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Downstream Operations

Downstream Operations

DOWNSTREAM OPERATIONS

Being responsible for stable domestic oil and gas supply

Importing & Refining

As Taiwan’s domestic production of crude oil yields only extremely low volumes, CPC needs to import virtually all of the crude it refines to supply its domestic market. To ensure stability, CPC works to both maximize procurement on long-term contracts and to diversify its sources of crude.

Imports in 2020 amounted to 128.4 million barrels; of that total, 50.39% came from the Middle East, 41.33% from the USA, 8.28% from Africa. In recent years, imports of low-sulfur crude have been maintained at a set ratio of the total to enable compliance with Taiwan’s ever more stringent environmental protection standards.

To import crude oil, CPC has installed offshore mooring pontoons for unloading large oil tankers: at Shalun in Taoyuan and at Dalinpu in Kaohsiung. The company has also built dedicated tanker loading/unloading berths in the ports of Kaohsiung, Taichung and ShenAo.


Quality and output value increase

CPC now operates two refineries in Taiwan — at Taoyuan and Dalin— with a combined daily refining capacity of 600,000 barrels of crude. Under government policy for industry relocation, Kaohsiung Refinery, an integrated refining and petrochemical production and storage complex with a daily refining capacity of 220,000 barrels of crude as well as 500,000 tons of ethylene annually, ceased operations in late 2015. Upon closure, its refining activity was transferred to the expanded Dalin refinery and its ethylene production to the then new Third Naphtha Cracker in the Linyuan Petrochemical Complex.

The Dalin Refinery became operationally independent from the Kaohsiung Refinery in 1996. After expansion, there are 4 offshore mooring buoys as well as large and small wharves for handling both imports and exports, holding the daily capacity of up to 400,000 barrels of crude now. The Taoyuan Refinery came on stream in 1976; after engineering modifications and the addition of the second topping unit, its daily refining capacity now amounts to 200,000 barrels of crude. In 2020, the total of refined products was 8,256 kiloliters of gasoline, 1,715 kiloliters of aviation fuel, 5,558 kiloliters of diesel, 2,245 kiloliters of fuel oil, and 367 kiloliters of LPG.

Taiwan’s increasingly stringent standards of environmental protection are largely in response to the demands of its people out of concern for their quality of life. At the same time, they exhibit increasing demand for a diverse range of oil-derived products and CPC has moved to enhance the quality of those goods and increase their value. Going further, the company has, in recent years, raised the production value of its products by building additional and more technologically-advanced refining facilities such as reforming units, isomerization units, and gasoline/diesel desulfurization plant, an aviation fuel processing facility, together with n-alkane, alkylation and residual fluid catalytic cracking (RFCC) units. CPC also plans to build VDU, SDA units and aromatic hydrocarbon extraction units in order to offer domestic consumers even better products and improve its production efficiency.


High value refining Reduced emissions

In response to the EPA’s call for certain reductions in the area of fuel quality in 2011: of the sulfur content of gasoline and diesel fuel to under 10ppmw, of the aromatic hydrocarbon content of gasoline and diesel fuel to 35vol% and of the alkene content of gasoline to 18 vol%, CPC constructed a 30,000 barrels per day gasoline pyrolysis and hydro-desulfurization unit at the Taoyuan Refinery by 2008, a 20,000 barrels per day gasoline pyrolysis and hydro-desulfurization unit at the Dalin Refinery by 2009 and a 40,000 barrels per day diesel hydro-desulfurization unit at the Dalin Refinery by 2010. Furthermore, an 18,000 barrels per day gasoline pyrolysis and quality improvement unit was moved in 2011 from the Kaohsiung Refinery to the Dalin plant.

In 2006, CPC began increasing its heavy oil conversion rate by construction of RFCC unit with capacity of an 80,000 barrels per day at the Dalin Refinery and completed its testing and kicked off its volume production in 2013. Olefin produced by the RFCC unit in the Dalin Refinery after completion of the construction can be not only be provided to downstream businesses of the industry directly, but also used as the raw material of alkylated gasoline. CPC completed testing of the unit and kicked off its volume production in the mid 2013; its operation has increased the value of our product and improved gasoline quality. In addition, to cope with the problem of acid gas generated in the production process and reduce the emission of the pollutant, CPC invested in the construction of a sulfur plant with a daily output of 250 tons, which started to produce qualified sulfur products at the end of June 2014.

