OUCC Transformed To Diversity, 50% Specialty Chemical By 2007
Transformation and diversification were two mostly mentioned words in the Shareholder’s Meeting of Oriental Union Chemical Corporation (OUCC) which was held on May 30, 2006. The OUCC management team has begun the program of transforming the company to a diversified chemical entity since 2005. Oriental Union will become a diversified chemical company with specialty chemical products including ethanolamines (EA), ethylene carbonate (EC), and other ethylene oxide derivatives such as sodium isethionate (SI) exceeding more than 50% of the total company sales revenues and profits by the end of 2007 as the construction of new specialty chemical plants is complete.
The persistently high crude prices have underscored the challenges in operation for petrochemical manufacturers due to increased raw material costs. Nevertheless, OUCC sustained to perform well in 2005 with record high total sales revenues of 11,003,756 thousand NTD, a 5 % increase from 2004, and net profits before taxes 2,855,005 thousand NTD, with one-quarter of those were coming from the specialty chemical business, a significant accomplishment through its strategy of transformation. EPS after taxes was 3.03 NTD, maintaining over three dollars per share for three consecutive years. The meeting has passed a dividend distribution of 2.3 NTD per share, with 2.0 NTD in cash and 0.3 NTD in stock.
The management team is committed to remain its current strategy Several investment projects including a second 40kt ethanolamine (EA) plant, ethylene carbonate (EC) plant de-bottlenecking, a new high purity ethylene oxide (HPEO) line, and a new sodium isethionate (SI) unit are currently either in the design or construction stages. OUCC will be the largest manufacturer for ethylene carbonate in the world and ethanolamines in Asia when EC and EA projects are complete in 2007, and both will plant solid foundation to signify its transformation endeavor.
OUCC will continue the R&D effort for cultivating value-added ethylene oxide derivatives and bio-chemicals with its new product development management system to optimize its overall effectiveness. In addition, our investment in new PTA plant of Shanghai Oriental Petrochemical Corporation (OPC), a joint venture with Far East Textile which has been successfully completed and started up in the first quarter of 2006, is expected to provide a good return in the future. In the mean time, OUCC continues aggressively to evaluate the possibility of building its second EO/EG unit and other specialty chemical plants.