Fuyao Glass Industry Group Co., Ltd. Business Report FY ended Dec. 2014
|FY ended Dec. 31, 2014||FY ended Dec. 31, 2013||Increases (%)||Factors|
|Sales||12,928.18||11,501.21||12.41||The sales of automotive products increased due to:
-The increase of the sales of automotive glass;
-Specializing in automotive glass, and reinforcing sales and customer services
-Strengthening R&D and the development of high value-added products.
|Operating profit||2,591.60||2,258.07||14.77||The profits increased due to:
-Putting quality management into practice with continuous improvement;
-The Company announced that its revenues from the sale of automotive glass in 2014 reached CNY 12,439.37 million, up 14 percent from those of 2013. Sales outside China increased 17.05 percent year-on-year, representing the company's increased competitiveness in the international market. Sales in China also grew year-on-year, by 12.46 percent. The rate of increase exceeded the vehicle production growth rate in China that stood at 7.3 percent. The company's share in the Chinese market has continued to increase as well.
Acquisition-The Company announced that Fuyao Automotive North America, a overseas subsidiary of the Company, completed the acquisition of PPG Industries’ Mt. Zion Plant in Illinois in August 2014. Fuyao and the U.S.-based PPG signed an agreement on this acquisition plan on July 17, 2014. In accordance with the agreement, Fuyao will pay USD 56 million to purchase the plant's two float glass production lines, land, building, and other facilities including railroad sidings. Fuyao plans to rebuild and retrofit these two production lines to manufacture automotive float glass. These materials will be supplied to Fuyao Automotive North America, which aims to meet growing local demand while reducing cost. The Fuyao Group has spent USD 400 million in its U.S. operations, including the new Zion facility.
-Fuyao Automotive North America set up a subsidiary, Fuyao Glass Illinois Co., Ltd. (tentative name) in Illinois, U.S. in July 2014, which will produce automotive float glass.
-Baoding Fuyao Glass Co., Ltd. was established in Hebei province in March 2014, which is invested by Fuyao Group Beijing Futong Safety Glass Co., Ltd., a subsidiary of the Company.
Liquidation-Fuyao Hainan Float Glass Co., Ltd. completed the registration of cancellation procedures in May 2014.
-Fuyao Group Tongliao Co., Ltd., a subsidiary of the Company said its new automotive float glass production line has begun operating in September 2014. This line has the capacity to produce 450 tons of molten glass per day and its annual float glass production capacity is expected to reach 110,000 tons. In October 2014, the products are officially off this production line, and the company will also inaugurate another float glass production line with a daily capacity of 600 tons by the end of October. The total investment in these two new production lines has reached CNY 1,200 million. The lines are expected to boost the company’s annual automotive float glass capacity to 300,000 tons.
-The Company announced that it signed a strategic partnership agreement with BYD Auto in March 2014. In accordance with this agreement, the two companies will collaborate on acquiring business resources. BYD Auto has used Fuyao's glass on a number of models including the F0, F3, F6, S6, M6, Surui, Sirui, and the KA series. (From a press release on May 14, 2014)
Pass the Test
-Guangzhou Fuyao Glass Co., Ltd., a subsidiary of the Company, passed the final pre-production testing on the production line to make products for Guangzhou Toyota’s new Highlander in January 2015. (From a press release in January 2015)
-Fuyao Glass (Chongqing) Co., Ltd., a subsidiary of the Company, received the Excellent Supplier Award 2014 and the Quality Supplier Certification from Changan Automobile. The company has won the OEM’s Excellent Supplier Award for the ninth consecutive year. (From a press release in January 2015)
-The Company announced that it has received the Excellent Supplier Award 2013 from General Motors of the U.S. This is the fifth time that the Company has won this award since 2008. (From a press release on April 3, 2014)
Annual Sales Plan for Next Year-The Company plans to reach 14,302.67 million yuan sales for the year 2015.
|FY ended Dec. 31, 2014
|FY ended Dec. 31, 2013
|FY ended Dec. 31, 2012
|Ratio of R&D expenses to operating income||4.01%||3.38%||2.31%|
|Name||Fuyao Technical Center|
|Overview||-The technical center currently conducts its R&D activities in 10 divisions: the automotive glass research center; construction glass research center; float glass research center; the research center for cutting-edge technology; CAE/CAM application research division; technical information and patent division; inspection and testing center; planning and project management division; production equipment technology center; and dies and jigs research and development center.
-The center was certified as a national level research facility in September 2006.
-The Company can design automotive glass with automobile plants synchronously and sets up four design centers in the world's major automobile production and sales area.
-In 2014, the Company applied and granted 112 patents, among which there are 25 for new inventions.
Capital Investment Projects
|(As of Dec. 31, 2014)|
|Projects||Planned amount of investment
|Amount invested in 2014
|% so far invested of the total planned investment
|Fuyao Group Tongliao's two float glass production lines upgrading project||830.00||544.55||92%||98%|
|Automotive glass project in Russia||1,296.32||49.98||68%||70%|
|Renovating two automotive float glass production lines in U.S.||1,231.94||490.98||45%||45%|
|Fuyao Automotive North America's automotive glass project||1,227.90||228.37||19%||19%|
Investment in China
-The Company announced that it is constructing a new plant in the Wuhan Economic & Technological Development Zone. The Company will invest CNY 300 million in this project. The plant will have a land area of 66,700 square meters, and will be able to produce safety glass for 1.5 million vehicles per year. Annual sales at this facility are expected to reach nearly CNY 300 million. (From news releases issued by multiple sources on April 1, 2014)
-The Company announced that Fuyao (Shenyang) Automobile Glass Co., Ltd., its subsidiary, will invest CNY 200 million in the second phase of a plant construction project, which is scheduled to be completed by the end of 2014. The new plant will have the capacity to produce safety glass for 1.5 million vehicles per year. The subsidiary has already constructed factory buildings in the first phase of the project by investing CNY 230 million. The second phase of the project will include purchasing and installing new production equipment. (From an announcement by the company on February 25, 2014)
Investment Outside China
-The Company announced that it will increase its stake in North American subsidiary Fuyao Automotive North America by USD 200 million. Fuyao Automotive North America will set up a subsidiary, Fuyao Glass Illinois Co., Ltd. (tentative name) in Illinois, U.S., and invest USD 200 million in the subsidiary to construct an automotive float glass production plant. The Company says it will renovate two automotive float glass production lines at Mt. Zion to be acquired from PPG Industries. (From the company's announcement on July 29, 2014)
-Fuyao Automotive North America, the overseas subsidiary of the Company, will invest USD 15.3 million to expand its Orion Township facility in Michigan, U.S.A. The expansion is likely to create over 100 new jobs on new auto glass production lines. Fuyao Automotive North America will receive USD 1 million from the Michigan Strategic Fund and will also get preferential tax treatment from the Orion Township. Fuyao Automotive North America supplies automotive glass for customers including Chevrolet, Buick, Jeep, Dodge, Hyundai and Kia. (From a press release on April 21, 2014)