Asahi Glass Co. Ltd. Annual Report 2009

Plain-text annual report

A G C R e p o r t 2 0 0 9 ❷ ❹ ❸ ❺ ❶ ❻ About the photographs on the cover: ❶：Naberezhnaya Tower (Russia) ❷：Optical planar devices ❸：Fluon ® ETFE FILM ❹：Automotive glass ❺：TFT LCD glass substrates ❻：Avignon Station (France) ©AGC Flat Glass Europe AGC Report 2009 ASAHI GLASS CO., LTD. URL: http://www.agc-group.com Issued June 2009 *Soy ink is used for this Report Part of this report (from p. 1 to p. 32) is printed using “Morino Chonai-Kai Forest Thinning Support Paper,” realized by a partnership NPO supporting used paper recycling, and Iwaizumi city (Iwate pref., Japan), which is promoting forest restoration. One Group, One Name On Asahi Glass Company’s 100th anniversary in September 2007, we adopted “AGC” as the uniﬁ ed corporate brand for the entire AGC Group. Accordingly, each Group company, including overseas companies, incorporated ”AGC” in their legal names. By designating AGC as a globally uniﬁ ed corporate brand, we intend to strengthen the sense of community and cooperation among AGC Group employees while clearly communicating the AGC Group’s broad-ranging business domains to stakeholders in an easy-to-understand manner. Through such efforts, we will accelerate our global growth strategy. Nardini Distilleries Research & Events Center - Photographer M.Danesin - Architect M. Fuksas AGC Report 2009 Contents Top Message 2 Under the new Management Policy , we will build the foundations for growth. AGC Group Vision, Management Policy 4 5 AGC Group Vision, Management Policy Delivering Technology Solutions for Climate Change Second Round of Globalization Glass-Technology-Driven Company Medium-Term Management Plan 14 Research & Development creating the future of the AGC Group AGC Group Now 16 Corporate Data/Organization Data/Consolidated Financial Highlights 18 20 22 AGC Group around the World Outline by Business Segment Business Overview Glass Operations Electronics and Display Operations Chemicals Operations and Other Operations 28 30 31 32 AGC Group’s CSR Corporate Governance, Internal Control and Risk Management Board of Directors, Corporate Auditors and Executive Officers AGC Milestones 1907–2009 Communication Tools The AGC Group promotes communication with stakeholders through various measures. General corporate activities “AGC Report” Company brochure and annual report introducing the AGC Group’s vision as well as business highlights. (This report) Financial information “Financial Review” Report listing the AGC Group’s business outline and financial information including a consolidated financial statement. CSR activities “CSR Report” Report on The AGC Group’s social and environmental activities based on our “AGC Group Charter of Corporate Behavior.” Activities of each corporate site “Site Report” * On sites in Japan only Introduces environmental, workplace safety and health, security and disaster prevention and other activities at Asahi Glass plants and main Group companies. Comprehensive information Website Offers a broad introduction of the AGC Group through timely information disclosure. AGC Group Website http://www.agc-group.com Asahi Glass CSR Website http://www.agc.co.jp/ english/csr/ Asahi Glass Investor Relations Website http://www.agc.co.jp/ english/ir/ AGC Report 2009 1 Top Message Under the new Management Policy the foundations for growth. The year 2008 was a year of turbulence. While the AGC Group achieved record high operating income in the ﬁ rst half of the year, income and proﬁ ts declined in the latter half due to the impact of the global recession. It is not, however, the AGC Group alone that faces the challenges brought about by the economic crisis. What is important for the AGC Group is that we gather sufﬁ cient strength to prepare ourselves for the period of demand recovery, which is certain to come. We will not hold back, but continue to actively invest our resources in areas such as development of technology to prevent climate change, and cultivation of global-minded personnel. The new Management Policy to realize the AGC Group Vision. has been formulated The AGC Group believes that the prerequisite to corporate existence is to fulﬁ ll its social responsibility and to obtain trust from society. In addition, we aspire to meet the expectations of society and to continue to grow as a corporation. Upon assuming the post of President and COO last year, I formulated the new Management Policy realize the AGC Group Vision, in order to , announced in 2002. Crucial themes highlighted in are: “Build foundations for growth” and “Our people are our strength – each employee must exert their maximum strength aiming at growth as a whole Group.” We will build the foundations for growth, and aspire to become a true global company. The AGC Group will closely look at mid- to long-term changes in the market as we focus on the following three viewpoints to build the foundations for growth. 