Page 6 - Annual report eng 2020
P. 6
Tycoons Worldwide Group (Thailand) Plc.
TGE was approved to be incorporated by the Ministry of Economic Affairs under the
company law of the Republic of China on November 20, 1980. Its total registered capital
as of December 31, 2020 was NT$ 7,000 million, paid-in capital was about NT$ 4,798
million Currently, TGE’s main business is to produce annealed wire using wire rod, raw
material imported from TYCN. TGE also directly sells wire rods and annealed wire to
customers in the Taiwan market.
TGE currently has the production facility in Taiwan for production of annealed wire,
bolt and the only heat treatment facility in Taiwan for the screws. TGE also took the view
that there was further potential for upward integration in its industry. Thus, after
consideration, TGE established TYCN in Thailand as its production base for upward
integrated products (wire rods as well as annealed wires and screw and bolt). TGE chose
Thailand as a production base because Thailand is extremely competitive in terms of
logistics and manufacturing cost. TGE’s investment in TYCN is done through the TGI to
take advantage of advantageous tax treatment. TGE’s primary market is limited to
Taiwan to avoid so-called cannibalization within its group of companies. In accordance
with company policy, management and operation of TGE and TYCN are clearly
separated, and the two management teams are independent each other, in order that each
company is acting in its own best interests.
1.4 Relationship with the business group of major shareholder
Currently, TYCN’s largest customer in Taiwan market, including wire rod and annealed
wire, is Tycoons Group Enterprise (TGE), TYCN’s indirect majority shareholder via
Tycoons Group International Co., Ltd.(TGI), (TGE holds a stake of up to 100% in TGI and
TYCN is a 70.30% owned subsidiary of TGI). TYCN’s sales to TGE accounted for 4.73%
of TYCN’s total International sales in 2020, mainly due to the fact that TGE is TYCN’s
agent who is in charge of business development and marketing in Taiwan, which allows
TYCN to rapidly react to the demand and prices in Taiwan market. Therefore, the business
relationship between TGE and TYCN will be able to stay mutually beneficial.
In accordance with company policy, management and operation of TGE and TYCN are
clearly separated, and the two management teams are independent each other, in order that
each company is acting in its own best interests.
2. Nature of the business
Revenue structure
Product 2020 2019 2018
MB % MB % MB %
Domestic Sales
1. Wire rod (including reinforcing bar) 3,804 63.54 4,244 44.38 4,745 45.82
126
99
2. Annealed wire 18 2.11 83 0.87 42 0.96
22
3. Fastener
0.30
0.23
0.41
4. Others 481 8.03 2,547 26.64 1,007 9.72
Total domestic Sales 4,429 73.98 6,896 72.12 5,893 56.90
International Sales
276
99
1. Wire rod (including reinforcing bar) 11 0.18 816 1.04 1,119 2.67
8.53
7.52
2. Annealed wire
10.81
450
3. Fastener 986 16.47 1,589 16.62 2,070 19.99
4. Others 111 1.85 162 1.69 998 9.64
Total International Sales 1,558 26.02 2,666 27.88 4,463 43.10
Total Sale 5,987 100.00 9,562 100.00 10,356 100.00
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