PART 1 BUSINESS OPERATION

1. Policy and Business Overview

Thai Central Chemical Public Company Limited is the producer and
distributor of chemical fertilizer, established by the government (under
cooperation of the Ministry of Finance) and private sectors, comprised
of Metro Co., Ltd., Sojitz Corporation (formerly Nissho Iwai
Corporation) and Central Glass Co., Ltd (currently the Company’s
technical advisor) of Japan, on March 6, 1973, with initial registered
capital of THB 120 Million. Later on, the Company registered on the
Stock Exchange of Thailand in October 1991, with a registered capital of
THB 700 Million and in 1993, the Company became “Public Company” with
registered capital at THB 2 Billion.

Thai Central Chemical Public Company Limited (TCCC) is Thailand's
largest producer and distributor of compound chemical fertilizers. The
Company operates 2 large and international-standard plants, located at
Phra Samut Jedee District, Samut Prakarn Province, with total annual
capacity of 850,000 metric tons, and at Nakhon Luang District, Phra
Nakhon Si Ayutthaya Province, with total annual capacity of 350,000
metric tons, having the combined total capacity of 1.2 million metric
tons a year.

1.1 Vision Objective and Strategy

The Company’s vision is The first-choice of growers “We aim to be a top
priority choice of agriculturalists in Southeast Asia by delivering
excellent products and services that boost quality and productivity in
farming.”

To accomplish the vision, the Company has stipulated the mission as
follows.

1.  We Strive to Create Values

We are committed to bringing new values to farmers and agriculture, by
providing superior quality products and services, continuously invented
and developed to increase farming productivity. Our services will spread
over to farmers in ASEAN countries and be even diversified further to
enhance our value chain in agriculture industry.

2.  We Develop our People

We are committed to growing our people, by providing learning
opportunities and by creating a corporate culture where employees
encourage each other to grow together. We will keep evolving our
organization to accommodate changes in business environment.

3.  We Care for Society

We are committed to making environmental friendly and sustainable
business processes as well as creating positive influences to society,
by integrating corporate citizenship and sustainable development
concepts into our business practice.

1.2 Significant Change and Development

The Company had significant change and development in 2017 as follows.

Business in Myanmar

The Company has a policy to expand the business into the neighboring
countries. In 2016, the Company has established Thai Central Chemical
Public Company Limited (Yangon Branch), Myanmar, having the objective to
conduct marketing and research and development on the market in Myanmar.
In the same year, the Company established TCCC Myanmar Limited which is
the Company’s subsidiary with the objective to fully operate the
chemical fertilizer business in Myanmar, namely, import fertilizer from
Thailand, repack and distribute to the customers in Myanmar. The
registered capital is USD 12 million and the Company holds 99.99% of the
shares in TCCC Myanmar Limited.

In 2017, TCCC Myanmar Limited was under construction of its warehouse
which is located at Thilawa Special Economic Zone, Yangon, on the area
of 20 Rai having storage capacity of around 15,000 MT. The construction
of the warehouse has been completed in December 2017 and, at present,
the machine has been installing. It is expected that TCCC Myanmar
Limited will begin its operation in early of 2018 subjected to obtaining
of the related permits.

Certificate of BS OHSAS 18001

The Company received the certificate of BS OHSAS 18001:2007 ;
Occupational Health and Safety Management from The British Standards
Institution (BSI) for Phrapradaeng and Nakhon Luang Plant Site as a
result of the company announced work instruction to be a guideline for
working and also holds seminar on safety issue periodically. In
addition, the company has collected the statistic of accident which
occurred in the plants including any injuries caused by work that
conforms to Company’s Safety Policy.

EIA Monitoring Awards 2016

The Company received the excellent award in transport category, in the
project of wharf transport 5A at Phra Pradaeng plant site, Samut Prakan
Province in the “EIA Monitoring Awards 2016” arranged by Office of
Natural Resources and Environmental Policy and Planning, Ministry of
Natural Resources and Environment, as the Company complies with measures
identified in Environmental Impact Assessment Report and have good
environmental management. This award shows that the Company aims to
develop business together with sustainable development of community &
society which is our mission.

1.3 Shareholding Structure

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1.4 Relationship with Major Shareholders’ Business

The Company’s business character does not relate or rely on any finance,
technique, material supply, sharing trade name of the major
shareholders, and does not compete with the major shareholders.

2. Nature of Business

The Company’s Revenue Structure and Shareholding in Subsidiaries

Structure of Revenue and Shareholding (as at 31 December 2017)

  --- ------------ ------------- ------------- -------------- ------------ --------- ----------- -- -------- ----------- -------- ----------- --------
                                                                                                                                  (Unit :     
                                                                                                                                  Million     
                                                                                                                                  Baht)       

      Company      Established   Type of       % Shareholding Registered   Capital   2017                    2016                 2015        
                                 Business                     Capital      Paid Up                                                            

                                                                                     Revenue        %        Revenue     %        Revenue     %

      Thai Central 6 March 1973  Chemical      -              1,754        1,754     11,149.61      95.43    12,252.51   96.43    12,500.69   96.37
      Chemical                   Fertilizer                                                                                                   
      PLC.                                                                                                                                    

                                                                                                                                              

      Subsidiary                                                                                                                              
      and                                                                                                                                     
      Associated                                                                                                                              
      Company                                                                                                                                 

  1   MC-Agro      22 January    Repacking and 99.99          50           50        411.03         3.52     336.88      2.65     349.13      2.69
      Chemicals    1988          Formulating                                                                                                  
      Co., Ltd.                                                                                                                               

  2   N.I.M. Co.,  14 February   Chemical Tank 51.00          125          125       121.27         1.04     116.04      0.91     120.02      0.93
      Ltd.         1974          Yard                                                                                                         

  3   Central      16 January    Trading       49.00          200          200       0.92           0.01     0.89        0.01     1.09        0.01
      Pacific      1975                                                                                                                       
      (Thailand)                                                                                                                              
      Corp., Ltd.                                                                                                                             

  4   TCCC Myanmar 3 October     Import        99.99          $ 12.5*      $ 12.5*   1.01           0.01     -           -        -           -
      Ltd.         2016          Chemical                                                                                                     
                                 Fertilizer                                                                                                   

