Message from Chief Executive Officer

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Amidst the backdrop of global economic uncertainty, Thai Wah Public Company Ltd continues to grow in 2018 in terms of scale and scope in pursuit of our vision to be a regional leader in starch and food related products.

2018 was a challenging year for raw materials, which saw a 50% decline in supply mainly due the onset of the Cassava Mosaic Virus and the lack of harvesting crop in Thailand, Cambodia and Vietnam. As such, raw material prices increase faster than selling prices, resulting in a drop in earnings compared to previous years.

We have addressed this volatility by significantly improving and strengthening our supply chain through farm development, partnerships and embarking on new projects working with contract and small holder farmers, as well as expanding our portfolio of crop raw material including other starches such as Sweet Potato, Rice, Mung Bean and Arrowroot. Secondly, the acquisition and consolidation of TDC (Tapioca Development Corp) represents a continuing shift towards moving towards higher value starch derivatives, such as modified starch used for a range of growing categories such as bakery, diary, yoghurt and mixes.

Despite these short term headwinds, we remain focused on operational excellence and delivering value for our customers. Our Rose brand remains the number 1 brand for food-grade tapioca starch in China and Taiwan and ASEAN markets, and we continue to develop the brand and export globally to over 20 markets. Thai Wah participated in several international trade fairs such as FI Asia and IFT, and our China office continues to do well as a direct channel to our key Chinese customers. Customer and brand loyalty is one of our key competencies that we continue to relentlessly defend and differentiate ourselves.

Our food business witness strong double digit growth in categories such as rice noodle and channels such as Modern Trade. Within the Indo China and CLMV region, our food and noodle products are now on the shelves across Vietnam, Cambodia and Myanmar. Thai Wah Vietnam opened in 2018 and our sales have doubled, where we now serve over 1000 point of sales in Southern Vietnam. We are at the beginning phase of a long term strategy to win in the food business in Vietnam for our relevant categories.

Innovation and Sustainability remain at the core of our long term vision. In 2018, we signed 3 partnerships and MOU with local and overseas research institutions for long term research and development work in starch technology, processing and new formulations. We continue to have a healthy and robust innovation pipeline, having launched 4 new products in 2018 and will continue to keep up this healthy momentum into the near term. The future of starch and food products is a secular long term growth trend, given rising demand for food products from different markets and dynamics consumer shifts in tastes and textures.

Although net profit decreased in 2018 compared to previous year, we remain a strong net cash position. Core to our operating ethos is to take a disciplined view towards all new investments by measuring Returns on Invested Capital: in line with generating strong equity returns for shareholders in the long run. As part of our long term commitment to shareholders to increase absolute dividend each year, we remain focused on improving operating cash flow as one of our key metrics. This filters down to the way that we manage sales, margins, supply chain management and working capital.

All-in-all, the Company's net profit for the period from 1 January to 31 December 2018 based on its consolidated financial statements amounted to Baht 197 million (Baht 0.24/share). On this note, the Board of Directors has resolved to recommend a dividend payment of THB 0.32 per share in respect of the full financial year ended December 31, 2018 which is subject to shareholders' approval at the Company's Annual General Meeting on 26 April 2019.

We are also happy to share and announce that TWPC has been was selected as one of the Outstanding Investor Relation Awards at the 2018 SET awards as well as granted the Collective Action Against Corruption (CAC) certificate, in recognition of our commitment towards good corporate governance, transparency and disclosure. What motivates our team at Thai Wah every day is doing the right thing for our stakeholders - farmers, customers, associates and partners.

We remain focused, disciplined and passionate for the long term: in relentless pursuit of creating value from Farm to Shelf. We thank you for your continued support!

Mr. Ho Ren Hua
Chief Executive Officer