Under the previous leadership of its founder, Mr. Yu- Ziang Hsu, FEG built a solid foundation and opportunities for great prosperity. However, as his successor, Douglas Tong Hsu faces a complex, unpredictable, and faster evolving world which requires extensive time traveling the world for opportunities to expand his global reach, enhance his knowledge, and develop new ideas for the future. Says Hsu, “The whole world is changing, and you have to adapt and engage to be part of the creation of a brighter future.”
From his father, Douglas Tong Hsu inherited the management philosophy of “Sincerity, Diligence, Thrift and Prudence.” Hsu has added—“Innovation.” According to Hsu, “Scientific and technological innovation creates business opportunities, as well as global competition. As world consumption patterns and competitors are changing, so, we must persist in innovation and development to sustain our existence.”
“We have not taken the easy road. We have persisted in a very comprehensive system in operations, but without innovation and the ability to overcome challenges, FEG would not have reached its current scale,” As an example, Far Eastern Textile Ltd. (FETL), renamed Far Eastern New Century Corporation (FENC), has now evolved and transformed into a major global supplier of high-tech polyester materials. Polyester products are widely utilized today in nontextile fields such as electronics, medicine, and other high-tech industries. Textile products now account for only 20 percent of its business, and research has had to focus on specialty features to create textile fibers that are increasingly quick to dry, lighter, and warmer. This innovation occurred in part to break through the Japanese dominance of the industry. Thus, FETL expanded from a manufacturer of downstream textile products to one of upstream synthetic fiber products. Despite global competition in the upstream market it also serves as an example of inspiration for innovative solutions. Early in 1992, Hsu remembers a crucial three-day plant visit in the U.S. with the leader in the polyester industry at the time, DuPont. Initiated by DuPont curious about the fast growth of FETL, this visit proved educational for both parties. DuPont representatives reciprocated the visit and were surprised that FETL’s production line changed every three to four days. The discovery of this difference had similarly surprised Hsu early on when he learned DuPont’s production line remained for three to four months, a result of its stable customer demand. FETL’s competitive market environment required flexibility to meet different customer demands. Thus “Being down-to-earth in business, and taking the high the road to innovation should satisfy the demand,” Hsu stated.
Sixteen years later, DuPont having withdrawn from the polyester business, has witnessed FETL’s rise in the industry as one of the world’s top three suppliers of PET (polyethylene terephthalate).
With a passion for high-tech products, Hsu is watchful of new developments in the high-tech industry. Far EasTone Telecommunications, for example, has in the current high-tech climate now grown into the Group’s largest platform for innovation.
In 1996, the Taiwan telecommunications market began opening up and FEG and the American company AT&T established a joint venture giving birth to Far EasTone Telecommunications. While doubts existed in FEG’s expertise to operate a telecommunications firm, the skeptics overlooking significant FEG achievements in emerging fields would be proven wrong. From the traditional textile industry, FEG’s successful expansion into cement, department stores, petrochemicals, transportation, construction, and finance, had proven itself highly capable of cross-market innovation once again.
Contributing to the daily lives of the people of Taiwan, Hsu states, “We connect lives through Far Eas- Tone Telecommunications, provide banking services at Far Eastern International Bank, and offer the best quality and value in our convenient department stores. The most important aspect is to provide consistent top-end service throughout our businesses every day.” In 2004, FEG launched the concept, “One Customer View.” Through complex implementation, formerly uncoordinated companies would drop their original customer membership cards in favor of a broader system of alliance. In 2005, after a comprehensive adjustment and overhaul of equipment and resources, “HAPPY GO,” a joint point collection card, was launched. This allowed members shopping at the Group’s varied venues to earn points. This newly promoted HAPPY GO card increased membership from one to six million cardholders and now includes over 800 brands and 6,000 shops in the program.
