0. Operations & Prospects
Nan Ya Plastics
Operations & Prospects
March

1. Agenda
Page
Overview ‥‥‥‥‥‥‥‥‥‥‥‥‥‥ 2∼6
Strategy & Competitive Advantages‥‥‥ 7∼8
Operating Performance ‥‥‥‥‥‥‥‥ ∼10
Investment Income ‥‥‥‥‥‥‥‥‥‥
Capital Expenditure ‥‥‥‥‥‥‥‥‥
Capacity & Expansion ‥‥‥‥‥‥‥‥ ∼19
Financial Ratio ‥‥‥‥‥‥‥‥‥‥‥
Comparison of Top 5 Competitors‥‥‥‥ ∼24

2. Overview Highlights Member of the Formosa Plastics Group (FPG)
The 6th largest private company in Taiwan in terms of market capitalization
Annual revenue of US$ 7 billion with 4 major businesses: sales breakdown - 15% in plastics, 19% in electronic materials, 16% in fibers, and 47% in Chemicals
Market capitalization of US$ 23 billion
51 manufacturing plants in Taiwan, 23 manufacturing plants in China, 4 and 3 manufacturing plants in USA and Vietnam respectively.
Leading market positions
World’s #1 manufacturer of secondary plastics
World’s #1 manufacturer of copper clad laminates
World’s #3 producer of polyester fibers

3. Overview History
China
Investment
(Plastics)
2003
Vietnam
Investment
(Polyester)
Polyester
staple PU
leather PP
film
Glass fiber yarn,
cloth and POY
6th Naphtha
Cracker Project
1998
2007
BPA-4 & EG-4 startup
2009
Expanding scale of CCL in China
1969
1974
1981
1985
1994
1958
1971
1976
1984
1989
1995
2000
China
Investment
(Electronics)
China
Investment
(Polyester)
2004
2008
2010
China
Investment
(Chemicals)
Textured
yarn
PVC
Rigid
film
Incorporation
First PVC sheet
production
PCB
& CCL
Nan Ya America
established
Nanya
Technology established
Glass fiber-3 & Glass fiber cloth-3 in China startup
1950’s ’s : Production of PVC secondary plastics in Taiwan
1970’s : Began manufacturing polyester fiber, expanding scale and varieties of plastics processing products
1980’s : Entered electronics business, growth in polyester and plastics
1990’s : Plastics and polyester facilities in the US commissioned, manufacturing of plastics initiated in China, construction of specialty chemicals in No. 6 Naphtha Cracker Project completed, and subsidiary for DRAM manufacturing stated production
2000’s : Production facilities for electronic materials in China commissioned
2007’s : BPA-4 and EG-4 plant of the phase-four expansion project in Mailiao complex
started operation
2008’s : Glass fiber & glass fiber cloth of phase-three expansion in China started operation
2009’s : Expanding scale of CCL in China and started mass production in Hui Zhou
2010’s : Chemical products including BPA & DEHP investment in China

4. Overview Corporate Structure
Plastics I
Plastics
III
Chemicals II
Electronic
Materials
Engineering
Plastics II
Chemicals I
Chemicals
III
Polyester
Fibers
CCL
Epoxy Resin
Glass Fiber Cloth
Copper Foil
STN LCD
PVC Sheeting
Rigid PVC Film
PP Paper
PU Leather
PVC Pipes
BOPP Film
Engineering Plastics
BPA
1.4 BG
PVC Stablizers
Switching Gears
Rollers
Molding Equipment
Factory Equipment
SMC Doors
Vinyl Windows
Door Frames PA
2EH
DEHP
DINP
DIDP EG
Filament
Staple
Chips
Film
Dyeing
Finishing
Dry Film
Plastics
Chemicals
Electronics
Polyester
Others