      Total                                                                          11,433.84      100.00   12,706.32   100.00   12,970.93   100.00

                                                                                                                                              

      Remark: *                                                                                                                               
      Millions of                                                                                                                             
      United                                                                                                                                  
      States                                                                                                                                  
      Dollar                                                                                                                                  
  --- ------------ ------------- ------------- -------------- ------------ --------- ----------- -- -------- ----------- -------- ----------- --------

2.1 Product or Service

2.1.1 The Company’s Product or Service

Thai Central Chemical Public Company Limited (“TCCC”) manufacturing
plants are capable of producing standard quality chemical fertilizers.
The chemical fertilizer production consists of basic nutrients which are
Nitrogen (N), Phosphate (P₂O₅) and Potassium (K₂O) and secondary
nutrients such as Magnesium (MgO), Sulphur (S) and other supplementary
nutrients such as Boron (B) which promotes healthy growth of crops, both
in quantity and quality. TCCC produces “Ox-Brand” Fertilizer products
that are of quality as registered with Ministry of Agriculture and
Cooperatives and its popularity has been affirmed by farmers all over
Thailand for more than 40 years. The proper application of chemical
fertilizer with suitable timing encourages greater amount and better
quality of production to meet the market demand, and helps lower the
production cost resulting in an increase of income for Thai Farmers,
which eventually contribute to better national economy as a whole.

In addition, the factory located in Samut Prakan Province (Phra Pradaeng
plant site), has the total annual capacity of 850,000 metric tons, and
has a warehouse with its total storage capacity of 100,000 metric tons
for raw materials, and a wharf extended to 310 metres length, 8.4 metres
(27 feet) depth below sea level which can accommodate two 20,000-25,000
metric ton vessels simultaneously, and unload 6,000 metric tons of raw
materials per day. For the manufacturing process, Phra Pradaeng plant
site has utilized the natural gas which helps lower the cost and produce
less pollution, substituting for the fuel oil since 2007. We also have
installed and operated the Cogeneration power plant which can produce
electricity at the capacity of 4 MW. in order to supply electricity
within the plant site. The excess of electricity will be sold to
Metropolis Electricity Authority (MEA). Moreover, the heat from the
cogeneration system has been used in the chemical fertilizers’
manufacturing process in order to save the cost and energy, and to help
reduce global warming effect since 2013.

Another factory, located in Nakhon Luang, Phra Nakhon Si Ayuttaya
Province (Nakhon Luang plant site), has the total annual capacity of
350,000 metric tons, and has a warehouse with its total storage of
90,000 metric tons, and a wharf extended to 189 meters length, 5 meters
(16 feet) depth below sea level which is capable to accommodate three
500-2,500 metric ton cargo ships simultaneously, and also unload 4,000
metric tons of raw materials and imported commodities per day. In
addition, Nakhon Luang plant site has utilized LPG which is the clean
and eco-friendly fuel in production of steam, substituting the oil fuel.

For quality control, the two company’s laboratories, located at both
plant sites, have been certified ISO/IEC 17025:2005 international
standard assuring the quality of nutrient values of chemical
fertilizers. Moreover, both plant’s laboratory have been certified as a
high-quality analysis lab for chemical fertilizer registered from the
Department of Agriculture, and the lab also provides the nutrient
analytical services for external organizations.

Furthermore, Both TCCC’s plant sites have been certified as a green
industry level 2 by the Ministry of Industry Thailand and the company is
in the process of upgrading to level 3 in the near future. The green
industry project has been set up by the Ministry of Industry Thailand
that regulated 5 levels of “green industry” to evaluate the
environmentally-friendly factories.

The character of the products is granular chemical fertilizer for
agricultural use by adding into soil. The crucial factor affecting
limitation of this business is none as the government sector still
promote use of fertilizer.

Chemical Fertilizer produced by the Company is granular chemical
fertilizer N-P-K which are Nitrogen (N), Phosphorus (P₂O5), and
Potassium (K₂O), and some grades contain secondary plant nutrients such
as Magnesium (MgO) for certain crops. The chemical fertilizer is
normally packed in 50 kilograms plastic woven bag bearing “OX” brand and
other brands which can be used with plants such as:

  N-P-K Chemical Fertilizer : Quality Product of OX-Brand Fertilizer

Orchard Fertilizer

  ----------------- ----------------- -----------------------------------------
  Formula           Rate              Application

  15-15-15 Premium  1-2               general growth
                    kgs./plant/year   

  8-24-24 Premium   1-2               flower and fruit stage / prematurity
                    kgs./plant/year   

  13-13-21 Premium  1-2               improve fruit quality
                    kgs./plant/year   

  Total not over                      
  than 5                              
  kgs./plant/year                     
  ----------------- ----------------- -----------------------------------------

Vegetable and Flower & Ornamental Plant Fertilizer

+-------------+--------------+-----------------------------------------+
| Formula     | Rate         | Application                             |
+-------------+--------------+-----------------------------------------+
| 15-15-15    | 30-50        | sowing cover the plot after planting    |
| CIS         | kgs./rai     | 3-5 days or basal application before    |
|             |              | planting or apply alongside far from    |
| 16-16-16    | basal        | tree 25-50 cm. after that 15-30 days    |
| CIS         | application  | apply again                             |
+-------------+--------------+-----------------------------------------+

Sugarcane Fertilizer

  ----------------- ---------- ------------------------------------------
  Formula           Rate       Application

  16-12-8, 16-16-8, 40-50      1^(st) application, new planting apply
  18-12-6, 25-7-7,  kgs./rai   basal application or after planting 1
  15-15-15 Premium             month ratoon planting apply after trimming
                               1 month

  12-9-21, 15-7-18, 40-50      2^(nd) application, 2-3 months after
  20-8-20, 21-7-18, kgs./rai   p;anting
  12-10-18 Premium,            
  13-13-21 Premium             
  ----------------- ---------- ------------------------------------------

