Taiwan Cement (1101.TW): Embark on the Journey of Taiwan’s Cement Empire!


The Lukang Gu family is one of the renowned Big Five families. Its roots trace back to the era when XianRong Gu facilitated the entry of the Japanese army into Taipei, gaining numerous privileges and business rights during the Japanese occupation. In 1937, with China’s full-scale resistance against Japan, XianRong Gu passed away due to illness. Breaking from the tradition of direct inheritance, the 20-year-old son, ZhenFu Gu, took over. Later, ZhenFu Gu married ZhuoYun Yan, and the couple moved to Hong Kong.

In 1953, responding to the government’s “Land to the Tiller” policy, ZhenFu Gu returned from Hong Kong and took the initiative to exchange the vast family land for shares in Taiwan Cement. Serving as an advisor to the Ministry of Economic Affairs, he assisted in privatizing Taiwan Cement. Subsequently, he gradually overcame other regional powers, such as the Chen family in Kaohsiung and the Lin family. Through intricate stock investments, ZhenFu Gu expanded and developed the group corporation into the He Shing Group (former Taiwan Cement group). This firmly established the Gu family’s dominance within Taiwan Cement and constructed an impregnable kingdom in the cement industry. 

In this series on the Gu family’s separation, we will introduce the family’s separation process and narrate the development of the two resulting groups — Taiwan Cement and CTBC. This article will focus on the initial separation of the Gu family and the subsequent development of the Taiwan Cement group. It will outline the timeline of Taiwan Cement’s formation and growth, providing you with a deeper understanding of the Gu family and Taiwan Cement’s developmental journey!

First Group Split of the Gu Family

The first separation: Taiwan Cement and CTBC.

As LianSong Gu grew up, a situation emerged where he, as the eldest grandson and his fifth uncle, ZhenFu Gu, simultaneously took center stage in the family’s inheritance. ZhenFu Gu chose not to have his son inherit the family business to safeguard the greater family interests. Instead, he designed a succession system involving the ZhenFu Gu — LianSong Gu — QiYun Gu (ZhenFu Gu’s eldest son) — ZhongLiang Gu (LianSong Gu’s eldest son)” uncle-nephew succession.

Since 1999, issues have arisen in the businesses managed by QiYun Gu. Firstly, a domestic financial crisis erupted, forcing the management of a debt of 3 billion NTD. As a result, Chinalife turned from a profit to a loss of 2.4 billion NTD. Additionally, the stock price of the U.S.-listed internet company GigaMedia dropped from $90 to below $1 within two months, experiencing a significant market value contraction. The cable television empire, established with tens of billions of NTD, suffered a massive loss of 6 billion NTD. Faced with QiYun Gu’s business challenges, LianSong Gu chose not to clean up the mess but, instead, sought self-preservation, disrupting ZhenFu Gu’s succession plan.

In 2001, QiYun Gu was diagnosed with bile duct cancer, leading the Gu family towards a path of separation. Through negotiations between ZhenFu Gu and LianSong Gu, an agreement was reached to ensure that the listed companies under their control were not adversely affected. They transferred the ownership of shares held initially by QiYun Gu to LianSong Gu, completely severing ties with the listed companies. The traditional businesses, primarily led by Taiwan Cement, were managed by ZhenFu Gu’s second son, ChengYun Gu. The financial industry, mainly consisting of CTBC, was spearheaded by LianSong Gu and his son. The leasing group was entrusted to LianSong Gu’s third son, ZhongLi Gu.

LuKang Gu’s Family Relationship.
LuKang Gu’s Family Relationship. 

Taiwan Cement Corporation (Parent Company)

Taiwan Cement Corporation traces its roots back to the Japanese colonial period, founded in May 1946, with its primary business focused on cement production. Initially established as a public enterprise, it was officially registered in December 1950. Due to the government’s implementation of the “Land to the Tiller” policy, Taiwan Cement, along with the other three major industries — agriculture and forestry, mining and industry, and paper — was used as compensation for landowners in the form of stocks. Consequently, in November 1954, it underwent privatization, and the management rights were acquired by the Gu family from Lukang. In 1962, Taiwan Cement became the first publicly listed company in Taiwan under stock code 1101.

According to data from TEJ as early as June 1996, the Gu family held approximately 8% of the shares, making them the second-largest shareholder below the government. They secured three of the 20 director seats, with ZhenFu Gu serving as the Chairman. Since pre-privatization data is unavailable, and considering that the Gu family has been leading the company since privatization, TEJ used the registration date of December 1950 as the point when Taiwan Cement was incorporated into the Gu family-controlled group.