2 AGC Report 2009 , we will build 1 We will deliver technology solutions for climate change. to launch operations in new countries and regions that are expected to grow rapidly, such as BRICs, with Addressing climate change is a major issue for the a view to providing the best products to customers AGC Group, as this is relevant to the continuation of around the world. In order to gain acceptance in new our business. It also provides us with an important markets, we will strive to construct new business opportunity to contribute to society through our models tailored to the culture and practices of each business. Production of glass requires a large amount country. of energy. It is duly our responsibility to improve this situation, and the AGC Group is determined to make sincere efforts toward this end. We also ﬁ rmly believe that, we will be able to contribute to solutions for climate change, by leveraging our glass, chemicals Under the slogan of “Our People are Our Strength,” we will promote the growth of our employees and the Group. and ceramics technologies to develop high-efﬁ ciency The “people” are what performs various tasks and photovoltaic materials and energy-saving glass, and by thus supports the growth of the AGC Group. Under promoting global penetration of these products. the slogan of “Our People are Our Strength,” we will 2 Glass-technology-driven Company: provide opportunities that allow our employees who aspire to grow to exert their maximum strength, so We will serve new needs through they can grow with AGC Group. By creating a virtuous differentiation of the AGC Group’s core cycle of growth of both our people and the Group, we technologies. will gather strength as a company to assure continued The AGC Group will contribute to society around the growth of the Group. world by enhancing our core glass technology. We are, for example, developing technology that halves the Approximately 50,000 employees of the AGC Group energy consumption required for production. This will work in some 30 countries and regions with different enable dramatic improvement of production efﬁ ciency, commercial practices and social needs. Each employee as well as substantial reduction of both environmental will adopt and follow the four Shared Values in the burden and manufacturing cost. We will also provide Group Vision and fulﬁ ll their our products with higher added value by further social responsibilities in their respective countries and promoting integration of glass, chemicals and ceramics regions, as well as provide products and services with technologies. high added value. Through this approach, we are aiming at becoming a true global company that can 3 Second Round of Globalization: meet the expectations of society. We aspire to make a further leap forward as a global company. The AGC Group will continue to closely monitor and anticipate trend shifts in the world and reinforce our global management strength. The Group currently operates business in Asia, Europe and North America. In addition, we will work to take on new challenges Kazuhiko Ishimura President & COO AGC Report 2009 3 AGC Group Vision AGC Group Vision Through unceasing reform and innovation, we will accelerate growth under unified global management. To this end, all members of the AGC Group around the world share our Group Vision and continue to work in unison to take on new challenges. We, the AGC Group, “Look Beyond” to make the world a brighter place. As a global materials and components supplier, based on our core technologies in glass, fluorine chemistry and their related fields, we will continue to: … Anticipate and envision the future, … Have perspectives beyond our own ﬁ elds of expertise and … Pursue innovations, not becoming complacent with the status quo. By “Looking Beyond,” we will continue to create value worldwide, demonstrating the vast potential of the Group’s entire organization. Our Shared Values Our four Shared Values are to be adopted and followed by all members of the Group and are of the foremost importance in accomplishing Our Mission. These Shared Values, described below, will serve as the basis for every judgment we make and action we take collectively and individually. ■ Innovation & Operational Excellence We will continuously pursue innovations in technology, products, services, business models and human resources. We will continuously improve our operations for maximum efficiency and quality in every activity and at all times strive for the highest possible standard of performance. ■ Diversity We will respect individuals with different cultures, capabilities and personalities, and our global management will operate without regard to nationality, gender or background. ■ Environment We, as good global citizens, will shoulder the responsibility to contribute to a sustainable society in harmony with nature. ■ Integrity We will build open and fair relationships with all of our stakeholders based on the highest ethical standards. 