While promoting innovation, Hsu has earned widespread admiration for his global international perspective. Mr. Yu-Ziang Hsu, FEG founder, began business in the volatile cosmopolitan city of Shanghai, which was also the birthplace of Douglas Tong Hsu. Having been separated early on from their homeland in this highly competitive environment, the two generations have continued to maintain the importance of keeping a global perspective. After finishing his studies in the United States, Douglas Tong Hsu began his working career at the internationally respected Citibank headquarters. After several years he returned to join FEG and introduced the modern concept of information management. Setting up the Computer Center in 1967, FETL became the first computerized private enterprise in Taiwan. Mr. Hsu downplays his role stating, “All foreign advanced countries promoted computerization at that time.” In the years since, at least one third of the year is spent abroad, where he participates in high level international economic forums with world leaders following world markets and trends.
In the 1980s, FEG’s rapid internationalization began with major collaborations between the Group and Du- Pont (American), ICI (British), and other partners from France, Switzerland, Germany, and Japan. Nine companies were established and investments in fields such as petrochemicals, industrial gases, environmentalprotection technology, and other high-tech manufacturing endeavors were made as a result. In the 1990s, a partnership with AT&T (USA) formed Far EasTone Telecommunications Co., Ltd. Mark Joseph from AT&T (India) reflected that AT&T’s investment decision was based primarily on three criteria: FEG’s financial capability, over forty years in manufacturing, and a history of successful collaboration with other foreign companies.
Internationalization is found in FEG’s executive team where executives from all over the world are currently in such top-level management positions as vice-chairman (Far EasTone Telecommunications and Pacific Sogo Department Stores), general manager (Far Eastern Plaza Hotel), and president (U-Ming Marine Transport Corporation). As the first publicly-traded Taiwan company to employ foreign executives on its management team, Far EasTone Telecommunications has a culture much like that of a foreign company. With English as the main corporate language and a board of directors representing major international companies, such as Japan’s NTT DoCoMo and Singapore Telecommunications, and Kurt Roland Hellstrom (the former CEO of Sony Ericsson), and Lawrence J. Lau (the president of the Chinese University of Hong Kong) as independent directors. “We are a company without national borders where professionals from all over the world who can adapt to the necessary local business culture are invited,” Hsu explained. “Do we need to be a Taiwanese company? No, nationality is no longer an issue.”
“Safety, health, and environmental protection are important international trends. Our international partners helped us to focus early on environmental protection in a global context. Without them, we would most likely still be focused simply on output, quality, and cost,”stated Hsu in 1988. Hsu, who counts diving and swimming among his hobbies, is an ardent advocate of environmental protection. Having held the position as a joint chairman of The Nature Conservancy, an international organization focused on environmental protection, he is dedicated to its protection locally as well as abroad. After finding out that ancient trees in Taoyuan military village in Taiwan were to be cut down for new construction, he authorized the extra funding for their transportation and replanting at the Yuan Ze University campus providing generations of students with large, luxuriant trees for shade. FEG has devoted a considerable amount of its resources to environmental conservation. Sixteen years ago when FEG Headquarters, the Taipei Metro Towers were built, the most advanced ice storage airconditioning system was installed. The energy it has since conserved is equivalent to 690,000 tons of CO2 emissions per year. With a strong continuation in these efforts, FEG has set a target of a 5% reduction in energy usage per year, and it has urged its affiliates to prioritize this goal as well. Energy conservation is the top priority in project planning. Replacing the headquarters mall holiday lights with LED to reduce more than 80 percent of electricity consumption.
The French writer Marcel Proust once said, “The real voyage of discovery consists not in seeking new landscapes, but in having new eyes.” During its 60-year journey, FEG has forged a new vision by a defined operating model, which has had a profound effect on Taiwan. The guiding vision for FEG’s next 60 years, and its impact lies not only in the hands of its leadership, but also in its dedicated 50,000 employees. FEG is connected and continues towards a bright path that grows wider with each step forward toward a better tomorrow.
Abstract from "FEG 60th Anniversary Book" Download