In addition, CPC carried out an expansion of the No. 3 Hydro-desulfurization Unit at the Dalin Refinery to increase its high-sulfur crude refining capacity which increased from 30,000 to 40,000 barrels per day, lower the cost of crude oil procurement cost and stabilize the quality of the RFCC-unit’s feedstock. The expanded unit began production in March 2017.

To cope with the consequences of the Kaohsiung Refinery closure, the Dalin plant’s capacity was expanded with the following: a 150,000 barrels per day atmospheric crude oil distillation unit (CDU), a 50,000 barrels per day light crude fractionating unit (CFU), a 40,000 barrels per day diesel hydro-desulfurization (DHDS) unit and a 30,000 barrels per day kerosene hydro-desulfurization (HDS) unit. These units completed performance testing and began mass production in 2018, in so doing eliminating worries about shortage of the raw materials (due to the closure of the Kaohsiung Refinery) needed for the future survival and development of Taiwan’s petrochemical industry. With the completion of that expansion project, the 100,000 barrels per day No. 9 Topping Unit at the Dalin Refinery, which had been operating for some 40 years, was shut down. The capacity of the Dalin Refinery was boosted from 300,000 barrels per day to 400,000 barrels per day at present, raising CPC’s overall daily crude oil refining capacity to 600,000 barrels per day.

To improve the refining configuration of Dalin Refinery, meet the standards of marine fuel oil for IMO 2020, and increasingly strict requirements imposed by domestic environment regulations for emissions of air pollutants and strengthen our competitiveness in asphalt market, CPC plans to construct a 30,000 barrels per day vacuum distillation unit (VDU) and a 8,000 barrels per day solvent deasphalting (SDA) unit at Dalin Refinery along with Polymer-Modified Asphalt and asphalt cutback production facilities, asphalt storage facilities, an asphalt blending system, revamping of No.9 diesel hydrodesulfurization unit, and associated equipment. CPC aims to increase its competitiveness in oversea and domestic market by these efforts.

As the awareness of environment protection public and concern of air pollution in our society, the Environment Protection Administration (“the EPA”) has enforced stricter standard for automobile gasoline; since July 1, 2020, benzene levels in petroleum have to be gradually reduced from 1.0 vol.% to 0.9 vol.%. The EPA plans to reduce benzene to less than 0.8 vol.% in future. In response to energy transition and the regulatory limit for benzene content of gasoline, CPC first invested in the project of creating a 0.3 wt. % ultra-low sulfur fuel oil and asphalt cutback production center. In 2020, it came up with the investment plan for production of gasoline with reduced benzene content and high quality products. The company will build a unit for extraction of aromatics content from pyrolysis gasoline with capacity of 32,000 barrels per day (including aromatization unit) and its accessory equipment, including storage tanks and public systems, in order to make its gasoline products comply with regulatory requirements and increase CPC’s competitiveness in domestic and overseas markets.

 


CPC in Petrochemicals

CPC’s major petrochemical production facilities are its Linyuan Petrochemical Plant run by the Petrochemical Business Division as well as the Taoyuan and Dalin refineries operating under its Refining Business Division. The RFCC units in two refineries in Dalin and Taoyuan can produce propylene products, and the naphtha crackers and butadiene extraction units of Linyuan Petrochemical Plant can produce ethylene, propylene and butadiene products. Aromatics extraction units can produce benzene, toluene and mixed xylene. Currently, CPC’s annual production capacities for basic petrochemical raw materials are 1.07 million metric tons of ethylene, 1.194 million tons of propylene, 158 thousand metric tons (KTA) of butadiene, 274 KTA of benzene, 321 KTA of toluene and 507 KTA of mixed xylene.

