Shipping of raw materials and products at FENC involves land and marine transport. The Company wishes to ensure safety during transportation while minimizing GHG emissions and pollution. Whether shipping internationally or domestically, through land or sea, any mishaps could lead to disastrous damage to the environment and the Company. Therefore, the Company holds transport operations to the highest local and global standards and only teams up with the most reliable logistics operators and international organizations to further its commitment to social and environmental sustainability.

OPTC establishes partnerships and signs long-term contracts with local transport suppliers. Regular supplier safety and quality review meetings are held, and those delivering exceptional performance are recognized and incentivized during OPTC’s annual executive meeting. Suppliers with safety and quality issues are disincentivized with an immediate non-compliance report (NCR) to require improvement. To encourage swift action from suppliers after receiving NCR, their assignments are suspended until improvements are completed.

1. Reduce environmental impact:
FENC production sites encourage transport suppliers to utilize more eco-friendly vehicles at their premises. The plant in Shanghai, mainland China, for instance, encourages the use of electric, hybrid or biofuel vehicles to support the government policy and reduce pollution. In the future, priority consideration and a greater share of transportation assignments will be given to green-label vehicles to reduce environmental impacts.

2. Optimize logistics operations:
Routes and scheduling between departure and destination points such as factories, shipping yards, ports and customers’ bases are configured to optimize shipping logistics, reduce inefficient transport such as deadheading and fuel waste and shorten the freight distance and vehicle wait time. The next step is to introduce AI and big data analytics to reach carbon reduction targets.

3. Minimize risks of weather-induced shipping delays:
In response to extreme weather patterns, forecasts are monitored closely to avoid weather-induced risks and facilitate advanced shipping schedule adjustments. For instance, transport suppliers are reminded to dispatch vehicles earlier for loading to stay ahead of approaching typhoons or heavy rainfall, which could result in disasters. High-risk routes are also avoided to prevent shipping delays.

4. Encourage shared transportation:
When appropriate, orders are grouped into the same delivery schedule. Lightweight products from different orders without special requirements are consolidated into one freight truck to improve efficiency by reducing the number of trips required for delivery, which lowers fuel consumption and carbon emissions.
 

Selection and Management of Transport Contractors

Prior to commencing any shipping activities, FENC makes careful selection of reputable transport suppliers with clean records that identify with the commitments in Supplier Code of Conduct and Corporate Social Responsibility Commitment Statement. The Company also conducts annual reviews to evaluate contractor operation.

1. Marine Transport
FENC establishes partnerships with reputable international suppliers that are soundly managed and abiding by the principles of International Maritime Organization (IMO). Evaluation and management over the marine transport contractor are conducted on a regular basis.

Control Mechanism and Action Plan for Marine Transport Contractors

2. Land Transport
Vehicles involved in land transport may directly impact public safety. Therefore, in addition to meeting minimum capacity, transportation safety is a priority concern during contractor selection. The Company compiles case studies and conducts regular training for the transporters and dispatchers on the contractor’s end to improve their risk awareness and response, creating win-win in occupational safety between FENC and the contractors.

Control Mechanism and Action Plan for Land Transport Contractors

To ensure contractors’ commitment to safety, all transport contractors must incorporate risk indicators into the emergency response in addition to regular management practices; review and evaluate past disasters; analyze possible risks; continue improving safety management system. 

On May 23, 2025, a tanker truck en route to OPTC was involved in a traffic incident.  Fully loaded with 29.13 metric tons of PX, the tanker tried to pass through a curve without decelerating. Pushed by the centrifugal force of the sloshing liquid, the tanker overturned to the right, spilling 15.90 metric tons of PX as a result. Fortunately, the driver was unharmed and discharged from the hospital on the same day. The incident caused damages to seven passenger vehicles parked on the roadside, and the owners of six of the vehicles had been compensated prior to the end of September after reaching settlements. OPTC responded right away as the incident occurred by activating its emergency response protocols. The management personnel rushed to the scene and took immediate action. The transport contractor also proceeded with chemical spill containment by placing sandbags at two strategic points along the downstream drainage ditch as instructed by the Department of Environmental Protection. Meanwhile, a licensed wastewater disposal company commissioned by OPTC pumped a total of 136.63 tons of liquid waste using specialized equipment. The wastewater was then transported to a qualified facility for proper disposal. After cleanup and subsequent monitoring, the incident did not result in substantial impact on the surrounding environment.

To prevent similar incidents from recurring, OPTC probed into the incident and held a review meeting on June 2 to identify the cause and any deficiencies in its management approaches. The improvement measures established include:

1. Strengthen safety training and promote risk awareness among transport suppliers.
2. Amend applicable rules to increase penalties for violations.
3. Enforce strict standards regarding driving speed and safety management for loaded vehicles.
4. Adopt assistive technology for risk prevention with plans for installing a speed detection and warning system on vehicles to prevent turning at high speed.
    

To protect the personnel and environment, FENC will continue to bolster supplier and contractor management, ensuring transportation safety and honing its risk prevention and agile response capabilities.
 

Risk Indicator and Control Mechanism for Land Transport Contractors

3. Plant Control
Contractors are required to comply with all rules and regulations regarding safety and transport at each plant to ensure transportation safety and management. Transport contractors must require that vehicle operators thoroughly understand the safety requirements established at each plant prior to entering the premise to minimize occupational disasters.

Control Mechanism for Safe Transport of Hazardous Objects

1. Transport suppliers shall comply with all regulations set forth in Regulations Governing Transport of Dangerous Goods.
2. All signage shall comply with local regulations on Identification of Vehicles Transporting Dangerous Goods.
3. All operators and passengers on vehicles carrying hazardous materials shall complete professional training and physical examination per regulatory requirements and shall carry adequate personal protective equipment on the vehicle.
4. Governmental permits are required for delivering hazardous materials and transportation routes shall comply with local regulations.
5. Regular inspections shall be conducted over the vehicles and canisters carrying hazardous materials..
6. FENC ensures supplier compliance with safety regulations concerning the transport of hazardous materials through random inspections and regular review meetings on transportation environmental safety and health.
    

2025 Performance: There was one incident involving leakage of hazardous chemicals and materials during the transport of raw materials and finished products for FENC. The incident involved a tanker rollover that resulted in a PX spill. Please refer to Land Transport for the details.