Asahi Glass Co.: To be Known as AGC

GlassonWeb: Asahi Glass Co., a manufacturer of many materials including LCD glass based in Japan, has chosen the acronym AGC as the unifying brand effective September 2007, which coincides with the company’s 100th anniversary. A globally integrated group management structure was initiated in 2002 and up until now Asahi Glass has maintained local and regional brands. For instance, Glaverbel based in Europe and AFG based in North America were both acquired and have retained their individual brand names. Although in the automotive glass industry the brand has been unified as AGC, this has not been the case for the flat glass industry. By unifying its brand to AGC on a global basis, stakeholders will easily be able to recognize the company. The central G is colored vermillion and symbolizes a flame-like energy and strength.

In other news, AGC cut its full-year profit forecast by almost half and booked 75 billion yen (about US$633 million) in writedowns. Profit will fall to 41 billion yen this year from a previous target of 76 billion. AGC reduced its forecast for the second time in two months and the new target would be the lowest profit since 2002. AGC is writing down the value of factories in North America and booking a one-time loss to exit a CRT operation in China. According to AGC, its North American flat glass business declined due to raw material price increases as well as intense competition. It is obvious why AGC is pulling away from CRT operations in China. AGC sold about 456 billion yen of flat glass in 2006, about 20% of the world’s $19 billion market for windows used in buildings and cars. The top 4 companies are Cie. de Saint-Gobain SA of France, Nippon Sheet Glass Co. of Japan, Asahi Glass, and Guardian Industries Corp. of the US. and control about 60% of the global market. While glass demand for CRT is shrinking, flat glass demand is stable according to AGC.

AGC stated that it would reduce the production of CRT glass by 25% and sell its entire 40% stake in its joint venture Shanghai Asahi Electronic Glass Co. to SVA Electron Co. by the end of March 2007. AGC said the transaction will result in a loss of 10 billion yen. The write down cost of its flat-glass subsidiary in North America will be 40 billion yen. With the restructuring plan, AGC expects a 41 billion yen net profit for 2006, below 76 billion yen it had forecasted previously.

This will allow AGC to concentrate its resources on growing markets such as LCD glass.

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