As a pioneer of the upstream petrochemical business in Taiwan, CPC has continued to invest in a variety of upstream petrochemical businesses to drive development of domestic petrochemical industry, which has in turn contributed to economic miracle of Taiwan. In recent years, it has been dedicated to equipment upgrade and capacity expansion in order to reduce the shortage of petrochemical raw materials supply. Starting in 2005, CPC implemented the project of “New No. 3 Naphtha Cracker” in Linyuan Petrochemical Complex, with total investment of over NT$40 billion. This new No. 3 Naphtha Cracker started to produce ethylene that meets specific standards in 2013 with ethylene capacity of 720 KTA, propylene capacity of 370 KTA and butadiene capacity of 100 KTA. It is a supplier of petrochemical raw materials to both downstream businesses in Linyuan Industrial Park, and businesses in Renda Industrial Park, whose supply was originally provided by the No.5 Naphtha Cracker, creating economic benefits that worth NTD 60 billion per year. In the future, CPC will continue to take the advantage of its new production processes, low energy consumption and economies of scale for our crackers to ensure sufficient supply of basic petrochemical raw materials to downstream customers.


Refinery-petrochemicals integration Industrial transformation

In response to the growth of global electric vehicles market and support government’s energy transition policy, CPC has conducted integration of its refining and petrochemical businesses, and has reduced its production of gasoline and diesel and has produced more chemicals. In addition, CPC has reduced the severity of pollution from the plants and has decreased energy consumption of its operations and has strengthen safety at its facilities through supply of raw materials among different business units and the plan to create synergy of its resources and public facilities through high-degree integration.

CPC organizes and supports the circular economy to create a win-win situation

In the face of the challenges posed by climate change and depletion of natural resources, CPC actively follows the government’s “Circular Economy” Policy by turning petrochemical by-products used as fuel or previously regarded as industrial waste into value-added products. CPC aims to create a win-win situation between economic development and environmental protection by adhering to the principles of sustainable operations – also an important element in its efforts to surmount the challenge of industrial transformation.


Marketing CPC Petroleum Products

CPC’s sale of refined petroleum products in its domestic market is primarily focused on the transportation sector – specifically the gasoline, diesel, fuel oil and aviation fuel. In 2020, its sales of those products in Taiwan totaled 16,982 kiloliters in volume and generated revenue of approximately NT$282.2 billion. Automotive gasoline accounted for the largest share at approximately 58.1%, followed by diesel at about 26.0%, fuel oil at about 10.1% and aviation fuel at around 5.8%.

Taiwan’s internal market of refined petroleum products has two major players, CPC and the Formosa Plastics Group. CPC has worked hard at leveraging the advantage of its marketing network to maintain its market share by maintaining the business performance of its gas station network: As of the end of 2020, of the 2,494 gas stations in Taiwan, 616 were directly run by CPC, 1 was jointly run by CPC and another party, and 1,281 were privately-owned by CPC franchisees, adding up to a total of 1,898. Their sales as a part of the total market volume break down as gasoline 79.5%, diesel 77.4%, fuel oil 94.9% and aviation fuel 63.6%, with the overall market share being 78.9%.


Improving storage and transportation to meet the needs

In terms of the storage and transportation, CPC not only runs its gas stations, but also operates aviation fueling stations at all of Taiwan’s airports - Songshan, Taoyuan, Kaohsiung, Taichung, Hualien, Taitung, Kinmen, and Penghu. Around the coast, it has marine bunkering stations for international vessels at Keelung, Suao, Taichung, Kaohsiung, and Hualien ports.

As of the end of 2020, CPC operated 14 product distribution centers, located country-wide at Keelung, Shimen, Hsinchu, Taichung, Taichung Harbor, Wangtian, Minxiong, Tainan, Fengde, Qiaotou, Suao, Hualien, Huxi, Kinmen. They supplied products to gas stations in their surrounding areas with a total of 19,826 kiloliters of product over the course of the year. It has three chemical analysis centers/petroleum laboratories in Keelung, Taichung and Kaohsiung, plus six testing laboratories, which are in charge of testing products for quality control and altogether handled 28,738 samples in 2020. The transportation department transported 12,291 kiloliters of oil in 2020, and the mileage was 20,856,000 kilometers.


