Strategies and Targets

2022 Performances and 2023 Targets

Note 1:The business target for 2022 was Premium Steel products/Advanced Premium Steel products steel shipments. The target was changed to sales according to the resolution of the 121st TQM meeting.

Note 2:Considering the original target was comparatively conservative, in the middle of 2022, the target was raised from 4.03 billion TWD to 5.089 billion TWD in response to the change in market conditions.

Note 3:Shipments of steel products did not reach the goal due to the poor global environment with most customers holding a wait-and-see attitude and prioritizing inventory digestion. Customers only made purchases as needed, and it resulted in a decrease in purchase orders and shipments. Advanced Premium Steel product shipments (including percentage) did not reach the goal due to poor market conditions that made it hard to receive purchase orders for high-end steel products. The continued decline in prices also reduced the profits of Advanced Premium Steel products. Carbon emission intensity did not reach the goal due to the market situation and the decrease in crude steel production, which resulted in low equipment utilization.

Annual Business Directives and Performances

Implementation results for 2022 include the 4 main points as follows:

Business Directives

Premium Steel, Strong Resilience Energy Conservation and Carbon Reduction, Circulation and Sustainability Smart Steel Mill, Transformation and Upgrade Green Energy Business Opportunities, Breaking New Ground

Performances

The Company announced two themes for business development, to become "a steel mill that provides premium products and services" and "develop the green energy industry," in order to lay the foundation for sustainability in the next 50 years. We plan to develop premium steel products with "high technology content, high profitability, and high industry benefits" with the goal for such products to account for 10% of overall product sales in 2025, and further reach 20% in 2030. In 2022, CSC achieved excellent performance by delivering 4.292 million tonnes (the goal was 4.34 million tonnes) of Premium Steel products, accounting for 55.8% (the goal was 50%) of overall sales; CSC delivered 527 thousand tonnes (the goal was 650 thousand tonnes) of Advanced Premium Steel products, accounting for 6.8% (the goal was 7.5%) of overall sales. CSC's delivery of steel products reached 8.59 million ton (9.64 million tonnes targeted) in 2022. CSC will continue to implement marketing strategies, such as setting product prices close to market prices, acquiring new customers, and developing new markets. CSC continued to promote “cost reduction and profit increase activities,” linked together internal and external R&D resources through open innovation, accelerated the development of highly competitive products, low cost process and value-added applications, to improve the price-performance ratio and create differentiated competitive advantages for products. The original goal for 2022 was set at 4.03 billion TWD, but it was relatively conservative and after a change in market conditions occurred, the goal was revised in the middle of the year. Departments thus set new goals that are reasonable and challenging based on the production plan in 2022. The number of cost reduction projects company-wide increased from 450 to 511 in 2022, and the target amount was raised from 4.03 billion TWD to 5.09 billion TWD. The revised target amount for cost reduction and profit increase projects in 2022 was used for review starting in June. In 2022, CSC reduced costs by 5.99 billion TWD, representing a 118 target achievement rate. Further improvement of labor safety: CSC will further raise workplace safety awareness among contractors, conduct effectiveness audits, engage in labor safety exchanges within the group, and implement mid-term and long-term plans for road traffic safety inspections, achieving the goal of 0 major occupational accidents in 2022. The actual emission emission intensity this year was 2.330 tonnes CO2e per tonne of crude steel (did not reach the standard). With its ongoing efforts to reduce pollutant emissions and commitment to circular economy, CSC plans to incorporate carbon intensity in its business targets to demonstrate its determination to reduce carbon emissions.