swancor ind. co., ltd · estimated per mw of wind turbine uses 4.3 tons of resin, ... 38% of china...

Swancor Ind. Co., LTDSwancor Ind. Co., LTD

Copyright © Swancor All Rights Reserved1

Company ProfileCompany Profile

May 2016May 2016

DisclaimerDisclaimer

This document may be deemed to contain forward-looking statements. These forward-looking statements include, among other things, statements regarding future events and the future financial performance of Swancor that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results.

Any projections in the document are based on limited internal and external


Any projections in the document are based on limited internal and external information currently available to Swancor, which is subject to change. Actual events or results could differ materially and no reader of this document should assume later that the information provided today is still valid. Such information speaks only as of the date of this document.

Readers shall rely on self-judgment to makes any investment decision. Readers shall not interpret the information in this document to be investment recommendations.

VisionVision


Basic InformationBasic Information


Business Units and ProductsBusiness Units and Products

Swancor

Carbon Fiber New Energy


Fine Chemical

Anti-corrosion Resin

Wind Turbine Blade Shell

Resin

Other Materials

Carbon Fiber Composite

(Sunwell (Jiangsu) Carbon Fiber Composite)

New Energy Development

(Swancor Renewable)

Off-shore Wind Farm

(Formosa I)

Fine Chemical and Fine Chemical and


Composite MaterialComposite Material

Desulfurization tank uses around 20 ton of resin.

Wet electrostatic precipitator (WESP) tank uses around 30-80 tons of resin.

Chimney uses around 120-140 ton of resin.

AntiAnti--corrosion Resin in Power Plantscorrosion Resin in Power Plants

Desulfurization tan

k

Chim

ney


Desulfurization tan

k

AntiAnti--corrosion Resincorrosion Resin Major applications are anti-corrosion tanks and pipes for factories, desulfurization tanks, pipes,

chimneys for power plants.

Broad customer base. Sales through direct sales or distribution, lot by lot.

Major competitors are Ashland (US) and DSM (Holland),

2014 sales revenue was NT$ 2,248MN, 37.6% of total sales. Sales quantity was 24.8 thousand ton.

2015 sales revenue was NT$ 2,347MN, 24.3% of total sales. Sales quantity was 27.1 thousand ton.

2015 China market was about 70 thousand tons. Global market was about 250 thousand tons.Swancor sales quantity was about 11% of global market.

Major components:


Major components:

乙烯基酯樹脂

(Vinyl ester, VE)

環氧樹脂(Epoxy)

雙酚A（Bisphenol A, BPA）

環氧氯丙烷(Epichlorohydrin, ECH)

苯乙烯 (Styrene Monomer, SM)

乙烯(Ethylene)

苯 (Benzene)

甲基丙烯酸

(Methacrylic acid, MAA)

Wind Turbine BladeWind Turbine Blade

Swancor resin is used to make wind turbine blade shell. 1.5MW wind turbine uses around 6.5 tons while 2MW wind turbine uses around 9 tons.

Structure adhesive is another Swancor product under customer approving. The usage is about 1/10 of shell.

Wind turbine over 6MW might use carbon fiber composite to make spar. For wind turbine with 77.7 meter blade, total blade weight is about 27 tones and spar weight is around 4.3 tons, 16% of total weight.


Green Energy MaterialGreen Energy Material Most revenue of green energy is from wind turbine blade resin .

Major customers are China wind turbine blade makers, both domestic and international , total 17 companies. Sinoma Science & Technology (SZE: 002080)、Zhongfu composites and TPI Composites are some of the major customers.

Business is direct sales. Entry barriers in technical and customer are high.

Major competitors are Hexion (US), Dow (US), and, BASF(German).

2014 sales revenue was NT$ 3,438MN, 57.5% of total sales. Sales quantity was 28 thousand ton.

2015 sales revenue was NT$ 6,864MN, 73.6% of total sales. Sales quantity was 53 thousand ton.

Estimated per MW of wind turbine uses 4.3 tons of resin, 2015 China market was about 140


Estimated per MW of wind turbine uses 4.3 tons of resin, 2015 China market was about 140 thousand tons and global market was about 270 thousand tons. Swancor sales quantity was about 38% of China market and 20% of Global market。

Major components:風電葉片基體樹脂

(Resin of wind turbine blade)

環氧樹脂(Epoxy)

雙酚A

（Bisphenol A, BPA）

環氧氯丙烷(Epichlorohydrin, ECH)

硬化劑(Hardener)

New Markets, New Products of Fine Chemical New Markets, New Products of Fine Chemical

Further expanding anti-corrosion resin and wind turbine blade shell resin business into South-East Asia and India.

