Asahi Glass Co., Ltd. Business Report FY2011

Business Highlights

Financial Overview

(in million JPY)
  FY2011 FY2010 Rate of change (%) Factors
Sales 1,214,672 1,288,947 (5.8) -
Operating Profit 165,663 229,205 (27.7) -
Ordinary income 166,739 226,806 (26.5) -
Net income 95,290 123,184 (22.6) -
Glass segment
Sales 553,339 555,999 (0.5) 1)
Operating Profit 9,855 18,286 (46.1) -


Glass segment
- Overall sales of automotive glass decreased from the previous year due to the effects of the great earthquake in Japan and the huge flooding in Thailand. Sales, however, grew in Russia and China.

Business strategy

Based on the mid-term business plan called "Grow Beyond-2012", the Company aims to enhance profitability of its existing business, while building a sustainable growth structure.

1. Enhancing profitability of its existing business

- The Automotive Glass Division is working on accelerating development and proposal of new products that offer enhanced energy saving feature and comfort levels. It also aims to advance its production technique and propose optimum products that best meet the requirements of respective markets to its customers.
- In FY2011, the Company entered into a strategic business alliance with Interpane Glas Industrie AG of Germany, a specialist in the glass coating technology.

2. Building a sustainable growth structure
- The automotive glass division is focusing on developing high-performance products such as heat shield glass and lightweight glass for environmentally friendly vehicles, as well as reinforced, UV cut glass for front door windows that can block 99 percent of ultraviolet rays.
-The automotive glass division is looking to tap into the new markets such as Brazil, while improving its presence in Russia, China, Thailand, Indonesia, and India.
- In FY2011, the Company decided to establish a production facility in Brazil to manufacture architectural and automotive glass. 

Development outside Japan

- The Company announced on December 21, 2011 that its European subsidiary AGC Glass Europe (AGEU) and a German glass manufacturer Interpane Glas Industrie AG (IP) have agreed on acquisition of a 51 percent stake in IP by AGC. Hereafter, the two companies will develop mutually complementary activities in terms of business regions and products for manufacture and processing operations of glass products. Through the strategic alliance with IP, the AGC Group will reinforce its presence in new areas such as glass coatings by offering new products in construction, automobile and solar panel applications in the German market. (From an article in the Nikkan Jidosha Shimbun on December 22, 2011)

- The Company, Tokyo, Japan announced on Dec. 15, 2011 that it will establish a production and sales company in Wuxi City, Jiangsu Province, China for cathode materials for the lithium-ion batteries (LiB) used in mobile devices and EVs. AGC Seimi Chemical Co., Ltd. (headquarters: Chigasaki, Kanagawa Prefecture, Japan), a 100% subsidiary of the company, will make Wuxi Tongda New Energy Technology Co., Ltd., a Chinese LiB cathode materials manufacturer, its subsidiary. The new subsidiary will be called Seimi Tongda Lithium Energy Co., Ltd. and start production around April 2012. While AGC Seimi Chemical produces LiB cathode materials at its Kashima Plant, Ibaraki Prefecture, Japan, this new plant in China will double the AGC Group's production capacity of cathode materials. (From an article in the Nikkan Jidosha Shimbun on December 16, 2011)

- The Company announced on April 25, 2011 that it will be making inroads into the automotive and construction glass markets in Brazil. With an investment of approximately 40 billion yen, The company will set up a 100 percent-owned new company in Sao Paulo and build float furnaces for production of raw glass plates for automobile and construction use, and production equipment for laminated and tempered automotive glass and construction glass. They will go into operation in phases after 2013. The new plant, which will be named "AGC Vidros do Brasil Ltda.," expects to manufacture automobile glass for 500,000 vehicles a year by 2016. It will employ about 500 workers in 2016, planning to have annual production capacity of 220,000 tons of float glass. (From an article in the Nikkan Jidosha Shimbun on April 26, 2011)


- The Company announced that UV Verre Premium, a UV-blocking tempered glass product, is installed in Fuji Heavy Industries' Subaru Impreza as an option. UV Verre Premium is tempered glass for automotive front door windows. (From a press release on November 30, 2011)

- The Company announced that UV Verre Premium, a UV-blocking tempered glass product, is installed in Suzuki Alto Lapin 10th Anniversary Limited Edition. UV Verre Premium for automotive front door windows filters out approximately 99% of the sun's ultraviolet (UV) rays. (From a press release on November 21, 2011)

>>>Financial Forecast for the Next Fiscal Year(Sales, Operating Income etc.)


R&D Expenditure

(in million JPY)
  FY2011 FY2010 FY2009
Overall 46,442 39,399 44,958
Glass business 8,466 8,174 9,611
R&D expenditures at the Glass Division as a % of overall R&D expenses 18.2 20.7 21.4

- The Group plans to spend approximately 50,000 million yen in R&D activities in 2012.

R&D Structure

- The automotive glass division conducts research and development activities in three regions: Europe (Jumet and Fleurus, Belgium); Japan (Sagami, Aichi, Yokohama); and the U.S.A. (Detroit, Michigan).

R&D Activities

Glass business
- The Company is developing chemical strengthening glass used as cover glass for mobile phone displays and other products. It is considering expanding its applications also to other areas, including environmentally friendly vehicles, construction materials, and solar technologies.
- The Company is developing glass melting and forming technology with the aim of reducing environmental burdens and slashing product costs.
- The Company is developing high value-added products in the area of display materials and energy saving glass by integrating glass, chemicals, and ceramics technologies.  

Product development

Glass technology using polycarbonate
- The Company has begun proposing its glass technology using polycarbonate (PC) resin to automakers, which are striving to develop and produce lighter vehicles. The technology features a three-layer structure made of ultra-thin glass (less than 1 millimeter in thickness), an interlayer film and PC resin. Although the product requires rather high cost, the company expects its application to the side windows of high-end vehicles, in which a high level of sound insulating properties is required. (From an article in the Nikkan Jidosha Shimbun on June 30, 2011)

Investment Activities

Capital Expenditure

(in million JPY)
  FY2011 FY2010 FY2009
Overall 152,700 117,400 124,900
Glass business 50,400 34,600 45,900
Capital investment at the Glass Division as a % of overall capital expenditures 33.0% 29.4% 36.7%

- Major investment projects at the glass business for FY2011 included retooling and installing additional coating equipment to increase productivity.  

- The Group is planning to invest approximately 190,000 million yen in plants and equipment in 2012.