Good Results on the Tough Operating Year
Transforming To a Specialty Chemical Company


The Shareholder’s Meeting of Oriental Union Chemical Corporation (OUCC) which was held on June 1, 2007 has passed a dividend distribution of 1.7 NTD per share, with 1.5 NTD in cash and 0.2 NTD in stock.

OUCC has performed well for the year of 2006. Three major businesses of OUCC maintained profitable despites of increased costs of feeding stocks through the entire year. The prices for MEG have sustained due to limited new capacity and increased demand from downstream textile makers. However, the profit from EG business was lower than 2005 because of the unusual high cost for ethylene. The industrial gases section sustained its profitability with stable production and customers demand. The profits from specialty chemicals hit record high because of strong demands from market and high unit utilization rate through operation improvements. The corporate total annual sales revenues were 10,679,156 thousand NTD in 2006. The operating profits were 1,854,326 thousand NTD and the net profits before taxes were 1,462,763 thousand NTD and EPS after taxes, 1.93 NTD.

More importantly, the strategy of diversification began to see its effects. The sales from specialty chemicals exceeded 30% of total revenues and the profits reached 40% of total incomes in 2006. This has been a significant milestone in our overall attempt to transform OUCC to a diversified but integrated chemical company with specialty chemical products exceeding more than 50% of the total company sales and profits. This goal will be fulfilled as the constructions of new specialty chemical expansions including ethanol amines (EA) and ethylene carbonate (EC) in 2007 and other planned EOD facilities in the following years are complete.

Business has jumped to a great start in 2007. The sales revenues grew 24% and the profits increased 26% for the first quarter, compared to the same period in 2006. The margin of business was raised because of lower ethylene prices and stronger market demands for both EG and Specialty chemicals.

Looking into the future, OUCC is committed to its growth through the following directions. Firstly, OUCC will continue to evaluate the feasibility of expanding its core chemical business including its second EO/EG unit and other specialty chemical plants in Taiwan if the ethylene supply can be secured as CPC increases its ethylene capacity. Secondly, OUCC is aggressively geared up its R&D efforts for developing and commercializing value-added ethylene oxide derivatives and bio-chemicals. In addition, OUCC is also actively seeking for the investment opportunities in China and/or Middle East if raw material supply can be realized.