Remark: Should apply after weed eradication

Rice Fertilizer

+----------------+----------+------------------------------------------+
| Formula        | Rate     | Application                              |
+----------------+----------+------------------------------------------+
| Clay soil      | 25-40    | Sown-field                               |
|                | kgs./rai |                                          |
| 16-8-8,        |          | 1^(st) application for 20-30 days plant  |
| 16-12-8,       |          | or basal application                     |
| 16-20-0,       |          |                                          |
| 25-7-7         |          | 2^(nd) application 30 days after first   |
|                |          | application                              |
| Sandy soil     |          |                                          |
|                |          | Transplant                               |
| 16-8-8,        |          |                                          |
| 16-16-8,       |          | 1^(st) application for after transplant  |
| 18-12-6,       |          | 5-7 days                                 |
| 25-7-7         |          |                                          |
|                |          | 2^(nd) application 30 days after first   |
|                |          | application                              |
+----------------+----------+------------------------------------------+

Maize Fertilizer

+----------------+----------+------------------------------------------+
| Formula        | Rate     | Application                              |
+----------------+----------+------------------------------------------+
| Clay soil      | 30-40    | 1^(st) application for 3-5 days plant    |
|                | kgs./rai | germination or basal application         |
| 16-8-8,        |          |                                          |
| 16-12-8,       |          | 2^(nd) application 30-45 days after      |
| 16-20-0,       |          | first application                        |
| 25-7-7         |          |                                          |
|                |          |                                          |
| Sandy soil     |          |                                          |
|                |          |                                          |
| 16-8-8,        |          |                                          |
| 16-16-8,       |          |                                          |
| 18-12-6,       |          |                                          |
| 25-7-7         |          |                                          |
+----------------+----------+------------------------------------------+

Cassava Fertilizer

+----------------+----------+------------------------------------------+
| Formula        | Rate     | Application                              |
+----------------+----------+------------------------------------------+
| 16-8-8,        | 30-40    | 1^(st) application, basal application    |
| 16-12-8,       | kgs./rai | before planting or after planting 1      |
| 18-12-6,       |          | month                                    |
| 25-7-7         |          |                                          |
+----------------+----------+------------------------------------------+
| 12-9-21,       | 30-50    | 2^(nd) application, 2-3 months           |
| 15-7-18,       | kgs./rai |                                          |
| 20-8-20,       |          |                                          |
| 21-7-18,       |          |                                          |
| 12-10-18       |          |                                          |
| Premium,       |          |                                          |
|                |          |                                          |
| 15-15-15       |          |                                          |
| Premium        |          |                                          |
+----------------+----------+------------------------------------------+

Remark: Should apply after weed eradication

Para rubber Fertilizer

  ---------------------- ------------------- ----------------------------
  Formula                Rate                Age of Para rubber

  16-8-4, 25-7-7         0.2-0.4             less than 3.5 years
                         kgs./plant/year     

  14-4-9, 18-4-5,        0.6-0.8             3.5-7 years
  20-8-20                kgs./plant/year     

  15-7-18, 21-7-14,      1-1.5               over 7 years or after
  21-7-18                kgs./plant/year     tapping period
  ---------------------- ------------------- ----------------------------

Oil palm Fertilizer

+----+-----------------+------------------+--------------------------+
| Ye | Formula         | Rate             | Enhance Fertilizer       |
| ar |                 |                  |                          |
+----+-----------------+------------------+--------------------------+
| 1  | 25-7-7,         | 1.5              | - kieserite 0.2          |
|    |                 | kgs./plant/year  | kgs./plant/year          |
|    | 15-15-15        |                  |                          |
|    | Premium         |                  |                          |
+----+-----------------+------------------+--------------------------+
| 2  | 12-9-21,        | 3.5-6            | - kieserite 0.4-1        |
| -4 | 20-8-20,        | kgs./plant/year  | kg./plant/year           |
|    |                 |                  |                          |
|    | 21-7-14,        |                  | - borax 35-100           |
|    | 21-7-18,        |                  | gm./plant/year           |
|    |                 |                  |                          |
|    | 13-13-21        |                  |                          |
|    | Premium         |                  |                          |
+----+-----------------+------------------+--------------------------+
| Ov | 12-9-21,        | 5-7.5            | - 0-0-60 rate 1-2        |
| er | 13-13-21,       | kgs./plant/year  | kgs./plant/year          |
|    |                 |                  |                          |
| 5  | 20-8-20,        |                  | - kieserite 1            |
| ye | 21-7-18         |                  | kg./plant/year           |
| ar |                 |                  |                          |
|    |                 |                  | - borax 150              |
|    |                 |                  | gm./plant/year           |
+----+-----------------+------------------+--------------------------+

Remark: Please select only one product per each application.

Apart from producing and marketing chemical fertilizers, the Company’s
subsidiary, MC-Agro Chemicals Co., Ltd., also handle crop protection
products (agro-chemicals) for farmers to control and protect pest and
diseases. Product ranges include insecticides, herbicides, fungicides
and hormone & plant regulators.

Principal Services are to disseminate agricultural knowledge on the
correct usage of chemical fertilizers and agro-chemical products to the
farmers, aiming at educating farmers to help preserve the environment
from the use of chemical fertilizer and agro-chemical products.

