the Industrial Development Bureau (IDB) for smart chemical plant guidance and engaged in the R&D of various AI technologies to enhance energy management, industrial safety, and preventive maintenance to optimize industrial safety and environmental protection.

In social relations, we expanded the care for employee health, established the real-time encouragement scheme, and planned to improve the overall salary framework, resulting in the reduction of employee turnover (including retirees) by 12 persons in 2019 to only 20 persons in 2020. In charitable activities, we engaged in community epidemic control, enhanced contributions for local communities, cultivated education in the rural, practiced environmental protection, and constantly cared for the vulnerable and ecological education.

 Enhancing Employee Value with Smart Tools

To enhance the creativity and value of employees, we have engaged in smart tool development to accelerate information transmission between people and data and machine-assisted decision-making. While data volume in factory management has been increasing, nonstop accumulation of big data and experience is the key. Besides making the best use of past operating and management know-hows, we also upgrade the experience accumulated to management assistance. By implementing systems including the water information assisted system, data visualization optimization, energy management assisted system, we make more time for decision-making and understanding past operational trends and models to effectively set management targets and value in the future.

 CSR: Planning and Implementation

To fulfill CSR, we made reference to the UN Sustainable Development Goals (SDGs) to identify 9 SDGs according to the characteristics and regulatory requirements of the industry and drawn up short-, medium-, and long-term plans for corporate governance, industrial safety, environmental protection, and social relations. Apart from implementing them progressively in the next five years, we will extend them to all department goal management and gradually to the KPI establishment for personal performance.

Every year, we consolidate annual goals and achievements with the CSR report. With the recommendations for improvement made by the CSR Committee, we report the results to the BOD. Through the concerted effort of all employees, we achieved the goals and made achievements.

 Challenges and Opportunities in 2021

Although the macro environment of 2021 will be comparatively great to USI, as sufficient ethylene supply will gradually recover, the price drop is both an advantage and a hidden risk. That is, it is foreseeable that midstream and downstream ethylene products will increase significantly, particularly the low-price, downstream ethylene products made in North America dumping into the Asian market. Facing the challenges and opportunities in 2021, we need to grasp the timing to replace old equipment with new one, build the strategic production system, and differentiate pay/bonuses for employees to strengthen the entire corporate competitiveness for the future market stress.