4 AGC Report 2009 Innovation & Operational Excellence Diversity Integrity Environment Management Policy To achieve further growth as a leading global company with glass business as our core, we will closely look at mid- to long-term structural changes in the market and seize opportunities in a timely manner as we continue to operate under our Management Policy. and... Build foundations for growth of the AGC Group, looking at mid- and long-term structural changes in the global market Second Round of Globalization Building Foundations for Growth Delivering Technology Solutions for Climate Change Glass-Technology- Driven Company Embed the mindset of , the former management policy, as the AGC Group’s DNA Realize the full potential of our people under the slogan of “Our People are Our Strength” By around 2030, the global environment in terms of market structure, resources and energy is forecasted to change dramatically. China, South America, India and other countries are expected to be the major markets in addition to the advanced countries. There is a possibility that, against a background of growing nationalism over natural resources, shifting of manufacturing bases from consumption areas to raw material rich areas or countries where raw materials are cheaper, such as the Middle East and Russia, will become even more critical. Climate change will need to be addressed in a more serious and earnest manner. The AGC Group must anticipate and closely look at such changes and respond to them in a timely manner to continue to grow further as a leading global company with glass business at its core. The Management Policy has been formulated to lead the Group’s endeavors toward this end. means “grow and change” beyond conventional frameworks such as business areas, regions, markets and existing technologies. It places top priority on building the next foundations for growth. AGC Report 2009 5 Delivering Technology Solutions for Climate Change In order to contribute to the prevention of climate change, the AGC Group will further the development and promotion of products with high CO2 reduction effects such as those for photovoltaic use and fuel cells. In addition, we will actively implement measures to improve the energy efﬁ ciency of our production technologies as a glass and chemicals manufacturer consuming a large amount of energy. ● Group-wide promotion of solar business The photovoltaic market is expected to grow continuously. The AGC Group will gather its technological strength in the glass, chemicals and ceramics areas to cater to various types of photovoltaics. ● Approach to the development of technologies for reduction of CO2 emissions Production process: The AGC Group is working to realize practical application of an innovative technology called “in-ﬂ ight melting.” In-ﬂ ight melting is a method through which raw materials for glass are melted while in the air, using a combustion ﬂ ame, such as plasma, of 2,000 degrees Celsius or higher. In-ﬂ ight melting enables dramatic reduction of time required to melt and homogenize glass, and the production facility can be substantially smaller in scale compared to conventional furnaces, thus the energy consumption and CO2 emissions in manufacturing are expected to be halved. Products and business opportunities: The Group will venture into new growth areas including photovoltaic products, windows with high levels of thermal insulation and lightweight glass for automobiles. In addition, we will seek to expand our Chemicals operation in areas such as the development of technology for collection and decomposition of greenhouse gasses, and technology for high thermal insulation materials. 6 AGC Report 2009 ETFE ﬁ lm 解像度不足 Photovoltaic TCO glass substrates Stuttgart Art Museum (Low-E glass)/Germany ©AGC Flat Glass Europe Photovoltaic cover glass Glass tubes 解像度不足 Homes in amazing environment (double glazing with high thermal insulation)/Netherlands Glass frit Ceramics sputtering target AGC Report 2009 7 Second Round of Globalization We will make another leap forward as a global enterprise. Anticipating global changes in the business environment such as the growth of the BRICs, we will strengthen the Group’s global management capability and we will also start our business in areas where we have had no previous business operations in order to build new foundations for our future growth. ● Continuous development of business in new growth regions and cost-competitive areas We will strive to further increase proﬁ tability in Japan, Asia, Europe and North America where existing operational bases of the Group are located. We will also consider establishment of new business models, different from those in existing markets, in newly emerging markets that are expected to grow rapidly. In addition, we will enhance operations in the Shanghai base. ● Reinforcement of our global organization and management strength In order to roll out global operations, both our organization and our employees need the ability to think and act globally. We will further reinforce the Group’s global organizational capability in existing markets in Japan, Asia, Europe and North America, and build such capability in new regions at the same time. We will also endeavor to enhance our organization and management skills by cultivating human resources who can exert their full potential in a global arena, without regard to nationality, gender or background. 