Development Journey of Taiwan Cement Group: 1970–1990

The Development History of Taiwan Cement Group 1970~1990.
The Development History of Taiwan Cement Group 1970~1990. Source: TEJ Group Solution

China Synthetic Rubber Corporation (CSRC) Limited

China Synthetic Rubber Corporation Limited was founded in June 1973 by 18 initiators, including BoShou Lin and ZhenFu Gu. The company signed a patent and proprietary technology usage agreement with the U.S.-based Continental Carbon Company to establish a carbon black plant. The primary product of China Synthetic Rubber is carbon black, holding approximately 6% of the global market share and ranking fifth globally in production capacity. China Synthetic Rubber went public in July 1986.

ZhenFu Gu was one of the initiators of China Synthetic Rubber. According to data obtained by TEJ as early as June 1996, the Gu family held approximately 20% of the shares, securing 8 out of 9 director seats. Gu ZhenFu Gu served as the chairman. Therefore, TEJ considers June 1973 the point when it became part of the Taiwan Cement Group.

Taiwan Polypropylene Co., Ltd.

Established in July 1973, Taiwan Polypropylene Co., Ltd. (TPP) is Taiwan’s first polypropylene raw material producer, specializing in polypropylene production. In October 1988, TPP became a publicly traded company.

According to data obtained by TEJ as early as June 1996, the Gu family held approximately 4% of the shares, securing 4 out of 7 director seats, with ZhenFu Gu serving as the chairman. Therefore, TEJ considers July 1973 the point when it became part of the Taiwan Cement Group.

In 2006, as part of a strategic move to enter the general plastics field from the niche market of specialty chemicals, LCY Chemical Corporation acquired a 36% stake from TPP’s largest shareholder, Basell Group. In the same year’s June election, LCY Chemical obtained all 7 director seats, and MouWei Li, chairman of LCY Chemical, assumed the position of TPP’s chairman. Thus, TEJ considers June 2006 as the point when it became part of the LCY Chemical Group.

In 2008, as part of consolidating product lines and procuring raw materials (propylene), LCY Chemical decided to merge with TPP. On April 23 of that year, as the reference date, TPP was absorbed and ceased to exist after the merger.

Ta-Ho Maritime Corporation

Established in September 1979, Ta-Ho Maritime Corporation was founded by Taiwan Cement and primarily engages in international bulk shipping and agency services, mainly focusing on cement transportation. Ta-Ho Maritime was listed on the Securities Market in January 2003.

According to data from TEJ as early as November 2002, the Gu family held approximately 92% of the shares, securing all 7 director seats, with ChengYun Gu serving as the chairman. Therefore, TEJ considers September 1979 the point when Ta-Ho Maritime became part of the Taiwan Cement Group.

Prosperity Dielectrics Ceramic (P.D.C.) Co., Ltd.

In the 1980s, as the Japanese cement industry faced transformation, ZhenFu Gu foresaw the challenges that Taiwan Cement would encounter. Consequently, he established the Precision Ceramic Development Center, successfully developing ceramic powder and entering the downstream passive components sector. In May 1990, Da Mei Electronics, the first domestic producer of chip capacitors, faced financial difficulties and sold all its factories and equipment to Taiwan Cement. After taking over, Taiwan Cement established P.D.C., focusing on producing multilayer ceramic capacitors. P.D.C. was listed on the Over-The-Counter (OTC) market in April 2002.

According to data by TEJ as early as October 2001, the Gu family held approximately 92% of the shares, securing all 7 director seats. ZhengXiong Jiang, as the representative of Taiwan Cement, served as the chairman. Therefore, TEJ considers May 1990 when P.D.C. became part of the Taiwan Cement Group.

In 2005, WalSin Tech sought to acquire P.D.C. to secure raw material sources. On October 7, 2005, as the reference date, they exchanged shares at a ratio of 1.6 shares of P.D.C. for 1 share of WalSin Tech. WalSin Tech acquired 12 million shares of P.D.C., holding approximately 53% of the shares. Subsequently, in the October 2005 board election, WalSin Tech gained 4 out of 6 director seats, with YouHeng Jiao serving as the chairman. Therefore, TEJ considers October 2005, the share transfer date, as the point when P.D.C. became part of the WalSin Group.