2.1.2 Product of subsidiaries and associated companies

Subsidiary Companies

+-------------------+---------------------------------+---------------+
| Company           | Business Line.                  | Address       |
+-------------------+---------------------------------+---------------+
| MC Agro-Chemicals | Import and distribute both      | 581 Moo 4,    |
| Co., Ltd.         | technical pesticide and         | Bangpoo       |
|                   | finished product which used in  | Industrial    |
|                   | Agriculture, Public Health and  | Estate, Soi   |
|                   | Livestock. The business sector  | 12B,          |
|                   | includes the marketing of       | Sukhumvit     |
|                   | formulated, finished products,  | Road,         |
|                   | repacking service and quality   | Praekasa      |
|                   | control checks by modern        | Sub-district, |
|                   | laboratory.                     | Muang         |
|                   |                                 | District,     |
|                   | Policy on Dividends : No policy | Samutprakarn  |
|                   | on Dividend                     | 10280         |
+-------------------+---------------------------------+---------------+
| N.I.M. Co., Ltd.  | The Company is engaged in       | 205 United    |
|                   | liquid chemical storage tank    | Flour Mill    |
|                   | terminal operation for the      | Building,     |
|                   | storage of liquid chemicals     | 8^(th) Floor, |
|                   | mostly the raw materials for    | Ratchawong    |
|                   | use in various industries.      | Road,         |
|                   |                                 | Sa            |
|                   | Policy on Dividends: Dividend   | mphanthawong, |
|                   | will be allocated depending     | Bangkok       |
|                   | upon Company’s profit.          | 10100.        |
+-------------------+---------------------------------+---------------+
| Central Pacific   | Importer and distributor of     | 180-184       |
| (Thailand) Corp., | fertilizers, agro-chemicals,    | Ratchawong    |
| Ltd.              | minerals and etc.               | Road,         |
|                   |                                 | Sa            |
|                   | Policy on Dividends : None      | mphanthawong, |
|                   |                                 | Bangkok       |
|                   |                                 | 10100.        |
+-------------------+---------------------------------+---------------+
| TCCC Myanmar      | Importer and distributer of     | Lot No. C-15  |
| Limited           | chemical fertilizer in Myanmar. | & C-18,       |
|                   |                                 | Thilawa       |
|                   | Policy on Dividends : None      | Special       |
|                   |                                 | Economic Zone |
|                   |                                 | A, Yangon     |
|                   |                                 | Region        |
|                   |                                 | Myanmar       |
+-------------------+---------------------------------+---------------+

2.2 Marketing and Status of Industry and Competition

  2.2.1 Marketing

Chemical fertilizer is selling in both cash and credit. Selling prices
in cash will be cheaper than selling on credit. As most of the customers
are in the provincial area, remittance of draft or money transfer with 7
days will also be regarded as cash sales. Selling credit term will rely
on many factors such as competition, seasonal climatic conditions and
fertilizer grades. Since fertilizer is classified under seasonal
products, peak selling period will be in the rainy season, season is one
of the important factors in setting up marketing plan for the company.

(1) Marketing Strategies

Under the marketing principles:

  PRODUCT: The company emphasizes on manufacturing and importing good
  quality products that are well accepted by the farmers and help
  farmers boost up production and income.

  PRICE: The company has set the policy to sell quality products at
  optimal cost in order to help farmers increasing yield of production
  and able to compete in the world market.

  PLACE: The company provides distribution channel throughout the
  country by appointing dealers to facilitates the customer.

  PROMOTION: Sales promotion has been continuously enforced to increase
  the sales volume and to maintain product’s brand-name to be well
  recognized by customers. The sales promotion at various levels of
  customers includes:

- TV commercial and mass media

- Raffle at various level of customers

- Regular Dealers’ meeting and farmers’ meeting

- Advertising posters and banners

- Coordinating in Technical Meeting/Symposium

  PACKAGING : The company emphasizes on developing strong and attractive

  packaging designed to match with farmers demand and to resist

  rough handling during transportation.

(2) Marketing and Distribution Channels

Pricing and distributing process

Fertilizers are mainly delivered to the customers and farmers by
10-wheel trucks as contracted by the customers themselves to pick up the
fertilizers at the quantity as stipulated in each Delivery Order (D/O)
from the company’s warehouses. Price quotation is quoted by metric ton.
One metric ton will consist of 20 sacks and each sack contained 50
kilograms of fertilizers. The payment methods can be both cash and
credit. With cash payment, customers can obtained lower price than
credit payment.

Selling prices of fertilizers have to be approved by the Ministry of
Commerce under the law on commodity price and service B.E. 2542, which
abolished the law on commodity and anti-profiteering.

  (3) Distribution Channels

The company has dealers throughout the country.

The appointment of dealers will be considered under the following
criteria:

  1. No dealer has been appointed in such area or otherwise the existing

dealer does not perform well in expanding the outlet.

  2. Marketing area of the dealers must not duplicate each other.

  3. The dealers must have the fair financial status covering the
  business

  volume.

  4. The dealers must not be involved with illegal activities.

  5. Business in the first year must be in cash basis, or having to
  submit Bank

  Guarantee or having securities mortgaged for credit terms which has to
  be approved by the Company.

Dealer Flow Chart:

  (4) TYPE OF CUSTOMERS

  Type of customers and relationship

Customers are mainly local traders undertaking business on any one type
of the following businesses:

  ----------------------------------- -----------------------------------
  Type of Business Operations of the  Agricultural Institutions
  Customers                           