5. Overview Subsidiaries

6. Overview Subsidiaries (Hong Kong)

7. Product Diversification
Strategy
Backward Integration
6th Naphtha Cracker
Polyester products (e.g. EG)
Electronic products
Secure stable and low cost raw materials
Product Diversification
High margin products
High value-added chemical & polyester fiber
Electronic products
Increase profitability and market share
Rising weight of chemical and electronic products to maintain profitability
Transform into Chemical and Electronic Products
Enhancing investment of chemical and electronic productions (e.g. MA, CCL (Kunshan) and Nan Ya PCB)
Support relocation of downstream customers and profit from rapid growth in China and Vietnam
Establish Production
Base in China and Vietnam
PVC sheeting, leather, pipes, fittings & PU leather
Electronic products
Polyester fiber
As a main product base, Taiwan mother company also formed as a R&D center, supporting required technology to overseas investee companies
Optical PET film for backlight module, anti glare PET film for LCD
Speciality chemicals (Nonyl Phenol free and 3P free Ba/Zn Stabilizer, IC Encapsulation Epoxy)
PCB material (A glass fiber desizing can improve the efficiency of the components of sizing, high thermal-conductive resin composition for PCB)
Strengthen R&D Capability

8. Competitive Advantages
Economies of Scale
World’s #1 manufacturer of secondary plastics and CCLs
World’s #3 producer of polyester fiber
Customer Oriented
Expansion in line with the needs of our customer and market
Backward Integration
Purchase PVC resin and PTA from FPC and FCFC
Self-production of EG, copper foil, glass fiber cloth, epoxy resin and DEHP
Purchase glass fiber from PFG
Completely backward integration from PCB to glass fiber in the world
Self-Sufficient in Power
Reduce manufacturing costs and secure power supply
Using Financial Strength
Lower cost and provide readily available financing
Internal Construction and Engineering Departments
Lower capital expenditures while integrating research with manufacturing to improve production efficiency and predictive maintenance
Focused Management
Long-term strategy with a flexible approach (TQC,TPM,ISO)

10. Operating Performance
Y2010 Result (Unaudited)
Y2010 operating profit was NT$ 26,491 million, up NT$17,781 million from NT$8,710m in Y2009 (+204.1% YoY); operating performances of major products:
Plastics: Y2010 operating margin 5.2%, slightly down YoY from 7.3% in Y2009.
Electronic Materials:
Y2010 operating margin 13.9%, up 7.0% YoY from 6.9% in Y2009
Benefiting from recovery in the electronics industry and raw materials price rise, prices of all electronic materials rose significantly
Strong demand helped to increase utilization rate and reduce unit fixed cost
Polyester:
Y2010 operating margin 10.9%, up 12.2% YoY from -1.3% in Y2009
Demand increase from cotton shortage, consumption power increase in China, in addition to product mix improved and portion of high value-added products expanded, for example, sales of polyester film which are applied to LCDs and solar panel increased significantly
Set up a performance improvement team to establish standard production lines by implementing strict problem solving with productions to increase efficiency and performance as well as to reduce cost.
Chemical Products:
Y2010 operating margin 16.0%, up 10.6% YoY from 5.4% in Y2009
With soaring ethylene price, plenty of maintenance in the industry, and strong demand from downstream polyester buyers, EG price rose significantly and operating margin could reach 30%+ in Y2010.
Profits from DEHP and BPA increased due to product price increase more than raw materials cost raised and better operating rate on the back of improving demand

13. Capacity/Expansion – Plastics
Unit: US$1,000

14. Capacity/Expansion - Plastics (China Investment Part I)
Unit: US$1,000

15. Capacity/Expansion - Plastics (China Investment Part II)
Unit: US$1,000

16. Capacity/Expansion – Polyester
Unit: US$1,000

17. Capacity/Expansion – Electronic Materials
Unit: NT$1,000

18. Capacity/Expansion – Electronic Materials (China)
Unit: US$1,000

19. Capacity/Expansion – Speciality Chemicals (Taiwan)
Unit: US$1,000

24. * Nan Ya’s EG capacity of 1,770 thousands tons per year is theoretical capacity. Actual EG capacity can reach 2,080 thousand tons per year。