8 AGC Report 2009 Group members in Belgium Group member in the United States Group members in Thailand Group member in the United States Group member in Belgium Group member in China Group members in Japan Group members in Thailand Group members in Belgium Group members in the United Kingdom Group members in Russia AGC Report 2009 9 Glass-Technology- Driven Company We will differentiate our business by the following measures: to reﬁ ne the AGC Group’s glass technologies we have accumulated over years, to combine glass, chemicals and ceramics technologies to provide our customers with higher value, to save costs drastically through the innovation of production processes, and to develop new business models through the use of IT (Information Technology). ● Differentiation of glass-related technologies, the source of our growth As a Glass-technology-driven company, we have set three directions for our business operation: “create higher added value,” “achieve overwhelming cost-competitiveness through innovation of manufacturing processes” and “actively promote establishment of new business models that transcend typical manufacturing.” To this end, the AGC Group will enhance development of new glass compositions, develop high-quality materials through integrated operation, and establish innovative production technologies such as in-ﬂ ight melting. We will also enhance our production technology by fully utilizing our comprehensive strengths including technologies in chemicals and ceramics. ● Differentiation in the area of Electronics & Energy We will further reﬁ ne our technological strength created through integration of glass, chemicals and ceramics technologies in the Electronics & Energy area, which will become the engine for growth in the future. 10 AGC Report 2009 Antwerp’s Law Courts (Belgium) ©AGC Flat Glass Europe 解像度不足 Synthetic quartz glass Jigs for manufacturing semiconductors (Silicon carbide) Manufacturing process of electroforming refractory 解像度不足解像度不足 Group member in Germany TFT LCD glass substrates Group members in the United States Group member in Belgium Manufacturing process of ﬂ at glass Fluorinated water/oil-repellent coating material Micro glass lenses Manufacturing process of ﬂ at glass 解像度不足 AGC Report 2009 11 Medium-Term Management Plan “ ” The AGC Group has formulated a three-year Medium- Term Management Plan, “ starting in 2008, under its Management Policy ”, . The Group has been executing various measures to realize the basic concepts of the Management Plan, which are “Build foundations for growth” and “Enhance business strength and competitiveness.” Against the backdrop of the recent rapidly deteriorating economic conditions, we have added a new concept, “Responding to sudden changes in the business environment” to the Medium-Term Management Plan. We will respond ﬂ exibly to the change of demand by taking measures such as adjustment of production output while accelerating R&D activities and cultivation of human resources, through which we can gather our strengths in order to make huge leaps when demand recovers, which is surely to come. Group Vision, Management Policy and Action Plan 2004 2005 2006 2007 2008 2009 2010 2011 Group Vision Management Policy Shrink to Grow Action Plan (Medium-Term Management Plan) 12 AGC Report 2009 2007 S to G 2005 New Management Policy Concrete strategy, business strategy and its action plan to achieve the target in 2010 based on the new Management Policy *1 *1 Renamed from in 2009 2010 AGC Group Management Policy Medium-Term Management Plan ” “ Build foundations for growth Enhance business strength and competitiveness Current economic circumstances Respond to sudden change of business environment Four Major Issues in Building Foundations for Growth 1 Group-wide promotion of solar business While short-term growth is slowing due to deteriorating economic conditions, the solar business is expected to grow in the future as solar power draws wide attention as the next-generation energy. We will make group-wide efforts to promote the development of our solar business. 2 Addressing the climate change issue As a high energy-consuming glass manufacturer, the AGC Group will develop CO2 reduction technologies for production processes, as well as expand the use of technologies for reduction of CO2 emissions in our products. 3 Second round of globalization We will continuously develop and operate business in new growth regions and cost-competitive regions. 4 Execution of various measures across In-House Companies to become a glass-technology driven company We will leverage the strengths of the AGC Group, which possesses chemicals and ceramics technologies in addition to glass technologies, and pursue synergy across the entire Group. Reforming System toward the Enhancement of Business Strength and Competitiveness The AGC Group has implemented organizational ■ Glass Company*2 changes as of July 21, 2009. The former Flat Glass Company and the former Automotive Glass Company have been integrated to form “Glass Company” so as to further enhance competitiveness through seamless production and operation ranging from raw glass production, processing and making into ﬁ nal glass products. Also, the former Display Company and the former Electronics & Energy General Division have been integrated into the “Electronics Company.” By integrating core technologies in the respective ﬁ elds and generating differentiated technologies, we will establish a system that can supply the products catering to market needs in a further timely manner. *2 In-house Companies are business units that operate globally, generally with net sales of over 200 billion yen. Raw glass Process Final products Flat glass Automotive glass Enhance competitiveness through a seamless operation system ■ Electronics Company Display Electronics & Energy Enhance