Mobile payment, optimization of services

In terms of gas station operation, CPC is unquestionably the market leader by virtue of offering the consumers superior-quality services across the board, that differentiates it from its competitors. The company further leverages its service advantage by implementing total customer experience management: having created and maintained the culture of hygiene of lavatories; vigorously promoting VIP membership cards; introducing new business lines and services in line with contemporary trends; and reinforcing customer relationship management. CPC has taken the lead in offering card-based self-service refueling as a means of lowering operating costs and working around the difficulty of recruiting filling station attendants; at the same time as it has promoted this multi-service business model featuring a diversity of offerings, the company has boosted non-operating income by strengthening cross-industry alliances.

Because of the popularity of mobile payments, CPC introduced and promoted contactless payment (Near-field Communications, NFC) in June 2018. With a view to optimizing the program of Mobile payment, strengthening the loyalty of VIP membership, integrating the payment tools and so on, CPC’s own payment tool, CPC Pay, was released on November 12, 2019, and it can be considered as the pioneer of exclusively designed for making payments at gas stations. “CPC Pay” combines diverse functions such as payment, VIP membership services, special offers, services related to vehicle use, such as query of parking lot, gas station, fuel price and eTag toll fee. Users can grasp a variety of information efficiently by “CPC Pay”, and the value of CPC and satisfaction and loyalty of consumers are improved.

In order to provide customers a variety of way to pay, customers of CPC gas stations are able to use Line Pay, Line Pay Money, Pi Mobile Wallet, JKOPay, O’Pay, GAMA PAY and the third-party payment service for e-payment transactions at the full-service areas since July 15, 2020. CPC provides more convenient petrol-filling service to its customers with wireless barcode reader, which allows customers to accomplish the payment without leaving their cars.

In order to improve user experience of CPC Pay, customers have been able to add VISA/MasterCard/JCB credit cards to their CPC Pay since December 29, 2020. CPC has kept optimizing the functions of CPC Pay and launched the promotion campaigns that features its use in order to increase customers’ willingness and in turn forge brand identity to its customers.


Drive Thru Coffee fragrance fills the air of the community

The multi-service business model for gas stations comprises the provision of car-washing, quick maintenance, CUP&GO coffee, on-site convenience stores and the sale of superior-quality automotive and consumer products. In a proactive response to the government’s policy for establishing environmental protection energy applications, CPC has established 558 battery-charging and battery-switching stations for electric motorcycles in the past three years. It plans to establish more such stations and increase the number of the gas stations that sell coffee in 2021. Currently, coffee is served at a total of 29 gas stations. Sales of a range of CPC products through the gas stations in 2020 included 2.1 million bottles of Kuo-Kuang brand intake-system cleaner for motorcycles, automobiles and diesel vehicles; 0.77 million bottles and 0.17 million bottles of See Clean Eco-Friendly Laundry and Dishwashing Detergents, a record-high 0.134 million mooncake gift boxes and over 0.16 million cups of coffee. Revenues from car washing and quick-maintenance services also set new highs. Overall gross profit from these diverse operations exceeded NT$1.28 billion for the year, abundantly manifesting both the value of CPC-branded gas stations as a sales and marketing channel and the fact that their range of services meets with customer approval.

In regard to customer service, CPC set up the 0800-036-188 customer hotline in 2000 for coordinated handling and response of customer issues after integration of a variety of professional services provided by different internal units. The 1912 CPC service hotline came into use in 2011, English service was added in 2020 and Taiwanese service in 2021, expanding the company’s window for communication with the public.


