FEG creates momentum to become today’s paradigm of a premier global company
- For Far Eastern Group, change is the only constant in business, driving its expansion from traditional to hi-tech industries in the manufacturing and service sectors
Country Business Reports interviews and articles by Discovery Reports
It is rare to see a 70-year-old company that holds hundreds of assets spanning a wide range of industries making agile decisions and sprightly trade adjustments at crucial industry junctures, but Taiwanese conglomerate Far Eastern Group (FEG) proves it is possible. By taking suave business pivots, FEG creates momentum that overcomes challenges and transcends boundaries amid a perpetually changing world.
The company’s history, which is closely intertwined with people’s lives, is dotted with technological, cultural and social innovations that continually strengthen its core, expand its reach and push it to the top of its field. Unravelling the next 70 years of its development, FEG embraces modern aspirations and technological breakthroughs as it remains true to its founding spirit and values of prudence, diligence and trustworthiness.
“Change is the only constant in business,” says Douglas Tong Hsu, chairman and CEO. “For more than 70 years, we have flourished amid challenges. Through extensive partnerships, our businesses developed from traditional to hi-tech industries encompassing the manufacturing and service sectors.”
FEG holds a total of 249 companies covering the areas of communications and internet, retail and department stores, petrochemical and energy, polyester and synthetic fibre, cement and building materials, shipping, construction, hotels, financial services and philanthropic organisations. These 10 sectors boast assets amounting to NT$2.85 trillion or US$99.99 billion. FEG also has nine companies publicly listed in Taiwan and Hong Kong.
Starting with Taiwan as a sole focus, FEG expanded its reach into mainland China and Southeast Asia. It established operation sites in Japan and North America, and partnered with international companies such as INVISTA, DOW, DuPont, Mitsui, NTT DoCoMo, Freudenberg, Microsoft, Google and Amazon.
“We have expanded internationally,” Hsu says. “We have a big presence in Vietnam, and we are increasing our investments in the United States. We are becoming more global, so we are not only managing one region, we are diversifying into other regions, which is making life more exciting.”
Navigating a fast-changing world
With a bedrock of diverse development strategies and flexible management systems that will take the group to new peaks, FEG quickly adapts to the latest trends in digital convergence. Through its communications and internet business led by Far EasTone (FET), it consolidated its landline and wireless services to enter the era of broadband internet access. Through this, FEG hopes to provide integrated communications services and content that combine information, entertainment and transactions into one platform.
“The speed of 5G to communicate and to send information is incredible,” Hsu says. “Information that was generated in an hour before can now be received in two minutes. This additional speed gives us exponential potential. Electronics manufacturing is the core of Taiwan’s economy, and we are actively using 5G to promote smart applications. For example, FET co-builds with Delta Electronics and Microsoft for the first 5G smart factory in Taiwan. Secondly, FET introduces the first 5G telemedicine in a cardiology clinic in Taiwan. We actively assist rural areas to improve medical standards. We continuously re-diversify, re-change, restructure to use all of these additional inputs, and see how we can suit them to our needs.”
As the region continues to struggle through the challenges of the Covid-19 pandemic, FEG remains optimistic that its retail and department store business will pull through. Facing the challenging business environment, it continues to expand its retail stores. For example, FEDS Xinyi A13 and Zhubei Shopping Mall not only launched innovative and smart department store services, but the establishments also created a retro consumption environment showcasing local culture. At the same time, A-Mart also launched the new store model of wholesale 3.0 to enhance the consumption experience. With 47 outlets throughout Taiwan and mainland China, FEG integrates shopping, leisure, dining and culture in one experience as it also bolsters its e-commerce space.
“We have rebuilt and readjusted our retail businesses to fit today’s world because consumer needs and preferences change all the time,” Hsu says.
