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subsidiaries may consider passing polymer cost to In addition to research on new products, EIC works on
customers by increasing price of the products manufactured improvement of existing products to attain more promient
under their own brands, including switching certain properties, including improvement of production to
materials to lower the cost of production at the time or increase its efficiency. As a result, with ongoing research,
selling products made from alternative materials in place the corporate group’s products with superior features stand
of original materials. For example, the company may out against the competitors’, all along.
consider selling PET plastic cup instead of PP or PS plastic Simultaneously, subsidiaries such as AFC has investment
cup under the same qualification required by customers. in specialized center for the development of () fire-retardant
Risks from changing of technologies polymer, and one of the most advanced flammability Test
Since the corporate group manufacture and distribute Centers in the country while EPP also invests in biological
plastic products and all income are derived from plastic research and development center for safety of food and
and polymer conversion, which the corporate group beverage packaging.
implement variety of technologies, for example, Mixing Risks of possible loss of income or business performance from
and Compounding, Extrusion, Injection, Thermoforming, the incurrence of unavoidable calamity and natural disaster to
Blow Molding, and Reaction Injection Molding (R.I.M.). If factories or machines of the company
competitors of the corporate group can invent better and Main business of the subsidiaries is manufacturing
more advance technology than those of the corporate products for distribution which is subject to factories and
group and result in lowering the cost of production, they machines. The incurrence of damage, unavoidable
may affect the competitive advantage of the corporate calamity, and natural disaster to factories or machines
group. If the corporate group cannot improve its production cause production under-capacity or the production to stop
technology in time, it may materially affect the result of and could have a material adverse effect on subsidiaries,
operation. and result in a loss of major customers because they need
In addition to production technology, unique features of to find other manufacturers in place of subsidiaries. To win
plastic materials rendering products made by the corporate back said customers after fixing damaged factories or
group to outperform their competitors. Such are the main machines could be difficult. Besides aforementioned
factors that customers consider when making decision subjects, subsidiaries have to bear additional cost of
to buy products. If competitors can invent materials with maintenance, building new factories or purchasing new
better features, they may adversely affect the corporate machines in order to continue running business further in
group’s turnover or result in possible state of losses. the future.
Considering the importance of technologies and risks, the Well aware of the necessity for risk management, the
Company, decided to invest in EPG Innovation Center Co., Ltd. subsidiaries have insurance policy to prevent risks from
(“EIC”) to conduct research and product development for unavoidable calamity and natural disaster. The subsidiaries
the corporate group. EIC has testing lab which is ranked also implement preventive measures and other arrangement
as one of the biggest and most advanced polymer and to ensure uninterrupted continuity of business in the event
plastic laboratory centers in Southeast Asia. Also, skilled of unavoidable calamity and severe natural disaster directly
researchers are hired to research and develop products. impact the company.
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