Excellent results in promotion of green architecture

Within the global trend towards environmental protection, there is now an emphasis on constructing buildings in a way that serves the cause of sustainability. variously termed “ecological buildings” in Japan, “eco buildings” or “sustainable buildings” in Europe and “green buildings” in the USA and Taiwan. No matter how you name such buildings, they all aim to protect ecological systems, encourage a mutually beneficial relationship between the structures and the environment, conserve energy and reduce both pollution and the overall environmental impact. These sustainable design and green concepts align with CPC’s dedication to achieving sustainability in its operations. CPC launched a program to green its gas stations in 2013. As of December 2020, 65 gas stations had received “green building” certification.


Natural Gas

CPC’s promotes natural gas as the fuel of the future in keeping with Taiwan’s policy aim of energy diversification. It is based on its inherent advantages in terms of high thermal efficiency, low pollution profile and convenience for safe handling. A new era of clean energy for Taiwan was ushered in with the completion of the country’s first LNG receiving terminal in Kaohsiung’s Yongan District in 1990. To cope with growing demand, its capacity was later boosted to 4.5 million tons annually; and a second-phase expansion project was completed in December 1996. A third-phase expansion project to satisfy demand from independent power producers (IPP) as well as consumer and industrial end-users in northern Taiwan commenced in July 1996. In addition to terminal-area expansion, this involved laying a 36-inch diameter, 238 km long undersea pipeline from the Yongan plant to Tongxiao. Its completion in December 2002 expanded CPC’s annual LNG handling capacity to 7.44 million tons.

Building out Taiwan’s natural gas production, transmission and storage infrastructure

Taiwan’s aforementioned second LNG receiving terminal is sited close to Taichung’s Port West Pier 13 and the hinterland. With the primary purpose of supplying natural gas to Taiwan Power Company’s (Taipower) industrial firms and household users in central and northern Taiwan, CPC built an annual LNG handling capacity of 3.0 million tons, three LNG storage tanks each of 160 thousand-kiloliter capacity; gasification and gas supply facilities; and a 135-kilometer, 36-inch sea long-distance gas transportation pipeline from Taichung Harbor through the Tongxiao distribution center to the Datan metering plant. This plan was launched on July 13, 2009. The recently-completed Taichung LNG Terminal Phase II Investment Project calls for the construction of three additional 160 thousand-kiloliter above-ground storage tanks plus another gasification facility at the terminal itself; a 26-inch, 21.8 km terrestrial gas pipeline between the terminal and the Wuxi Separation Station; and a further switching station linked to the existing 26-inch pipeline at the Wuxi site. The project will boost the annual LNG handling capacity of the Taichung terminal to over 5.0 million tons and ensure a stable, dependable supply of natural gas during the winter’s often inclement monsoon period as well as-and partly because of-greater storage capacity in terms of the number of days’ supply of LNG on hand.

Further expansion of the Taichung LNG Terminal’s capacity is under way. Currently, Taiwan government policies for phasing out nuclear power plants and for reducing greenhouse gas emissions mandate a 50% share for natural gas in fueling Taiwan’s total electricity generation by 2025. To help reach this target, CPC will lease Wharves 11 and 12 and their associated facilities from the Port of Taichung to create the Taichung LNG Terminal’s second dedicated LNG-unloading wharf; and execution of its Phase III expansion module will add two 180 thousand-kiloliter above-ground storage tanks and their associated gasification plant. These projects are scheduled for completion in 2022 and 2026 respectively to improve the unloading energy and gas supply stability.

In order to comply with the “Capacity of Self-provided Storage Tanks for Natural Gas Production or Import Enterprises” revised on August 27, 2019, the requirements for increasing the number of storage tank capacity days and business inventory days year by year, CPC will get on with Taichung Receiving Terminal New Pier & Terminal Expansion exterior Taichung Harbor Investment Project (add four above-ground full-capacity LNG storage tanks of 180 thousand-kiloliter, gasification facilities and two LNG-unloading wharfs and other related facilities) after the completion of land reclamation of North Reclamation Area (III) and South Reclamation Area (IV)-2, and use the Nanti Rd.-crossing pipelines to connect to the existing plant area to support each other. It is expected that after the completion of the end of 2028, the overall equipment utilization rate can be reduced and the gas supply stability and safety can be improved.

