Taiwan’s Far Eastern Group continues to lead in 10 major industries as it evolves business approach
Now into its 65th year, FEG is planning for the next 60 years by welcoming a range of new opportunities and entering more strategic partnerships in Asia-Pacific
Country Business Reports interviews and articles by Discovery Reports www.discoveryreports.com
How does a giant such as the Far Eastern Group (FEG) continue growing bigger, smarter, better? By transcending boundaries – from the geographic to the technological, cultural and social – then finding better ways to outdo itself over and again, while contributing to a society whose fabric has been enriched by FEG’s diverse industries, innovations and enduring aspirations for more than six decades.
FEG is a leader in 10 major industries ranging from petrochemicals and energy to textiles, cement, construction, retail, finance, transport, telecommunications, hotels and philanthropy. About 250 companies are affiliated with the group, nine of which are publicly listed with more than US$75.8 billion in total assets and US$18.7 billion in annual revenues.
Frontrunners in their respective industries, Far Eastern New Century (FENC), Asia Cement, Far Eastern Department Stores, Far Eastern International Bank, U-Ming Marine Transport, Oriental Union Chemical, Everest Textile, Far EasTone Telecommunications and Asia Cement (China) Holdings have a total of more than 600,000 shareholders.
“Behind these figures is a commitment to constantly create new value for shareholders, customers and partners,” says chairman and CEO Douglas Tong Hsu. “Far more important than surpassing such achievements, however, is staying true to our dedication to enhance harmony between people and the environment, among our people and across the globe.”
Hsu has not only upheld the rich legacy handed down by FEG founder Hsu Yu-ziang, who built the group’s foundation from a textile manufacturer in Shanghai; he was able to build on it by adding one vital principle to the group’s founding motto. From “sincerity, diligence, thrift and prudence”, the younger Hsu added the principle of innovation to empower the group in adapting and evolving in a perpetually changing world.
These principles are ingrained in the group’s more than 58,000 highly trained workers in more than 10 key markets, including Vietnam, Singapore, Malaysia, Thailand, Taiwan, Hong Kong and mainland China, where it has grown intensely in the past decade.
“Scientific and technological innovations create business opportunities and global competition,” Hsu says. “Together with the ability to overcome challenges, innovation fuelled FEG to reach its current scale – and we believe it will continue to drive our goals as we take bigger leaps and break harder barriers.”
Weaving closer threads into the fabric of cross-strait relations
One barrier that FEG has been making steady progress with overcoming is that of the intricate trade relations with mainland China, which remains Taiwan’s biggest import and export partner. The group has made extensive investments in the polyester industry, the petrochemical industry, cement production and retail in mainland China, and its companies are all leaders in their respective sectors.
“We have grown quite rapidly in the past decade, and the penetration on the mainland, in particular, is intensive,” Hsu says. “We have been quite fortunate that we have stayed on top in all our sectors from textiles to cement, retail, banking, shipping sector and telecom.”
FENC stands out among FEG’s most successful companies in mainland China. Keeping its lead in the textile industry where everything began for the group, FENC started with spinning and weaving. It later expanded to its upstream polyester synthetic fibre line. The company was the first of its kind in Taiwan to employ vertical integration in its production processes, and accounts for nearly 30 per cent of the group’s total revenues.
Today, FENC ranks among the top five polyester manufacturers in the world, boasting an annual capacity reaching 2 million tonnes of polyester. Having produced cotton, industrial fabrics and apparel in mainland China since 1997, the company has become the supplier of choice for many global brands due to its efficient vertically integrated processes and advanced research and development (R&D) capabilities.
Asia Cement Corp (ACC) has also made a name for itself among modern cement enterprises in mainland China, where it ranks 12th in terms of production capacity. ACC continues to raise its production capacity and keep growing through mergers and acquisitions (M&A) as the company aims to reach mainland China’s top 10 cement manufacturers while upholding FEG’s principles.
This objective is based on the company’s “Three Highs, One Low” concept geared towards sustainable development, underscoring “high quality, high level of environmental protection, high efficiency and low cost”.