Development Journey of Taiwan Cement Group: 1991–2020

The Development History of Taiwan Cement Group 1970~1990.
The Development History of Taiwan Cement Group 1991~2020. Source: TEJ Group Solution

Taiwan Prosperity Chemical Corp. (TPCC)

Taiwan Prosperity Chemical Corp. (TPCC) was established in May 1991 through a collaboration between Taiwan Cement and CPDC Corporation, Taiwan. It stands as Taiwan’s first specialized manufacturer of phenolic products, primarily engaged in the production of petrochemical intermediates. TPCC was listed on the Emerging Stock Market in October 2006 and on the main board in October 2007.

Data obtained by TEJ as early as April 2007 reveals that the Gu family held approximately 60%, securing 5 out of 8 director seats, with ChengYun Gu serving as the chairman. Therefore, TEJ considers May 1991, as the establishment date, when TPCC became part of the Taiwan Cement Group.

In September 2020, Taiwan Cement made TPCC its wholly-owned subsidiary through a cash exchange of NT$18 for every TPCC share. Subsequently, on January 18, 2021, TPCC was delisted and ceased public issuance. After TPCC’s delisting, Taiwan Cement devised three strategies: (1) to continue holding and integrating group resources, (2) to introduce strategic alliance partners for joint operational improvement, and (3) to sell equity or assets. At this juncture, Chang Chun Group proactively approached Taiwan Cement, which promptly sold TPCC to Chang Chun Group for NT$2.4 billion, with the transaction completed in August 2021. TEJ considers August 2021, the completion date, as the point when TPCC became part of Chang Chun Group. However, due to TPCC’s delisting, no board and supervisory data is available for reference.

FuYu Property Co., Ltd.

FuYu Property Co., Ltd. was founded in August 1988, with the founder remaining unidentified. In its early years, the company’s main products were fiber optic terminals and loop transmission equipment. Initially named Zhen Hua Communication Co., Ltd., it was listed on the securities market in March 2002.

With a vision to venture into wireless communication, ChengYun Gu acquired Zhen Hua Communication in 1997, leading to a name change from Zhen Hua Communication Co., Ltd. to Zheng Hua Communication Co., Ltd. According to TEJ data as early as October 1997, the Gu family held approximately 40%, securing 4 out of 7 director seats. Hence, TEJ considers October 1997 when Zheng Hua Communication became part of the Taiwan Cement Group.

In May 2003, Zheng Hua Communication merged with Lien Cheng Computer, marking the involvement of the United Microelectronics Corporation (UMC) Group. Due to continuous losses and the family’s decision to divest, the Gu family sold its shares in 2004. As UMC became the largest shareholder at this juncture, the company was transferred to the UMC Group. TEJ considers April 2004 when Zheng Hua Communication became part of the UMC Group.

Following Chairman Hao Ting’s resignation in March 2007 and the UMC Group’s withdrawal, Chairman WuHao Wang took over with a 1.3% stake. FuJuDe Industrial, holding one director seat, increased its shares and secured 3 out of 5 director seats in the subsequent election, making JianHsun Chen the Chairman. 

However, despite gaining control, FuJuDe Industrial showed little interest in management. At this juncture, GPS factory Zheng Han Tech spotted Zheng Hua Comm.’s shell, aiming to transform it into a GPS service platform. In addition to acquiring FuJuDe Industrial, Zheng Han Tech sought additional equity in the market. In the directorial re-election of June 2008, Zheng Han Tech, holding about 32% of Zheng Hua Communication’s shares, obtained 5 out of 7 director seats. Chairman JianHsun Chen of Zheng Han Tech assumed the role of Chairman, gaining operational control. TEJ considers June 2008 as the point when Zheng Han Tech was incorporated into the Zheng Han Tech Group.

Despite challenges, Zheng Hua Communication struggled to turn losses into profits, leading to the official cessation of its GPS businesses in 2010. By June 2010, Zheng Han Tech Group withdrew from operational control during a directorial re-election. Former Zheng Han Tech representative ChunChu Lin assumed the role of Chairman, and the company rebranded as Chun Yu Development Co., Ltd. Lin increased his stake to 25% in 2012, signaling an intent to transform the company into a land developer. This move attracted the attention of FuYu Property, which acquired WeiShan Ni’s equity and participated in the private placement.

In April 2013, FuYu Construction held approximately 61% of Chun Yu Development’s shares, securing 2 out of 3 director seats. QingQuan Zhang assumed the role of Chairman, gaining operational control. However, in September 2012, the company conducted a private placement of 100 million shares, with FuYu Construction purchasing all newly issued shares for 1.1 NTD per share. Becoming the largest shareholder, FuYu Construction became the new majority shareholder. TEJ considers September 2012 when Chun Yu Development was incorporated into FuYu Construction. After gaining operational control, FuYu Construction renamed FuYu Property Co., Ltd. in July 2013.