CPC has constructed an extensive natural gas transmission and distribution system on Taiwan’s western side. It comprises approximately 2,1 thousand kms of terrestrial trunk pipeline, extending from Pingtung in the south to Keelung in the north; and which includes 8 supply centers, one transfer center and 50 distribution stations along its length. Current plans are centered on the goal of constructing interlocking ring-shaped networks to produce a figure-8 configuration; this will involve laying down a 238-kilometer undersea pipeline from the Yongan LNG Terminal to Tongxiao and a 500-kilometer terrestrial pipeline onwards from Yongan to Taoyuan. In addition, after the 36-inch undersea gas pipeline from the Taichung LNG plant to the Datan power station has come on stream, it will be linked with terrestrial pipelines in central and northern Taiwan to form another circular formation-thus completing the planned island-wide, integrated figure-8 natural gas transmission network.


Active expansion and assuring secure gas supply

Complying the government policies for phasing out nuclear power plants and creating an environmental-friendly, low carbon environment, CPC plans to set up four gas-fired generating units in Datan Power Station. To generate abundant energy for Datan Power Station, commodity sectors in the north and other customers of the power station, CPC plans to set up the third LNG terminal in Kuantang Industrial Centre, comprising reception facilities which can hold up to 3 million metric tons of import quantum, two LNG storage tanks each of 160 thousand-kiloliter capacity; gasification and gas supply facilities to connect with the existing gas supply system.

CPC’s Third LNG Terminal project got under way in 2016 and is currently scheduled to come on stream in October 2022. Otherwise CPC gets on with Third LNG Terminal phase II expansion project(planning to build six 180 thousand-kiloliter above-ground storage tanks, a second LNG-unloading wharf and gasification facilities) in Third LNG Terminal offshore reclamation areas. The overall project is expected to be completed by the end of 2030. At that point, with the three terminals-one in each of northern, central and southern Taiwan-supplying natural gas to users in their respective areas, there should be some reduction in the cost and risk of transmitting gas over long distances-in that figure-8 combined undersea and terrestrial gas pipeline network will enhance the safety and stability of gas supply through its transfer and backup functions. Completion of this third LNG receiving terminal project will enable CPC to construct and operate national level natural gas supply system that is fully-functional, stable and safe.


Global arrangement, stabilization of gas supply

CPC has devoted considerable effort to diversifying its LNG sources to ensure a reliably stable supply of natural gas for Taiwan. The source of imports includes the Middle East, the Asia-Pacific region, Russia, Australia, North America, Central and South America, Africa and Europe. The procurement comes from all over the world.

In addition to long-term LNG procurement contracts, CPC acquires yet more supplies through medium/short-term/spot transactions to achieve the goal of stable supply and decentralized gas supply. In 2020, CPC imported most of its LNG from Qatar, Papua New Guinea and Australia, with some coming from Russia.


OTHER PRODUCTS

Liquefied petroleum gas-make use of great quality and achieve excellence

CPC’s long-standing monopoly in the LPG market was broken when the government opened it up to competition in 1999. Formosa Petrochemical Corp. as a producer and importer began competing with CPC. In response to market competition, CPC has maintained its leading market share in the household gas market by making full use of its quality advantages, north-south transport, storage systems, comprehensive marketing, retail network, full grasp of international market price fluctuations and reduction of procurement costs. In selling industrial gas, the company aims at raising the quality of its customer service and promoting the value of its products so as to both retain existing customers and win new ones. CPC cooperates with the government’s LPG safety reserve policy to increase the storage tanks turnover rate and revenue; at the same time, it endeavors to reinforce both occupational safety and environmental protection protocols for the mission of stabilizing the LPG supply in the domestic market and delivering operational performance.


CPC LUBRICANTS: internationally recognized, honorable brand

CPC’s Lubricants Business Division (LBD) was founded in 1999, March 16. Now CPC is the leader in Taiwan’s lubricants market with its dual brand- “CPCLUBE” (branding slogan: a brand with mission) “Mirage” (branding slogan: professional automotive lubricants) in Taiwan and sells its products to both domestic and overseas consumers. In terms of the domestic market, the LBD now has over 30 distributors and sells its products at over 600 domestic gas stations directly operated by CPC and leading hypermarket chains, providing comprehensive, convenient and diversified after-sales support.

