Asahi Glass Co., Ltd. Business Report FY ended Dec. 2013

Business Highlights

Financial Overview

(in million JPY)
  FY ended Dec. 31, 2013 FY ended Dec. 31, 2012 Rate of change (%) Factors
Sales 1,320,006 1,189,952 10.9 -
Operating Profit 79,894 101,751 (21.5) -
Ordinary income 63,143 86,621 (27.1) -
Net income 10,333 43,790 (76.4) -
Glass segment
Sales 664,239 562,140 18.2 1)
Operating Profit (13,068) (662) - -


1) Glass segment
-Sales during 2013 increased 10.9 percent year-on-year. Delivery decreased in Japan where vehicle production fell, but the delivery volume was high in Europe, Asia and North America. The weaker yen also contributed to growth in sales. 

Recent Business Outside Japan

-The Company is poised to increase supply of its automotive tempered glass that blocks ultraviolet and infrared ray, targeting the overseas markets. While the adoption of its IR/UV blocking glass is expanding among vehicles built in Japan, installation is limited to only a few models when it comes to those destined for exports. Building on the strong demand in Japan, the Company aims to win more orders from advanced countries as well as emerging countries, with local production in China or other developing nations in mind to boost capacity. Taking advantage of the launch of a new product, the Company is going to promote replacement of existing glass with the new technology. (From an article in the Nikkan Jidosha Shimbun on Mar. 2, 2013)

-The Company said its Brazilian subsidiary, AGC Vidros do Brasil Ltda., has started the initial stage of production of architectural glass and automotive glass. Construction of the plant began in November 2011 with an investment of approximately JPY 40 billion. The plant is located in Guaratingueta, Sao Paulo State. The plant is expected to produce 220,000 tons of float glass, and process automotive glass for 500,000 vehicles per year in 2016. It will create 500 jobs by 2016. (From an article in the Nikkan Jidosha Shimbun on October 22, 2013)

-In 2013, the Company will gradually wind down production at a photovoltaic cover glass plant in China and will convert it into an automotive glass plant. The new plant will be established at the Company's subsidiary, AGC Flat Glass (Suzhou) Co., Ltd. (AFS) in Suzhou, Jiangsu Province, China. The plant will be AGC's third plant in China. Selling prices for the cover glass of solar cells are rapidly dropping due to excessive supply. Therefore, the Company has decided to convert the facilities into an automotive glass plant with an investment of about JPY 4.5 billion. Production at the plant will start in the first quarter of 2015.

Outlook for FY ending Dec. 31, 2014

(in billion JPY)
FY ending Dec. 31, 2014
FY ended Dec. 31, 2013
(Actual Results)
Rate of change (%)
Sales 1,400.0 1,320.0 6.1
Operating Profit 75.0 79.9 (6.1)

-The Company expects that deliveries to an emerging market will be increased due to the robust demand in the area of automotive glass business in 2014.

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


R&D Expenditure

(in million JPY)
  FY ended Dec. 31, 2013 FY ended Dec. 31, 2012 FY ended Dec. 31, 2011
Overall 46,882 48,360 46,442
-Glass segment 8,529 8,053 8,466

-The Group plans to spend approximately JPY 45,000 million in R&D activities in FY ending Dec. 31, 2014.

R&D Structure

-The Company's Technology Division consists of following centers and functions:

  • The Research Center develops new materials, products and basic technologies
  • The Production Technology Center conducts research and development of manufacturing technology and equipment
  • The Engineering Center develops engineering technologies, and performs maintenance of production equipment
  • The Intellectual Property Center analyzes and applies for intellectual property rights, and formulates and implements related strategies
  • The Technology Planning Office develops and plans technological strategies, and engineers new products and manufacturing technologies

Technology Licensing-out Agreement

(As of Dec. 31, 2013)
Company Country Contractual coverage Contract period
PT Asahimas Flat Glass Tbk Indonesia Provision of manufacturing technology for float glass Ten year from Jan. 1, 1993. (automatic extension every year thereafter)

Product Development

Tempered and laminated glass that can block UV rays
-The Company's two glass products for automotive windows have earned the Skin Cancer Foundation's Seal of Recommendation. The two products are UV Verre Premium Series tempered glass and Lamisafe laminated glass. The U.S.-based foundation is a leading international organization devoted to the prevention of skin cancer. The UV Verre Premium Series is the first automotive glass in the world that can block approximately 99% of UV rays. The UV rays are absorbed by a high-performance hybrid organic/inorganic coating on the interior side of the glass. The UV Verre Premium Series was launched in Japan in December 2010. It is used in the front doors of 25 car models in Japan to provide UV protection for the driver and passenger seats. The Company aims to increase the application of these products in the global market starting with North America. (From an article in the Nikkan Jidosha Shimbun on October 28, 2013)

Investment Activities

Capital Expenditure

(in million JPY)
  FY ended Dec. 31, 2013 FY ended Dec. 31, 2012 FY ended Dec. 31, 2011
Overall 138,500 155,300 152,700
-Glass segment 73,800 58,400 50,400

-Major investment at the glass business for FY ended Dec. 31, 2013 included installing equipment for residential glass and automotive glass in Brazil factory.  

-The Group is planning to invest approximately JPY 140,000 million in plants and equipment in FY2014.

Investment Outside Japan

-In 2013, the Company will build a new plant for automotive laminated glass in San Luis Potosi, Mexico. The new plant is scheduled to start operations at the beginning of 2016. The Company withdrew from the Mexican market in 2007, so this will be its second entry into the country after nine years. The new company, AGC Automotive Mexico S.A. de C.V. (tentative name) will be a 100% subsidiary of the AGC Group. AGC will invest USD 60 million (JPY 5.9 billion) to build the plant with an annual capacity of automotive glass for 1.5 million vehicles. Initially in 2016, the plant will start operations with a capacity to produce the glass for 750,000 vehicles a year. The capacity and equipment will be expanded later depending on future demand fluctuation.