E-One Moly Energy Co., Ltd.

E-One Moly Energy was founded by ChengYun Gu in March 1998, initially led by HanCheng Guo, a former senior manager of the R&D department at Duracell and Vice General Manager of Nexcell Battery. The company focused on battery production. In 2000, following the completion of NEC’s battery core factory in Japan, E-One Moly Energy acquired the Moli Battery plant in Canada for 1.9 billion, serving as a technological source. The company went public on the GreTai Securities Market in July 2004 but ceased trading in April 2015. Public issuance was officially revoked in June 2016.

According to data obtained by TEJ as early as March 2003, Taiwan Cement Group held approximately 33% of the shares. It secured 3 out of 9 director seats, with ChengYun Gu as the chairman. Therefore, TEJ considers March 1998 the point when E-One Moly Energy was incorporated into the Taiwan Cement Group.

FDC International Hotels

Cloud & Land International Group, established initially as CTBC Tourism Co., Ltd. in 1961, was a subsidiary of the CTBC Financial Holding Co., Ltd. When the company split during the family division, it was allocated to the CTBC Group. Later, ChengYun Gu and his brother-in-law AnPing Zhang acquired it from ZhongLi Gu for 3 billion, renaming it “Cloud & Land International Group.” In November 2012, Cloud & Land International Group established FDC International Hotels, primarily engaged in international hotels, catering, and banquet services. FDC International Hotels was listed on the securities market in November 2015 and went public in November 2016.

According to data obtained by TEJ as early as July 2015, the Gu family held approximately 81% of the shares, securing 3 out of 5 director seats. ChihJen Sheng served as the chairman, representing Cloud & Land International Group. Therefore, TEJ considers November 2012 as the point when FDC International Hotels was incorporated into the Taiwan Cement Group.

The Current Taiwan Cement Group

Following the split from the He Sheng Group, the Gu family, represented by brothers ZhenFu Gu and LianSong Gu, acquired different core businesses. Despite being allocated businesses with comparatively smaller market values, ZhenFu Gu actively managed the Taiwan Cement, leading the continuous expansion of the Group. Assessing the market value growth of the Taiwan Cement Group over 20 years, despite the deregistration or merger of some subsidiary companies into other groups, the overall market value has still astonishingly increased by 659%. In this context, the market value of the TCC’s parent company, Taiwan Cement Corporation, has experienced an even more remarkable growth of 884%

Market Value of Taiwan Cement Group.
Market Value of Taiwan Cement Group (members’ accumulated). Source: Integrated from TEJ Dataset 

The remarkable growth of the Taiwan Cement Group owes much to the reform efforts of its former chairman, ChengYun Gu. In 2003, ChengYun Gu assumed the role of chairman at Taiwan Cement. Soon after, the Gu family faced setbacks with the successive passings of ChengFu Gu and ChiYun Gu. At a time when external observers believed the Gu family’s industrial position was at risk, ChengYun Gu took charge of the Taiwan Cement Group with his visionary management style. He launched an assault on the international cement market, propelling the company into a new growth phase.

Beyond this, ChengYun Gu bestowed a mission upon TCC — to achieve sustainable development. He once said to TCC, “Transform from being a major environmental polluter to an exemplary environmentally friendly entity, and even evolve into an environmental enterprise.” Sustainable development became another starting point for TCC, signaling the path it aimed to traverse in the future. Despite being in the high carbon-emitting cement industry, TCC has diligently worked towards realizing a green transformation, continuing the legendary legacy of the Gu family’s cement empire. Today, TCC is accumulating strength over time, silently awaiting the arrival of the next glorious chapter for the group!

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TEJ, with nearly 20 years of experience in corporate governance recognition, provides a consistent and verifiable basis for identifying the ultimate controllers of groups. By incorporating the TCRI (Taiwan Corporate Credit Rating Index), which has nearly 30 years of company credit rating data, TEJ introduces a quantified model to unveil the credit risk levels of these groups. 

Through TEJ GCRI Index, you can access information about the affiliation of each company to its respective group, inclusion and withdrawal dates, and reasons for such actions. Additionally, comprehensive annual financial data and group credit risk levels (GCRI) are available for each group. For more information, please refer to TEJ Credit Risk Solution!

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