Asahi Glass Announces Reduction of CRT Glass Capacity, Ceases Production in Taiwan and Indonesia

Asahi Glass has decided to gradually stop operations of some of its production furnaces at overseas CRT glass production bases by the end of September this year, according to the company.

Under a restructuring plan, the company will reduce its CRT glass production capacity by about 35% by stopping all operations in Taiwan (Pacific Glass, one panel production furnace) and Indonesia (P.T.Video Display Glass Indonesia, one funnel production furnace) and also by stopping a total of four production furnaces at other production bases.

This decision is in line with the company's policy to restructure the production system of its CRT glass business to improve profitability as part of an important measure for "JIKKO-2007," the three-year medium-term management plan started in 2005.

As a result, the company's CRT glass production capacity decreased about 50% from 2004 when the company had the largest capacity for such production.

The company projects demand for CRT glass used in PCs and TVs will decline to about 200 million units for the fiscal year ending December 2006, from around 264 million units in fiscal 2004, due to a rapid shift towards TFT LCDs.

From fiscal 2005, profitability of the company's CRT business sharply deteriorated, hurt by a fall in sales volume, a drop in sales prices and a surge in the costs of raw materials and fuel.

Due to the decline in demand for CRT glass, Asahi Glass carried out various measures, including the withdrawal from CRT glass production in Japan and the US but also deciding to restructure its production system because such decline is expected to continue in the future.

The company will continue panel and funnel production in Singapore, Thailand, China and South Korea for its CRT glass business, noted the company.

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600450 Asahi Glass Announces Reduction of CRT Glass Capacity, Ceases Production in Taiwan and Indonesia
Date: 25 July 2006

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