  1. Chemical fertilizer and          1. Agricultural Cooperatives
  agro-chemicals                      

  2. Chemical fertilizer              2. Farmers Groups

  3. Construction materials           3. Various Paddy Farming Groups

  4. Miscellaneous goods retailers    

  5. Drug store                       

  6. Agricultural produce trading     

  7. Rice mill operator               
  ----------------------------------- -----------------------------------

  (5) Structure of Revenue from Sales During the Past 3 Years

+-----------------------------+-----+-----+-----+-----+-----+------+
|                             | 2   |     | 2   |     | 2   |      |
|                             | 017 |     | 016 |     | 015 |      |
+-----------------------------+-----+-----+-----+-----+-----+------+
|                             | M   | %   | M   | %   | M   | %    |
|                             | ill |     | ill |     | ill |      |
|                             | ion |     | ion |     | ion |      |
|                             |     |     |     |     | B   |      |
|                             | B   |     | B   |     | aht |      |
|                             | aht |     | aht |     |     |      |
+-----------------------------+-----+-----+-----+-----+-----+------+
| Revenue from Local Sales    |     |     |     |     |     |      |
+-----------------------------+-----+-----+-----+-----+-----+------+
| Chemical Fertilizers        | 10, | 92  | 10, | 92  | 11, | 9    |
|                             | 235 | .90 | 952 | .50 | 495 | 4.68 |
|                             | .51 |     | .12 |     | .76 |      |
+-----------------------------+-----+-----+-----+-----+-----+------+
| Tot                         | 10, | 92  | 10, | 92  | 11, | 9    |
| al Revenue from Local Sales | 235 | .90 | 952 | .50 | 495 | 4.68 |
|                             | .51 |     | .12 |     | .76 |      |
+-----------------------------+-----+-----+-----+-----+-----+------+
| Revenue from Export         |     |     |     |     |     |      |
+-----------------------------+-----+-----+-----+-----+-----+------+
| Chemical Fertilizers        | 784 | 7   | 887 | 7   | 645 | 5.32 |
|                             | .28 | .10 | .82 | .50 | .90 |      |
+-----------------------------+-----+-----+-----+-----+-----+------+
| Total Revenue from Export   | 784 | 7   | 887 | 7   | 645 | 5.32 |
|                             | .28 | .10 | .82 | .50 | .90 |      |
+-----------------------------+-----+-----+-----+-----+-----+------+
| Revenues from Local Sales   |     |     |     |     |     |      |
|                             |     |     |     |     |     |      |
| And Export                  |     |     |     |     |     |      |
+-----------------------------+-----+-----+-----+-----+-----+------+
| Chemical Fertilizers        | 11, | 100 | 11, | 100 | 12, | 10   |
|                             | 019 | .00 | 839 | .00 | 141 | 0.00 |
|                             | .79 |     | .94 |     | .65 |      |
+-----------------------------+-----+-----+-----+-----+-----+------+
| Total Revenue from Local    | 11, | 100 | 11, | 100 | 12, | 10   |
| Sales And Export            | 019 | .00 | 839 | .00 | 141 | 0.00 |
|                             | .79 |     | .94 |     | .65 |      |
+-----------------------------+-----+-----+-----+-----+-----+------+
| Growth Rate from Sales (%)  |     | (6. |     | (2. |     | (16  |
|                             |     | 90) |     | 48) |     | .02) |
+-----------------------------+-----+-----+-----+-----+-----+------+

2.2.2 Status of Industry and Competition

Overall Thai Economy in 2017

Thai economy saw an above-expected expansion in 2017. Despite the
relatively modest government spending compared to 2016, the burgeoning
tourism sector and surging export in the latter half of the year, as a
result of improving global economy, accelerated the economic growth. In
addition, the recovery of demand for private consumption and private
investment prompted by higher confidence made the economic expansion
clearer. As a result, Thailand’s GDP grew by 3.9% in 2017, marking the
country’s fastest pace in the past 4 years.

The agricultural sector in 2017 grew by 6.2% from the previous year. The
increase was due to the better cultivation condition especially in the
lower northern and upper central part of Thailand along the Chao Phraya
river basin. Moreover, the recovery of Thailand’s trading partners such
as Japan, China, Europe and the US also stimulated demand for Thai
agricultural exports. For the agricultural production, it expanded by
5.87% while the agricultural prices dropped by 2.74% from the previous
year. Consequently, the expansion in agricultural production was
partially offset by the reduction in prices, making the farm income
increase by only 2.97% in 2017.

Chemical Fertilizer Industry in 2017

Thailand’s chemical fertilizer consumption remained unchanged at 4.6 –
4.7 million metric tons in 2017. Despite the agricultural production
expansion, there were several factors putting negative pressures on the
chemical fertilizer demand. Firstly, the lower prices of agricultural
products such as rice, rubber and oil palm discouraged farmers to use
the fertilizer. Moreover, the maize cultivation control policy in the
highland of the country’s upper northern part also significantly
affected the chemical fertilizer demand. In addition, the floods in
several areas such as in the Northeast from July to September and in the
South during the last two months of the year were the important factors
that hindered the chemical fertilizer demand in 2017.

In 2017, the Company cooperated with the government in several policies
and projects. The major ones were adhering to the fertilizer price
control measure, participating in public private partnership project to
support agricultural production factors organized by Thailand Ministry
of Agriculture and Cooperatives, and collaborating in blue flag public
private project organized by Ministry of Commerce.

Thailand Economy in 2018

The Thai economy is expected to perform better in 2018. The higher
growth is primarily driven by the accelerated expansion of global
economy, government spending and public investment, as well as higher
consumer’s confidence. Nevertheless, the risks still remain. The
upcoming election is likely to shift the country’s political landscape
and thus affects confidence and overall economy. The policy direction of
the US, the tension in Korean Peninsula and the monetary policy changes
of the big economies are the key issues to monitor as they can
eventually impact the Thai economy outlook in 2018.

Chemical Fertilizer Industry in 2018

Office of Agricultural Economics estimates that Thai agricultural sector
in 2018 will grow by 3.0 - 4.0% with the increase of 3.5 – 4.5% in
plantation. These figures are supposedly favorable for the overall Thai
chemical fertilizer industry. However, the uncertainties still remain.
The uptrend in raw material prices and the continuing low purchasing
power of farmers can negatively affect the industry. The price
fluctuations especially in rice, sugarcane, para rubber and oil palm
will determine the industry outlook as the lower agricultural price
could halt farmers from starting their cultivations. In addition, the
undesirable level of water supply and weather conditions could also
affect the farming activities and consequently weaken the chemical
fertilizer demand in 2018.

2.3 Production and Product Procurement

Thai Central Chemical Public Company Limited (TCCC) is Thailand's
largest producer and distributor of compound chemical fertilizers. The
Company operates 2 large and international-standard plants, having the
combined total capacity of 1.2 million metric tons a year.