“We believe that industrial development can go hand-in-hand with environmental protection,” Hsu says. “Once again, innovation is key to achieving this – as our plants throughout China and Asia demonstrate.”
Asia Cement effectively saves energy using state-of-the-art rotary kilns with preheater and precalciner, together with waste-heat recovery power generator technology. It also ensures that dust emissions remain well below the national standards, using dust collection equipment that efficiently controls emissions.
Investing in the region’s manpower and material resources in sewage treatment, mine reclamation and environmental beautification, Asia Cement has also preserved and restored all types of native plants. Its successful reclamation of the mines in the factories’ surrounding areas was recognised by the government and various organisations, making Asia Cement a distinguished role model locally and globally.
“We have been active on the mainland for nearly three decades, but we admit that we have yet to fully understand its rapidly evolving market,” Hsu says. “Being committed to our customers and partners in the region, however, means we will never cease to learn and adapt to their needs.”
Evolving towards specialised, sustainable enterprise
Apart from pursuing a larger presence globally, FEG is intent on making a broader difference in the lives that are touched by its products and innovations every day.
“We are internationalised; we are transparent. Our corporate governance is stringent, and therefore, we have a good base to expand and go into bigger areas,” Hsu says. “A relentless quest to improve our processes, products and services backed by robust R&D guides us in discerning the way forward.”
FENC, for example, continues to set the bar higher in technologically advanced polyester polymer and polyethylene terephthalate resin products such as solid-state polymer products and other speciality textiles that incorporate microfibres, high-denier industrial yarns and polytrimethylene terephthalate yarns. Responding to changes in market demands, it has broadened its range from wearable fibre spinning to polyester staple fibre for non-woven application – used in increasingly diverse fields including medicine, hygiene, agriculture, electronics, automotive and environmental protection.
Under its filament SBU division, FENC also develops functional eco-fibre types such as polyester recycled filament, quick-dry, antibacteria, far infrared, UV-cut and flame-retardant fibres. These specialised products are quickly gaining attention in the global scene, particularly from athletic wear companies and sporting events including the Fifa World Cup and the Olympic Games in the past decade.
“There was a time when everyone wanted only cotton. With the advent of functional textile, the focus has shifted to specialised performance, and there is hardly any cotton used anymore,” Hsu says. “That is how the market changes, and we make sure we are always on our toes to meet such transformations.”
FEG, however, is a bit more cautious in further expanding in mainland China’s retail space. With nine retail business units in mainland China, the group noted that the rapid construction of shopping malls in the past decade may potentially pose a challenge in overcapacity.
“In the long run, the capacity can all be consumed, but the problem is in the short run where too much construction exceeds the demand,” Hsu says. “This goes to show how practising caution and restraint can be just as important as moving aggressively when responding to fast-changing situations.”
The next 60 years and beyond
Now into its 65th year, FEG is setting the pace for the next 60 years by welcoming great possibilities and unprecedented opportunities.
In addition to organic growth, another way FEG aims to achieve its ambitious objectives is through M&As, which have propelled many of the group’s expansion and development efforts locally and overseas. The group also eyes a stronger base and more strategic partnerships in Asia-Pacific, where it has production bases in Singapore, Malaysia, Thailand and Vietnam.
“The world is changing so fast that we never had most of the challenges many industries are facing today, such as raw material and crude oil fluctuations or China’s excess capacity,” Hsu says. “Operating in this kind of a mould is a tremendous challenge, so we need to adjust ourselves to handle this type of introduced structure. More than ever, we have to be flexible, mobile and open to broader, deeper relationships so that we can adjust accordingly to every dynamic situation.”
Complementing these business strategies are equally high-impact initiatives rooted in FEG’s commitment to social responsibility. These include group-wide programmes under the Far Eastern Memorial Foundation and the Far Eastern Medical Foundation, which nurture young minds and enhance the quality of life of FEG’s beneficiaries.
“Ultimately, change begins with us as well,” Hsu says.
“There is nothing to be lost with investing in better lives and a brighter future, which we hope will be part of FEG’s legacy in the next 60 years and beyond.”
Far Eastern Group