competitiveness through integration of core technologies AGC Report 2009 13 Research & Development Research & Development creating the future of the AGC Group Since its foundation, the AGC Group has developed its core technologies centered on glass, ﬂ uorine and chemistry, and ceramics technologies. We will work to realize the concepts articulated in the Management Policy application of our core technologies, based on the knowledge we have accumulated. through sophistication, combination and Plasma combustion ﬂ ame in an in-ﬂ ight melting furnace Core technologies — the driving force behind building the foundations for growth, and development of new businesses The AGC Group positions “glass materials and glass production technologies,” “coating technologies,” “optics and electronics technologies,” “ceramics material technologies” and “ﬂ uorine and chemistry technologies,” as well as “fundamental common technologies” that support the above, as its current core technologies. In turn, our Management Policy articulates “company-wide promotion of solar business,” “measures against climate change” and “Glass-technology- driven company” as the foundations for growth. We will strive to build the foundations for growth set forth in combination and application of our core technologies. through sophistication, Core technologies of the AGC Group and foundations for growth set forth in Core technologies Glass materials and glass production technologies Coating technologies Optics and electronics technologies Ceramics materials technologies Fluorine and chemistry technologies Fundamental common technologies Liquid crystal materials technology Refractory lining technology Fluorine chemistry technology Fine ceramics technology Electrochemistry technology Inorganic materials technology Sensing technology Equipment technology Evaluation and analysis technology Nanomaterials technology Simulation technology Photolithography technology Assembly technology Optical design technology Foundations for growth Glass materials design technology Dry coating technology Glass manufacturing technology Wet coating technology Glass forming and processing technology Patterning technology Company-wide promotion of solar business Measures against climate change Glass-technology- driven company 14 AGC Report 2009 We anticipate changes of the times and carry out seamless operations ranging from basic research to product development The AGC Group formulates a Technology Roadmap based on our Technology Outlook that looks at various trends with a long-term vision, and thereby sets the direction of our technology strategy. In R&D, the Research Center handles basic, long-term, innovative, and inter-business themes. Development Centers affiliated with the business departments of each In-House Company or Strategic Business Unit (SBU) enhance production technologies and undertake product development in close contact with customers. Meanwhile, the Engineering Center undertakes the development of innovative production technologies and equipment technologies. In addition, the Production Technology Development Center was established in 2008 to propel and promote the realization of a “Glass- technology-driven company.” Technology Outlook and Technology Roadmap, which deﬁne the direction of technology strategies We work to develop and create technologies, products and businesses in a timely manner by globally sharing our Technology Outlook and Technology Roadmap. Energy Population Resources etc. Construction/ Housing Transportation Electronics Energy Technology Outlook Transforming of global trends, microtrends Development and trends in customers’ industries Generating technologies, products, and businesses on a timely basis Technology Roadmap Current/new business domains, current/new technology domains Latest innovative technologies of the AGC Group Solar business Measures against climate change Measures against climate change Glass-technology-driven company “Transparent conductive oxide (TCO) ﬁ lm” improves power generation efﬁ ciency of thin ﬁ lm silicon solar cells “In-ﬂ ight melting technology” that halves the energy required during the glass production process The AGC’s TCO ﬁ lm has unique characteristics: high conductivity with low electric resistance and a very efﬁ cient solar light diffusion property. Although our ﬁ rst product, Type U TCO became the world’s standard, its ability to diffuse incoming solar light, measured by haze rate, was about 10%. AGC launched the Type VU TCO with improved haze rate and further unveiled the development of Type HU TCO, which can diffuse up to 90% of incoming solar light through our original nano-scale ﬁ lm forming technology. The unique concavoconvex shape of Type HU TCO makes it possible for the coating to reﬂ ect solar light in a more complex manner in order to conﬁ ne more light to the photovoltaic layer for superior power generation efﬁ ciency. The AGC Group also possesses a technology to coat TCO continuously onto ﬂ oat glass at the time the glass is produced. We will further endeavor, in our development activities, to meet the needs of customers. Thin-ﬁlm silicon type One of the technologies under development at the AGC Group to reduce CO2 emissions during the production process is the in-ﬂ ight melting technology. With