The board of directors of China Petrochemical Development Corporation resolved to cease one caprolactam (CPL) production line at the Toufen plant. Cause of the event: (1) Due to the impact of the COVID-19 pandemic in 2020, and the unfavorable factors of the unrelenting production expansion in China, the growth in demand for caprolactam in Taiwan has continued weakened. As a response,the Company's Toufen plant has lowered the CPL production and switched to a single-line operation.

(2) Since the market situation has not recovered, considering that the CPL production facility at Toufen plant is relatively old, despite various improvement measures have been implemented, the cost competitiveness is still lower than that of other production lines, the management team evaluates the prospects for improving the profitability of caprolactam production at the Toufen plant are dim, and transformation is necessary. On December 27, 2023, the board of directors decided that it is in the Company's best interests to cease production of one CPL production line at the Toufen plant to enhance the company's competitiveness and long-term shareholder value.