1^(st) Plant: 284, Kilometer 17.5^(th), Suksawad Road,

Tambon Pakklong Bang Plakod,

  Amphoe Phra Samut Chedi, Samut Prakan Province 10290

Telephone: (662) 462-5904, 463-3715-20, 463-5572-5

462-7870-7

Fax: (662) 816-1276 816-1263 816-1268

2^(nd) Plant: 50 Mu 5, Nakhon Luang-Phachi Road,

Tambon Khlong Sakae, Amphoe Nakhon Luang

Phra Nakhon Si Ayutthaya Province 13260

Telephone: (035) 359 011-9

Fax: (035) 359 377

Warehouses

  Hat Yai 124 Moo 1, Thakam Sub-district, Hat Yai District,

  Songkhla Province 90110, Thailand

  Tel. (6674) 333-035-7 Fax: (6674) 333-034

(1) PRODUCTION CAPACITY AND OUTPUT:

  Production, Production Capacity:

(Unit : Metric Tons)

  ------------------------------- ------------- ------------- -------------
                                  2017          2016          2015

  Production Capacity             1,200,000     1,200,000     1,200,000
  ------------------------------- ------------- ------------- -------------

  (2) RAW MATERIAL SOURCES OF SUPPLY

Raw materials and main sources of supply:

  --------------------------------- -------------------------------------
  Ammonium Sulphate                 Thailand, China, South Korea

  Urea                              Kuwait, Indonesia, Malaysia, China,
                                    Bahrain

  MAP(Mono-Ammonium Phosphate) and  Morocco, Saudi Arabia, China, Russia,
  DAP (Di-Ammonium Phosphate)       Australia

  Potassium Chloride                Canada, Germany

  KAOLIN                            Thailand
  --------------------------------- -------------------------------------

Almost 80% of raw materials for the production process are imported and
the rest such as Ammonium Sulphate and kaolin are acquired locally.
Since raw material prices are fluctuated following the international
market price trend which will be mainly based on demand and supply of
each time interval or each year; therefore, the Company has laid down
the policy to procure raw material from many nearby supply sources in
different locations and entering into long term contract. This will
ensure that there is less risk on shortage of raw material and the raw
material will meet the Company’s required specification at the
appropriate price. Procurement from some suppliers will be on FOB term
and shipped by chartered vessels to Thailand for the best benefit in
term of international trade.

  (3) PRODUCTION PROCESS

+----------+-----------------------------------------------------------+
|          | 1.  Store each raw material in its individual warehouse   |
+----------+-----------------------------------------------------------+
|          | 2.  Deliver each raw material by belt conveyor to the     |
|          |     automatic weighing machine                            |
+----------+-----------------------------------------------------------+
|          | 3.  Pass through the crusher and then the mixer which     |
|          |     controls steam and water as prescribed                |
+----------+-----------------------------------------------------------+
|          | 4.  After mixing homogeneously, the product will be       |
|          |     delivered to the Granulator                           |
+----------+-----------------------------------------------------------+
|          | 5.  Deliver the product to the Dryer to control moisture  |
|          |     content in accordance with the fertilizer standards   |
|          |     (3% maximum)                                          |
+----------+-----------------------------------------------------------+
|          | 6.  Fertilizer granules will be screened through mesh     |
|          |     size control. Offsized granules will be recycled      |
|          |     through the process.                                  |
+----------+-----------------------------------------------------------+
|          | 7.  Standard granules will be delivered to the Cooler to  |
|          |     make it cool in order to avoid caking                 |
+----------+-----------------------------------------------------------+
|          | 8.  The cooled granules will then pass through the        |
|          |     coating process by spraying coating agent to prevent  |
|          |     moisture absorption                                   |
+----------+-----------------------------------------------------------+
|          | 9.  The processed products will be delivered by belt      |
|          |     conveyor to the Bulk Storage for further packing      |
+----------+-----------------------------------------------------------+

[]

3. Risk Factors

The Risk Management Committee of Thai Central Chemical Public Company
Limited has reviewed and considered key risk factors that are critical
to the Company together with relevant risk management plans. The major
business risks in 2018 are as follows:

1.  Climate changes

Demand of chemical fertilizers changes according to climate conditions
that are the key factors affecting the Company’s business performance.
For example, during 2015 – 2016, Thai agricultural sector was affected
by severe drought in main crop seasons, and insufficient irrigation
water for off-season cultivation. This resulted in decrease of farming
areas or delay in cultivation, especially for rice which is the crop
that needs much water. On the other hand, when flood damages occurred in
certain areas in the country in 2015, farmers could cultivate only in
limited areas. As a result, these events caused lower demand of
fertilizer. These climate changes would have adverse impact on the
Company’s performance.

  Risk management

The Company keeps monitoring on weather conditions to adjust marketing
and production plans in consistency with the farming situation and to
control inventory at the optimum level in each season.

2.  Farmers’ purchasing power

Not only overall economy situation but changes in crop prices in local
and international markets are also the key factors that could affect
farmers’ purchasing power of agricultural materials including chemical
fertilizers. This problem is mainly caused by the inconsistency between
low demand and high supply of agricultural crops in the market,
resulting in decrease of farmers’ purchasing power. Drop of crop prices
causes decrease of farmers’ income, that makes farmers’ purchasing power
reduce, and this leads to decrease of fertilizer demand at the end. In
addition, such problem would impact farmers’ payment ability to dealers,
which might also cause delay of payment from the dealers to the Company,
respectively.

Risk Management

The Company has a variety of fertilizer products which are for rice,
vegetables, fruits, rubber etc., not relying on particular agricultural
crops. By focusing more on high demand crops, the Company can mitigate
the risk of low demand of specific crop’s fertilizer. In addition, trade
credits provided to dealers have been regularly reviewed to avoid
overdue payment or bad debts.

3.  Fluctuation of raw material prices

The Company imports majority of raw materials from abroad for fertilizer
production. Therefore, change of raw material prices might significantly
affect fertilizer production cost, product pricing, as well as profit
making ability of the Company. In general, raw material price fluctuates
according to international market situation as raw materials are
commodity goods whose prices are depended on several uncontrollable
factors, e.g. global economy, weather condition, crop prices, oil price,
price-changed speculation, etc. Should the Company is able to manage the
selling price to be in line with change of raw material cost, such
fluctuation shall have minimal impact to the Company’s performance.
However, chemical fertilizer is one of controlled goods subject to the
Goods and Services Prices Act B.E. 2542 in which the Central Committee
on Goods and Services Prices, Department of Internal Trade, Ministry of
Commerce (“the Committee”) has issued an announcement to suggest that
the selling prices of specific formulas of chemical fertilizer shall not
exceed the suggested prices, except obtaining approval from the
Committee. Therefore, the Company may unable to adjust selling prices
against an increase of raw material prices as governed by the price
control policy above, resulting that selling price of fertilizers does
not reflect actual cost. The Company’s expected performance might not be
achievable from this event.