this technology, granulated raw material mixtures are prepared prior to feeding them into the furnace. These granules are then injected into a furnace and instantaneously melted by a combustion ﬂ ame, such as plasma, at a temperature of over 2,000°C to produce high-quality glass without air bubbles, using a small amount of energy. Applied to mass production, this technology will enable halving CO2 emissions and energy consumption during the production process. In-ﬂight melting technology Conventional furnace In-ﬂight melting furnace TCO ﬁlm (brings out electricity & scatters light) Raw materials Combustion burner Melting Reﬁning / g n i t l e m i t h g ﬂ - n I g n i r r i t s d e e p s h g H i To forming process Granulated raw materials Raw materials High-speed reﬁning To forming process Solar energy Float glass Back electrode (brings out electricity) Thin-ﬁlm silicon (converts solar energy to electricity) Magniﬁed photo of the Type HU TCO ﬁlm Diffusion of light is improved by creating smaller concavoconvex on the surface of the larger one Energy consumption for glass melting could be reduced by more than half Extremely small-scale furnace Drastically shorter time for melting & reﬁning（within a second for in-ﬂight melting; several hours for homogenizing & reﬁning through high speed stirring） Energy consumption to melt glass Half Wall heat loss Exhaust heat loss Melting Conventional In-ﬂight melting AGC Report 2009 15 AGC Group Now Stuttgart Art Museum (Germany) ©AGC Flat Glass Europe To foster a deeper and clearer understanding of the AGC Group, we introduce our recent overall business-related activities in the following section. This includes a review of our business results for the fiscal year ended December 31, 2008, and an overview of each business segment, as well as a description of our corporate social responsibility (CSR) initiatives. 16 AGC Report 2009 Corporate Data ■ Name ■ Head Ofﬁ ce ■ Founded ■ Incorporated ■ Capital ■ Outstanding stock ■ Employees Asahi Glass Co., Ltd. 1-12-1, Yurakucho, Chiyoda-ku, Tokyo 100-8405 JAPAN September 8, 1907 June 1, 1950 90,873 million yen 1,186,705,905 shares 6,110 (non-consolidated) 47,770 (consolidated) ■ Consolidated Group companies 192 (151 overseas) As of the end of December 2008 Organization Data Corporate Auditors Board of Directors Management Committee Group Corporate Shared Service Centers, Research Center, etc. Glass Company *1 Electronics Company *2 Chemicals Company AGC Ceramics Co., Ltd. *1: The former Flat Glass Company and the former Automotive Glass Company have been integrated to form “Glass Company” *2: The former Display Company and the former Electronics & Energy General Division have been integrated to form “Electronics Company” Organizational changes implemented as of July 21, 2009 Consolidated Financial Highlights Net Sales Operating income Net income Total assets ¥1,444.3 billion ¥154.0 billion ¥39.2 billion ¥1,832.8 billion (billions of yen) Operating income (billions of yen) Operating income margin (%) (billions of yen) Total assets (billions of yen) Net assets (billions of yen) 1,620.5 1,681.2 197.5 69.6 136.6 8.4% 11.7% 10.7% 45.0 2,149.5 2,108.1 991.8 1,027.3 780.9 ’06/12 ’07/12 ’08/12 ’06/12 ’07/12 ’08/12 ’06/12 ’07/12 ’08/12 ’06/12 ’07/12 ’08/12 AGC Report 2009 17 AGC Group around the World As a global supplier of materials including glass, electronic materials, chemicals and ceramics, the AGC Group carries out its business activities in Japan, Asia, Europe and North America, backed by approximately 50,000 employees in roughly 30 countries and regions worldwide. Asahi Glass Co., Ltd. AGC Global Network Asahi Glass Co., Ltd. ◆ Japan ● AGC Glass Kenzai Co., Ltd. ● AGC Okinawa Glass Kenzai Co., Ltd. ● AGC Glass Products Co., Ltd. ● AGC Façade & Interior Engineering Co., Ltd. ● AGC Amenitech Co., Ltd. ● AGC Fabritech Co., Ltd. ● AGC Automotive AMC Co., Ltd. ● AGC Automotive ACC Co., Ltd. ● AGC Automotive Takahashi Co., Ltd. ● AGC Display Glass Yonezawa Co., Ltd. ● AGC Electronics Co., Ltd. ● AGC Techno Glass Co., Ltd. ● AGC Micro Glass Co., Ltd. ● Ise Chemicals Corporation ● AGC Si-Tech Co., Ltd. ● AGC Engineering Co., Ltd. ● AGC Seimi Chemical Co., Ltd. ● AGC Coat-Tech Co., Ltd. ● AGC Polymer Material Co., Ltd. ● AGC Green-Tech Co., Ltd. ● AGC Wakasa Chemicals Co., Ltd. ● AGC Matex Co., Ltd. ● AGC Ceramics Co., Ltd. ● AGC Research Institute Co., Ltd. ● AGC Insurance Management Co., Ltd. ● AGC Finance Co., Ltd. ● AGC Logistics Co., Ltd. ● AGC Technology Solutions Co., Ltd. Asia Thailand ● AGC Flat Glass (Thailand) Public Co., Ltd. ● AGC Automotive (Thailand) Co., Ltd. ● AGC Electronics (Thailand) Co., Ltd. ● AGC Techno Glass (Thailand) Co., Ltd. ● AGC Micro Glass (Thailand) Co., Ltd. ● AGC Chemicals (Thailand) Co., Ltd. ● AGC Technology Solutions (Thailand) Co., Ltd. Indonesia ●● P.T. Asahimas Flat Glass, Tbk ● P.T. Asahimas Chemical Singapore ● AGC Flat Glass Asia Paciﬁ c Pte. Ltd. ● AGC Electronics Singapore Pte. Ltd. ● AGC Chemicals Asia Paciﬁ c Pte. Ltd. ● AGC Singapore Services Pte. Ltd. Malaysia ● AGC Flat Glass (Malaysia) Sdn. Bhd. ● MCIS Safety Glass Sdn. Bhd. Philippines ● AGC Flat Glass Philippines, Inc. ● AGC Automotive Philippines, Inc. Taiwan ● AGC Display Glass Taiwan Co., Ltd. ● AGC Electronics Taiwan Co., Ltd. India ●● Asahi India Glass Co., Ltd. China ● AGC Flat Glass (Dalian) Co., Ltd. ● AGC Flat Glass (Suzhou) Co., Ltd. ● AGC Flat Glass Protech (Shenzhen) Co., Ltd. ● AGC Flat Glass (Hong Kong) Co., Ltd. ● AGC Automotive China Co., Ltd. ● AGC Automotive Foshan Co., Ltd. ● AGC Chemicals Trading (Shanghai) Co., Ltd. ● Zibo Asahi Glass Alumina Materials Co., Ltd. ● Zibo GT Industrial Ceramics Co., Ltd. ● Plibrico (Dalian) Industries Co., Ltd. ● AGC Shanghai Co., Ltd. Korea ● Korea Autoglass Corporation ● Hankuk Electric Glass Co., Ltd. ● Hanwook Techno Glass Co., Ltd. 18 AGC Report 2009 Japan Number of employees approx. 