CHENG LOONG

In 2024, the global economy is moving forward in a complex and ever-changing environment. The widespread application of artificial intelligence in manufacturing and services, the accelerated promotion of green energy technology, and the restructuring of supply chains have injected new momentum into the economy.

However, against the backdrop of geopolitical risks and economic pressures, the growth rates of major global economies have generally slowed down, facing numerous challenges. Meanwhile, the emerging markets in Southeast Asia have demonstrated strong growth resilience, providing a bright spot into the global economy. According to S&P Global’s forecast, the global economic growth rate in 2024 was projected to be 2.7%, slightly lower than the previous year’s 2.9%. In the past two years, domestic industries have faced severe challenges due to the global economic slowdown, the slower-than-expected recovery of the Chinese economy, and market uncertainties. The paper and paperboard market has also been under tremendous pressure. To respond to market changes, the company actively adjusts its internal structure, optimizes its product portfolio, and integrates resources.

In 2024, the domestic paper industry in Taiwan continues to face challenges of weak demand and destocking. However, the domestic market has gradually warmed up in the fi rst half of the year, and with the boost from the traditional peak season in the second half, the overall market conditions have stabilized. Domestic demand for packaging has seen a slight increase, but the export performance has not shown signifi cant improvement. The overall paper demand is still lower than in previous years, indicating uneven industry recovery and a chain eff ect on the packaging supply chain. According to the statistics of the Taiwan Paper Industry Association, the domestic paper production declined by 4.7% in 2024, and total sales decreased by 3.7%, with domestic sales growing by 2.8%, and exports falling signifi cantly by 13.7%. However, the production and sales of corrugated containers are driven by domestic demand, increasing by 5.9%. With the gradual recovery of economic momentum, the Directorate General of Budget, Accounting and Statistics, Executive Yuan estimates that Taiwan’s GDP growth rate in 2024 could reach 4.59%, higher than the 1.12% in 2023. This will bring more opportunities for the papermaking and paper packaging industry. The industry will continue to drive automation and digital transformation to enhance production efficiency and market competitiveness, further seizing the growth opportunities from the recovery of supply chains and a more stable market.

Facing the severe challenges of the 2024 market environment, the Company’s operations have been impacted by multiple factors, including weak end demand, industry inventory adjustments, and rising costs of international raw materials, energy, environmental compliance, and labor. As a result, overall performance has not met expectations. The Company’s papermaking business in Taiwan has adjusted its production plans in response to changes in market packaging demands. However, sales momentum has improved, and overall performance remains at a certain level. The corrugated converting business, on the other hand, is operating steadily, with production and sales scale comparable to last year, indicating that the market demand still has a certain level of support. The converting plants in China continue to undergo restructuring and streamlining, focusing resources on production and sales.However, the impact on operational performance is still significant due to the slow recovery of the local market. In Vietnam, the new production capacity of Cheng Loong Binh Duong Paper Co., Ltd. is performing steadily, with full production and sales. Despite intense competition in the local containerboard market, the operation of the two new converting plants has injected momentum into business development and supported the steady growth of the Vietnamese corrugated converting business. The Group’s annual revenue reached NT$45,177.69 million, an increase of 7.2% compared to the previous year. The net profi t after tax was NT$656.91 million, a decrease of 29.6%.