Structural adhesive

The most critical part of wind turbine blade.

Resin usage is about 1/10 of shell.

In the process of customer approving.


In the process of customer approving.

Carbon fiber composite

Resin of carbon fiber is Swancor’s existing business. New product line is carbon fiber composite.

Target applications are spar of wind turbine blade and car parts. International customers are evaluating Swancor products.

New factory was open on 2016/4/26.

OffOff--shore Wind Farmshore Wind Farm


Developer and Power PlantDeveloper and Power Plant

Taiwan Energy Market OutlookTaiwan Energy Market Outlook Total market

2015, total electric power was 40.6GW and electricity production was 258TWh.

2015, nuclear electric power was 5.14GW(12.7%) and electricity production was 36.4 TWh (14.1%).

Renewable energy

2015, total electric power was 4.3GW (10.6%) and electricity production was 10.4 TWh (4.1%).

2015, solar and wind electric power was 1.5GW in total, electricity production was 2.3 TWh.

2030, target of renewable electricity power is 17.3GW, electricity production was 40 TWh.


36TWh

39TWh

2030, target of renewable electricity power is 17.3GW, electricity production was 40 TWh.

New government set a more aggressive target for renewable energy to produce 50 TWh, or 20% of total electricity production, by 2025.

Offshore Wind Power in TaiwanOffshore Wind Power in Taiwan

In 2012, Bureau of Energy set a target to build 1,000 wind turbines by 2030.

In 2015, Bureau of Energy announced 36 sectors for off-shore wind farm developing.

Unit:MW

2016 2020 2025 2030

Off-shore wind turbine

8 520 3,000 4,000

Estimated market value (NT$ BN)

3 78 450 600


MiaoLi

x

Swancor OffSwancor Off--Shore Wind FarmShore Wind Farm

Swancor wind farm, Formosa I, located 2-6 kilo meters from Miaoli coast with 18-31 meters water depths. The location provides low risk and low cost advantages.

In phase I, Formosa I will build two wind turbines with 8MW capacity by 2016. In phase II, will build additional wind turbines with 128 MW total capacity by 2019.


Phase I

Structure of Swancor OSWFStructure of Swancor OSWF

Founder

NT$200 MN

Swancor

Swancor Renewable Formosa I

NT$ 855 MN


Wind farm developer

Swancor Renewable

Wind farm. Special purpose vehicle.

Formosa I

Perm

it

Fu

nd

ing

Bu

ild

Op

erate

Develop service

Business Model of Swancor OSWFBusiness Model of Swancor OSWF

Formosa I is a offshore wind farm, 95% owned by Swancor. The business model is:

Will generate revenue by producing electricity. In phase I, with 8 MW capacity, estimated average monthly revenue is around NT$12 MN to NT$ 14 MN.

The needed capital for power plant is enormous. Formosa I will seek international investors.

Swancor owner will be diluted to 10%-15% after phase II financial close.

Swancor Renewable is a developer, 100% owned by Swancor. The business model is :

Charge power company management fee in the developing stage.


Charge power company management fee in the developing stage.

After wind farm developed, receive success fee from power company. The industry standard for success fee is 4% to 7% of total investment, paid by milestones.

The management fee and success fee will be the operating income of Swancor renewable.

Basic plan and milestones

Swancor 4733Swancor 4733


FinancialsFinancials

Income StatementIncome Statement

NT$ Thousand


2016Q1 Income Statement 2016Q1 Income Statement


* ROE is annualized.

2016Q1 Sales Revenue by Product 2016Q1 Sales Revenue by Product


NT$

Mu

llion

2016Q1 Sales Revenue by Region 2016Q1 Sales Revenue by Region


NT$

Mu

llion

Balance SheetBalance Sheet

NT$ Thousand


2016Q1 Balance Sheet and Financial Indexes2016Q1 Balance Sheet and Financial Indexes


2016Q1 Cash Flow2016Q1 Cash Flow


Free cash flow = operating cash flow - investment cash flow

SWANCOR IND. CO., SWANCOR IND. CO., LTDLTD


Green Energy &Green Energy &EnvironmentalEnvironmental

ProtectionProtection

LTDLTD

Thank You!Thank You!

swancor ind. co., ltd · estimated per mw of wind turbine uses 4.3 tons of resin, ... 38% of china...

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