  Risk Management

The Company manages the risk by controlling inventory both of raw
materials and finished products. From time to time, the Company monitors
market conditions and flexibly revises production plan in accordance
with market demand, then further adjusts the procurement plan of raw
materials in order to keep inventory at the optimum level and mitigate
effects of raw material price fluctuation.

In addition, the Company uses best endeavor to adjust selling prices
reflecting actual cost. Upon occurrence of any events causing production
cost significantly risen up, the Company shall promptly request for
increase of fertilizer selling price to the Committee.

4.  Government Policies

As agriculture is the key industry in Thailand, Thai government
regularly prescribes policies or measures to aid farmers. Some of these
policies would directly affect the Company’s business. For instance, the
Central Committee on Goods and Services Prices, Department of Internal
Trade, Ministry of Commerce, when it is needed, requests fertilizer
producers to undertake measures to decrease retail prices of fertilizers
in certain formulas. When such price control policy may not be
consistent with fertilizer prices in the global market, it might
negatively impact the Company performance.

Risk Management

The Company has a policy to cooperate with the government to support
farmers. At the same time, the Company can focus marketing effort on
other formulas which are not affected from the price control policy to
mitigate the impact.

5.  Fluctuation of the currency exchange rate

As majority of raw materials are imported from international suppliers
abroad, the Company has to make payment mainly by US Dollar. Therefore,
there is a risk that the Company would be affected by the fluctuation of
currency exchange rate. For instance, payments of raw materials would
increase when Thai Baht against US Dollar depreciates on the payment
date, or revenues converted from exported products would decrease when
Thai Baht against US Dollar appreciates on the settlement date.

Risk management

When the Company makes contracts based on the foreign currency, the
Company also enters into a forward exchange contract with financial
institutions. Under this practice, changes of currency exchange rate
would have low impact to the Company as it has been fixed already, and
the Company is also able to determine the cost and the selling price
precisely based on the fixed exchange rate.

6.  Dependence on limited number of suppliers

Certain raw materials required for production can be produced and
supplied by a limited number of suppliers. Such dependence on limited
suppliers might cause short supply than expectation, late delivery than
production and sales schedules, or unreasonable price increase.
Therefore, dependence on limited number of suppliers would be risk
factors affecting the Company’s performance.

Risk Management

The Company uses best endeavors to explore potential suppliers of
required raw materials, and allots procurement transactions into
different suppliers to reduce the dependent risk. Currently, the Company
has several sources to import single fertilizers i.e., Nitrogen from
Middle East countries such as Kuwait, Bahrain, Qatar and China,
Phosphorus from Saudi Arabia and China, and Potassium from Canada and
Germany. For compound fertilizers, the Company mainly import from Russia
and China. Therefore, there is no raw material supplied by a single
source to the Company at present. In addition, the Company sometimes
makes purchasing contracts in a specific period enabling suppliers to
estimate the Company’s demand so that they can properly reserve and
prioritize on the Company’s order.

7.  Plant Operation

The Company’s production capability is a critical factor of the business
success. Therefore, any damage, loss, or interruption relating to
production process, inventory, product distribution caused by
uncontrollable factors e.g., severe weather, natural disasters, fire,
machinery breakdown, and lack of infrastructure are risk factors of the
Company’s performance. For example, the great floods in 2011 caused
damages to the assets, interrupted production and distribution
activities at the plant in Nakhon Luang District, Ayutthaya Province.

Risk Management

The Company operates the production by two plants, i.e., Phrapradaeng
Plant at Samut Prakan Province, and Nakhon Luang Plant at Ayutthaya
Province. Even in the case one plant cannot operate because of emergency
matters, the other plant can operate and total shutdown can be
prevented. In addition, the plants implement a preventive and
forecasting maintenance program to ensure production stability and
reduce unexpected shutdowns. Notwithstanding the foregoing, the Company
has the insurance covering property damages as well as business
interruption in order to ensure that undesired events will be under
acceptable level.

8.  Foreign Investment

The Company has sought more opportunities in neighboring countries to
expand its business. In 2016, the Company established a branch office in
Yangon, Myanmar, and also established TCCC Myanmar Limited, a subsidiary
with the registered capital of 12.5 million US Dollar. TCCC Myanmar
Limited started the construction of a fertilizer packing plant at
Thilawa Special Economic Zone in Myanmar from January 2017 and completed
the construction in February 2018. Its commercial operation will start
from April 2018. Nevertheless, this foreign project has several risk
factors connected to the Company’s business performance. For example,
foreign currency exposure, changing governmental laws and regulations,
skills and knowledge of local labors, inflation, purchasing power of
local customers and farmers.

Risk management

The Company closely monitors the economic, social, and market situation
in Myanmar in order to have effective operation using the Company’s
strength of low cost from large procurement and production volumes as
well as a variety of products that can support demand of variety of
farmers. Furthermore, the Company has provided necessary resources such
as funding, machineries and equipments, and qualified personnel to
ensure that the project will achieve the business target.

9.  Controlling persons

Sojitz Corporation (“Sojitz”) and ISTS (Thailand) Co., Ltd. (“ISTS”),
the related person of Sojitz pursuant to Section 258 of the SEC Act,
collectively own approximately 83.46 percent of the Company’s share
capital. Therefore, they can control voting in the shareholder meeting
on significant agenda, e.g., dividend, capital increase, related party
transaction, acquisition or liquidation of asset, etc. as their votes
are more than 75 percent of the total votes. In this matter, rights to
vote are solely rights of each shareholder. Therefore, the Company is
unable to control voting of such shareholders to be in accordance with
the Company’s direction or not conflict with interests of minority
shareholders.

  Risk Management

The Company has strictly complied with related rules, regulations and
laws upon proceeding of voting in the shareholder meeting. Moreover, the
Company has prepared information of such matter delivered to all
shareholders together with the notice prior to the meeting date. The
notice states details of such matter, history, reason, necessity and the
Board’s opinion for consideration by shareholders before attending the
meeting. In addition, shareholders will be able to ask questions in the
meeting and the Company has a person in charge of such matter to provide
clarification to shareholders so that they can make an appropriate
decision in each agenda.