13,000 Net sales ¥810.8 billion Operating income ¥77.7 billion Main business Flat glass, automotive glass, display glass, electronic materials, chemicals, ceramics Asia Number of employees approx. 15,800 Net sales ¥419.1 billion Operating income ¥56.9 billion Main business Flat glass, automotive glass, display glass, electronic materials, chemicals, ceramics North America Number of employees approx. 4,700 Net sales ¥128.1 billion Operating income Main business ¥–4.4 billion Flat glass, automotive glass, electronic materials, chemicals Europe Number of employees approx. 14,300 Net sales Operating income Main business ¥355.3 billion ¥25.7 billion Flat glass, automotive glass, chemicals Italy ● AGC Flat Glass Italia S.r.l ● AGC Automotive Italia S.r.l Spain ● AGC Flat Glass Iberica S.A. Germany ● AGC Automotive Germany Gmbh Hungary ● AGC Automotive Hungary Ltd. Poland ● AGC Gdansk Sp. z o.o Turkey ● AGC Automotive Adapazari uretim san, ve tic. A.S. ● Flat glass ● Automotive glass ● Display ● Electronics & Energy ● Chemicals ● Ceramics ● Others As of end of April 2009, companies such as equity method afﬁ liates that do not incorporate the “AGC” brand in their names are included. AGC Report 2009 19 Sales by region (consolidated) Percentage of employees by region (consolidated) 21% 30% 27% Europe North America Asia 7% 24% 47% Europe Japan Japan North America Asia 10% 33% * Year ended December 2008 * Sales and operating income by geographic area are before eliminations, therefore the total amounts of sales and operating income for geographic areas do not agree with total sales and operating income. ● Asahi Glass Fine Techno Korea Co., Ltd. ● Asahi PD Glass Korea Co., Ltd. ● AGC Display Glass Ochang Co., Ltd. North America The United States ● AGC Flat Glass North America, Inc. ● AGC Soda Corporation ● AGC Automotive Americas Co. ● AGC Automotive Americas R&D, Inc. ● AGC Electronics America ● AGC Chemicals Americas, Inc. ● AGC America, Inc. ● AGC Capital, Inc. ● AGC Investment, Inc. ● AGC Holdings America, Inc. Canada ● AGC Flat Glass North America Ltd. ● AGC Automotive Canada, Inc. Mexico ● AGC Automotive Glass Mexico, S.A. de C.V. Europe Belgium ● AGC Flat Glass Europe S.A. ● AGC Flat Glass Coating ● AGC Flat Glass Roux ● AGC Automotive Europe ● AGC Automotive Belgium ● AGC Europe Netherlands ● AGC Flat Glass Netherlands B.V. ● AGC Automotive Replacement Glass Netherlands B.V. The United Kingdom ● AGC Automotive UK, Ltd. ● AGC Chemicals Europe, Ltd. Czech Republic ● AGC Flat Glass Czech a.s. ● AGC Automotive Czech a.s. Russia ●● AGC Bor Glassworks OJSC ● AGC Flat Glass Vostok LLC ● AGC Flat Glass Klin LLC France ●● AGC France S.A.S. Outline by Business Segment Glass Operations 2008 Overview Share of sales In the ﬂ at glass business, demand continued to weaken as the economy slowed down in Western Europe, as well as in fast-growing markets such as Russia during the fourth quarter. Shipments decreased in Japan as well. In addition, the AGC Group revised prices in Japan, Asia, and North America, however, this failed to offset all cost increases. On the other hand, shipments of glass for photovoltaic use remained strong. In the automotive glass business, sales decreased from the previous year because of a decline in auto production from the fourth quarter in all regions. Sales of other glass businesses fell from the previous year. The appreciation of the yen that developed toward the end of the year was also one of the factors contributing to the decline in net sales of each operation. 51.1% Year ended December 2008 Sales to customers As a result, net sales from the Glass operations for the year decreased 124.7 billion Net Sales/Operating Income yen, or 14.4%, from the previous year to 741.3 billion yen, and operating income decreased 45.0 billion yen or 70.7% to 18.7 billion yen. Main Products Flat glass • Float ﬂ at glass, ﬁ gured glass, polished wired glass, heat-absorbing glass, heat- reﬂ ective glass, architectural glass, fabricated glass for industrial use, etc. • Glass for photovoltaic use Automotive glass Tempered glass for automobiles, laminated glass for automobiles, etc. Other glass Lighting lamp glass products, Industrial glass products, etc. Net sales 1,000 800 600 400 200 0 Operating income 815.3 866.0 741.3 63.7 46.5 18.7 ’06/12 ’07/12 ’08/12 100 80 60 40 20 0 (billions of yen) Net sales Operating income Electronics and Display Operations 2008 Overview Share of sales 25.6% In the display business, shipments of glass substrates for FPDs signiﬁ cantly increased in the ﬁ rst half of this ﬁ scal year. However, overall sales for the whole year decreased from a year earlier, because, due to the operational adjustment at panel