Japan’s Asahi Glass announces plan to shut automotive plant

15 April 2009 11:17  [Source: ICIS news]

TOKYO (ICIS news)--Japan’s Asahi Glass (AGC) will cease production of automotive glass at its plant in Kitakyushu by the end of 2009 due to a decline in demand, a company official said on Wednesday.

This would reduce AGC’s total domestic automotive glass capacity from 7m car units to just below 6m, according to the official.

“We have manufacturing bases of automotive glass throughout the world, but ceasing production at one of our three bases in Japan was a big decision for the company, which will cause us pain,” the official said.

Due to significant decreases in automotive glass demand in Japan since the third quarter of 2008, the operating rate of AGC’s automotive glass business had decreased to 50%, the company said in a statement.

In December 2008 AGC had reduced operations at glass factories around the world to 70%.

AGC expected to incur yen (Y) 5bn ($50m) in extraordinary losses in the fiscal year ending December 2009 as a result of the Kitakyushu closure, the company said.

However, the producer did not plan to revise its forecast because consolidated earnings projections for the current fiscal year, announced on 6 February, had factored in extraordinary losses of Y60bn, it added.

($1 = Y98.81)

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By: Tomomi Yokomura
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