AGC Restructures, Plans to Focus on Auto Glass and
Solar Cell Operations
Asahi Glass Co. Ltd. (AGC) has announced that it will stop operations
on three float glass production lines and two architectural coating
lines from April to December of this year, and will sell the glass
fabrication business. Asahi Glass will concentrate its management
resources on glass for solar cells, sales of which are expected
to grow rapidly, as well as raw glass for automotive use and value-added
building products, according to a press release issued by the Tokyo-based
In the flat glass business in North America, Asahi Glass has been
working on a profitabilityimproving project since 2006 including
an overhaul of management and shut down of the Cinnaminson Plant
of subsidiary AGC Flat Glass North America Inc. (AFNA). However,
company officials say the continued decline in the housing market
in North America has created a serious oversupply situation.
The company plans now to focus on the solar cell market, which it
expects to grow by 40 percent annually on a global basis, automotive
glass and value-added building products.
It has also decided to stop operations of float glass at the Victorville
Plant, the St. Augustine Plant and Line No. 1 at Greenland Plant
of AFNA, hoping to improve the supply-demand balance of glass and
raise the utilization rate of other production facilities. By these
measures, Asahi Glass will decrease its glass production capacity
in North America by about 40 percent.
As for architectural sputter coating lines, which have an excessive
output capacity compared with the size of the market, Asahi Glass
has decided to stop operations at the Victorville Plant and Hampton
Plant of AFNA and concentrate production of its full commercial
and residential product range at the Abingdon plant. Moreover, it
has decided to sell the glass fabrication business to focus on core
glass production and coating technologies.
With this new structure, AFNA officials say the company will be
better able to focus resources and management attention on product
innovation and improving cost and quality to better serve customers'
As a result of this restructuring program, Asahi Glass expects to
incur an extraordinary loss of 13.5 billion yen in the second quarter
of fiscal year 2008. However, there will be no change in the outlook
for the fiscal year 2008, since the loss has already been factored
According to the press release, approximately 800 AGC employees
will be affected by the changes.
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