Since 2011, the LBD has operated an automated precision blending system, unique in Taiwan, for its products. Located in Chiayi, its construction was completed in 2016, taking five years. This plant has sharply lifted the level of efficiency and product quality in lubricants production, which runs at an annual output of up to 90 thousand kiloliters. After the installation of lubricating grease production machinery with an annual output of more than 3,300 tons as part of a renovation project, CPC’s lubricant production equipment and capacity is second to none, not only in Taiwan but also in the wider Asia-Pacific region.

In addition, CPC has set up a highly efficient logistics network with four warehouses for finished products in northern, central and southern Taiwan, which works as a distinct competitive advantage in terms of sales performance.Since 2018, CPC has carried out a two-phase construction project of storage facilities for base oils at Taichung Port to facilitate its domestic supply and export. In future, CPC will not only increase supply capacity of base oil and launch differentiated marketing, but also apply for bonded storage facilities to be used as operation center of our oil products for international trading. In addition to cultivating its domestic market, the LBD is also vigorously expanding in the Asia-Pacific region. China, Philippines, Indonesia, Vietnam, Myanmar, India, Thailand, Australia, Congo and Surinam have distribution outlets and direct customers. To circumvent the ASEAN tariff barrier to non-members, CPC has recently set up Maxihub Corporation in Vietnam’s Tong-Nai province with joint-venture. This company will operate facilities for receiving and warehousing of petrochemicals and lubricant blending. Production is projected to begin in the end of 2021. In the future, CPC will use the Maxihub Co. as its second production base and move toward the operational model of diversified international trade of oil-derived products as a means of expanding its presence in overseas markets.

With the gradual rise of electric vehicles and shrinking of automotive lubricants market, marine engine oil becomes an important direction of future development for LBD. In the past few years, the certification team has overcome difficulties and completed complex testing processes to obtain multiple important international certifications, including MAN ES, WinGD, YANMAR, Daihatsu, Mitsubishi, KEMEL and Wartsila stern shaft seal compatibility, with unwavering efforts and great teamwork. Aforesaid breakthroughs have been the model and innovation indicators for CPC. The aforementioned achievement is a key milestone of innovation in the history of CPC.

In addition, LBD has also been committed to the establishment of a brand image in recent years. In both 2019 and 2020, CPC’s lubricant products were not only awarded the National Brand YuShan Award for Best Product, but also won the “Reputable Brand” gold award of lubricant category by Reader’s Digest. It shows that LBD’s trustworthy brand image is now affirmed by the general public after the Company’s hard work on quality control over the years.

LBD will continue to leverage its core competencies in production, channel distribution, logistics and warehousing, quality control and testing as well as technical support and endeavor to develop high-quality products, provide sophisticated, services and comprehensive technical support to better meet market and customer needs. Looking to the future, the LBD’s vision encompasses maintaining its lead over the competition in the domestic market and make the lubricant brands-CPCLUBE and Mirage, become well-known worldwide.

SOLVENTS & CHEMICALS ‡ dominant home market position is the basis for Asia-Pacific export ambition

CPC holds a dominant market share position in Taiwan’s solvents and chemicals sector: around 74% in solvents, 43% in toluene, 46% in xylene, 49% in asphalt and 50% in sulfur.

CPC’s Solvents & Chemicals Business Division aims to achieve its expansion-oriented operational objectives in a number of ways. This initially involves taking a vigorous and rigorous approach to providing efficient customer service, as well as expanding exports to promising markets such as Mainland China, Vietnam, and other promising ASEAN/Asia Pacific markets - which is very much in line with the central government New Southbound Policy. There is also much effort going into a number of initiatives, such as enhancing product quality and image, continuous improvement of the refining process and lowering production costs. Most important of all, at Solvents & Chemicals they are developing new and innovative products and new areas of business.

2021