4. Assets for Use in Business Operation

(1) The company’s main assets for use in business operation are as
    following.

    1.  Land with building thereon which is the location of the
        Phrapradaeng Plant Site at 284, Kilometer No. 17.5, Suksawat
        Rd., Pakklong Bang Plakod Sub-District, Phra Samut Jedee
        District, Samut Prakan Province approximately 98 rai of area,
        including machines in the fertilizer production process. The
        Company has ownership over such assets. There is no burden
        attached to such assets.

    2.  Land with building thereon which is the location of the Nakhon
        Luang Plant Site at 50 Moo 5, Nakhon Laung-Pachee Rd., Khlong
        Sa-Kae Sub-District, Nakhon Luang District, Phra Nakhon Si
        Ayutthaya Province approximately 106 rai, including machines in
        the fertilizer production process. The Company has ownership
        over such assets. However, land and building thereon is under
        mortgage with Bangkok Bank PCL for various kinds of debt at the
        amount of THB 637.7 million. The machines are also under
        mortgage with Bangkok Bank PCL for various kinds of debt at the
        amount of THB 580.9 million.

(2) The company has other asset for business operation as follows:

2.1 Trademark

The Trademark License Agreement between the Company and Metro Co., Ltd.
(“Metro”) has been made on February 2, 2004 with conditions briefly
concluded as follows:

Trademark Owner : Metro

License Period : Indefinite Period

Licensed Trademarks : Altogether 19 trademarks including OX Trademark

  Condition : Irrevocable and exclusive rights to use the trademarks

  domestically and internationally with agro-chemical and fertilizer
  products.

Royalty Fee : One time payment at the total of THB 960 Million paid

  in cash and in kind.

5. Legal Dispute

At present, the Company has no significant legal dispute.

6. General and Other Information

1. Information of the Company

Name: Thai Central Chemical Public Company Limited (TCCC)

  Head Office: 21/35-46 Thai Wah Tower 1, 14-16^(th) Floor., South
  Sathorn

  Road, Thungmahamek, Sathorn, Bangkok 10120

  Business: Manufacturing and Distributing of chemical fertilizer and

  Agrochemical

Registration No.: 0107536000277 (previously, Bor Mor Jor. 101)

Telephone: (662) 639-8888

Fax: (662) 639-8999

E-mail: mailbox@thaicentral.co.th

Home Page: http://www.tcccthai.com

  Registered Capital: THB 1,754,148,354

  Number of Share: 584,716,118 ordinary shares

  Par Value: THB 3.00

Amount and type of shares sold: 584,714,068 ordinary shares

  2. Information of juristic persons of which the Company has
  shareholding more than 10%

1)  MC Agro-Chemicals Co., Ltd.

  Head Office: 581 Moo 4, Bangpoo Industrial Estate, Soi 12B, Sukhumvit
  Road, Praksa Sub-district, Muang District, Samutprakarn 10280

  Business: Import and distribute both technical pesticide and finished
  product which used in Agriculture, Public Health and Livestock. The
  business sector includes the marketing of formulated, finished
  products, repacking service and quality control checks by modern
  laboratory.

  Shareholding: 99.99%

  Telephone: (662) 709-4517-9

  Fax: (662) 709-4780

  Registered Capital: THB 50,000,000

  Number of Share: 500,000 ordinary shares

  Par Value: THB 100

Amount and type of shares sold: 500,000 ordinary shares

2)  N.I.M. Co., Ltd.

  Head Office: 205 United Flour Mill Building, 8^(th) Floor, Ratchawong
  Road, Chakrawad, Samphanthawong, Bangkok 10100

  Business: The Company is engaged in liquid chemical storage tank
  rental and terminal operation for the storage of liquid chemicals
  mostly the raw materials for use in various industries.

  Shareholding: 51%

  Telephone: (662) 222-7352

  Fax: (662) 224-5616

  Registered Capital: THB 125,000,000

  Number of Share: 12,500,000 ordinary shares

  Par Value: THB 10

Amount and type of shares sold: 12,500,000 ordinary shares

3)  Central Pacific (Thailand) Corp., Ltd.

  Head Office: 180-184 Metro Building, 5^(th) Floor, Ratchawong Road,
  Chakrawad, Samphanthawong, Bangkok 10100.

  Business: Importer and distributor of fertilizers, agro-chemicals,
  minerals and etc.

  Shareholding: 49%

  Telephone: (662) 225-0200

  Fax: (662) 622-7978

  Registered Capital: THB 200,000,000

  Number of Share: 2,000,000 ordinary shares

  Par Value: THB 100

Amount and type of shares sold: 2,000,000 ordinary shares

4) TCCC Myanmar Limited

Head Office: Lot No. C-15 & C-18, Thilawa Special Economic

  Zone A, Yangon Region Myanmar

Business: importer and distributer of chemical fertilizer in Myanmar.

Shareholding: 99.99%

Telephone: (+95) 1 377 806

Fax: (+95) 1 382 684

Registered Capital: USD 12,500,000

Number of Share: 125,000 ordinary shares

Par Value: USD 100

Amount and type of shares sold: 125,000 ordinary shares

3. Information of other referees

1) The registrar of ordinary shares

  Thailand Securities Depository Co., Ltd.
  93 Ratchadaphisek Road, Dindaeng,
  Bangkok 10140
  Telephone : (662) 009-9000 Fax: (662) 009-9991

2) Auditor for the financial year 2017

Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd 

AIA Sathorn Tower, 23^(rd)-27^(th) Floor, 11/1 South Sathorn Road,
Yannawa, Sathorn, Bangkok 10120 Thailand

  Tel : (662) 034 0000 Fax : (662) 034 0100

Company’s Auditor

1.  Mr. Manoon Manusook Certified Public Accountant No. 4292

2.  Mr. Chavala Tienpasertkij Certified Public Accountant No. 4301

3.  Ms. Nisakorn Songmanee Certified Public Accountant No. 5035

Investors can also find more information of the company issuing
securities from the company’s Annual Registration Statement (Form 56-1)
which is show on website www.sec.or.th or company’s website
www.tcccthai.com