The concept of agility is ingrained in all of FEG’s companies – from its pioneering textile operation to the development of its petrochemical, cement and socially relevant foundations such as hospitals, schools and architectural projects. Its petrochemical and energy upstream business, for instance, began with the aim of supporting its chemical fibre line by ensuring a stable inflow of raw materials. Today, it focuses on developing speciality and environmentally friendly chemical products that accelerate its textile and apparel segments.
“Having completed the vertical line integration of our plant – from the raw materials down to the chemical compounds and textile, we can now provide a more thorough and comprehensive product line that is highly conscientious of its environmental impact,” Hsu says.
This consciousness to create products that support a more sustainable world extends to FEG’s cement and building material company Asia Cement. Producing more than 100 million tonnes annually, Asia Cement has garnered various management and environmental awards for its ability to balance resource protection and efficiency in the cement industry. To efficiently use energy and reduce production costs, the company applies waste heat to generate power. It also deploys electric dust collectors and significantly invests in green coverage improvements. Among the top five cement producers in China, Asia Cement has expanded into ready-mix housing and prefabrication materials.
Supporting FEG’s various segments in transporting materials such as cement, grain, coal and oil is subsidiary company U-Ming Marine Transport. U-Ming owns and operates Capesize, Post Panamax, Kamsarmax, Panamax, Ultramax and Supramax bulk carriers; cement carriers; Very Large Crude Carrier (VLCC) and Very Large Ore Carrier (VLOC), amounting to a total of 60 vessels totalling a deadweight of 8.39 million tonnes. With subsidiaries in Hong Kong, Singapore and Xiamen, China, it is the largest publicly listed bulk carrier company in Taiwan in terms of gross tonnage.
Underscoring actions that make the world better
More than surpassing milestones and outdoing itself time after time, FEG seeks to contribute more to society through a host of corporate social responsibility (CSR) programmes. Heavily involved in environmental, social and governance activities, FEG is particularly focused on recycling, reusing and reintegrating materials.
“We think and develop in a way where we consider solutions that do not bring unfavourable impact to the world,” Hsu says. “We work with partners, other companies and organisations to implement programmes that are socially conscious to make the world better.”
In 2012, FEG subsidiary Far Eastern New Century partnered with Ishizuka Glass to form the Far Eastern Ishizuka Green PET Corp (FIGP) – a recycled polyethylene terephthalate (PET) production line in Kanto, Japan. FIGP expanded its capacity this year to be able to process 90,000 tonnes annually. Moreover, the joint venture will build another plant in Hyogo prefecture, Kansai, which can accommodate 100,000 tonnes of recycled PET. To date, FIGP is the largest producer of recycled PET in Japan. It supplies food-grade packaging and fibre applications.
“The human conscience or focus is important to us, so CSR is definitely part of our direction and strategy, but in a competitive environment, we also need to make it sustainable,” Hsu says. “Since being carbon-neutral is the ultimate goal, we work closely with various stakeholders to study, discuss and work towards achieving this in a viable way.”
Teamwork and innovation at its core
FEG aims to be a consistent industry bellwether. To achieve this, it reorients its thinking and looks at each market differently. It is strengthening its innovation, human resources and research and development strategies by hiring the right people, developing specialists and promoting synergistic growth across its fields of expertise.
“We needed to learn quickly,” Hsu says. “Markets in China are different from Vietnam or the US and Europe. We need more intensive knowledge, diversification and understanding of the different parts of the world to serve them well. It is not easy, but part of the job is learning to adjust.
“My father, Hsu Yu-ziang, who founded the group, stressed the importance of duty, teamwork and trust within the central management. We abide by these up to now. In addition, we are also fortunate that the management teams share the same thought process, behavioural patterns and working modes physically, psychologically and intellectually.”
FEG is also augmenting its people management knowledge to be more oriented towards emerging economies, modern aptitudes and the latest technologies such as artificial intelligence, internet of things, and data fluency handling, among others.
“The world is moving so fast, and we are working hard to be quicker, nimbler, more highly adjustable in an organised, efficient and sustainable way,” Hsu says.