manufacturers, shipments of glass substrates for TFT LCDs decreased in the second half of the year. And also, overall shipments of display glass sharply declined in the fourth quarter. In the electronic materials business, although shipments of photonics components in particular continued to be steady in the ﬁ rst half of the year, they decreased in the Year ended December 2008 Sales to customers fourth quarter. Net sales of the electronic materials business as a whole decreased Net Sales/Operating Income from the previous year as a result of the AGC Group’s withdrawal from the business of small- and medium-sized display panels. Net sales Operating income As a result, net sales from the Electronics and Display operations for the year decreased 92.5 billion yen or 19.9% from the previous year to 372.7 billion yen, and operating income increased 8.4 billion yen or 7.1% to 126.6 billion yen. Main Products Display LCD glass substrates, PDP glass substrates, glass bulbs for cathode-ray tubes, etc. Electronic materials Glass frit and paste, materials for semiconductor-manufacturing equipment, synthetic quartz glass, optoelectronics materials, optical ﬁ lters for PDPs, LCD backlight glass tubes, optical thin ﬁ lm products, etc. 20 AGC Report 2009 400 300 200 100 0 500 476.6 465.2 126.6 118.2 372.7 79.2 ’06/12 ’07/12 ’08/12 (billions of yen) Net sales Operating income 150 120 90 60 30 0 Chemicals Operations Share of sales 2008 Overview In the chlor-alkali & urethane business, sales of the caustic soda continued to be steady. Sales of vinyl chloride-related products also remained robust overseas until the middle of 2008; but demand declined and price weakened in the fourth quarter. In the ﬂ uorochemicals & specialty chemicals business, demand rapidly declined in the fourth quarter. In response to price hikes of raw materials and fuels, the AGC Group revised its prices of products in both businesses. However, this failed to fully offset the increased costs. As a result, net sales from the Chemicals operations for the year decreased 16.2 billion yen or 5.1% from the previous year to 303.1 billion yen, and operating income decreased 8.6 billion yen or 69.0% to 3.9 billion yen. Main Products Chlor-alkali & urethane Vinyl chloride monomers, caustic soda, urethane materials, etc. Fluorochemicals & specialty chemicals Fluoropolymers, ﬂ uorinated gases and solvents, ﬂ uorinated water and oil repellents, battery materials, iodine-related materials, etc. 20.8% Year ended December 2008 Sales to customers Net Sales/Operating Income Net sales Operating income 350 300 250 200 150 100 50 0 307.6 319.4 303.1 12.4 7.8 3.9 ’06/12 ’07/12 ’08/12 (billions of yen) Net sales Operating income 20 15 10 5 0 Other Operations 2008 Overview Share of sales 2.5% In the ceramics business, earnings remained steady thanks to strong demand both in the glass engineering sector and the environmental energy sector. As a result, net sales from the Other operations for the year increased 8.9 billion yen or 10.2% from the previous year to 96.6 billion yen, and operating income increased 1.8 billion yen or 57.4% to 5.0 billion yen. Main Products Ceramics products, etc. Year ended December 2008 Sales to customers Net Sales/Operating Income Net sales 100 80 60 40 20 0 Operating income 96.6 5.0 84.1 87.6 3.3 3.2 ’06/12 ’07/12 ’08/12 5 4 3 2 1 0 (billions of yen) Net sales Operating income AGC Report 2009 21 Business Overview Glass Operations Glass Pyramid, Moerenuma Park (Photo by Shinkenchiku-sha) As part of our business foundation, we constantly strive to meet customer needs for superior performance by providing an extensive line-up of products, with a leading global share. Glass Operations covers businesses with focus on ﬂ at glass and its G Global market ranking* use in architectural, automotive, and solar (photovoltaic) ﬁ elds and maintains a leading share in these ﬁ elds on a global basis. The architectural ﬂ at glass business is operated on a regional basis, with regions devising their respective product line-ups matching the particular characteristics of their respective geographic regions. The automotive glass business is characterized by global scale and operation, in line with the requirements of an automotive industry that operates on a global basis. Flat glass AGC No.1 Automotive glass (new vehicle market) AGC No.1 *AGC estimates Low-E double-glazed glass featuring high insulation Low-E double-glazed glass is used in Margaret Hall, Photovoltaic cover glass “Solite™” and heat-shielding properties Sagami Women’s University Safety glass for automobile windshields that will Tempered glass for automobile side windows, hold together when shattered shock-resistant and specially treated to shatter into granules if broken 22 AGC Report 2009 Flat glass Automotive glass Expanding business by promoting enhanced use of glass for photovoltaic and energy-saving applications Developing high-value added products and expanding business in emerging markets The ﬂ at glass business currently operates approximately 40 ﬂ oat glass furnaces around the world, supplying a wide variety of glass products to markets in Europe, North America, Japan and Asia. It has been actively promoting a higher usage of energy-saving glass (Low-E double-glazed glass) and glass for photovoltaic use. The ﬂ at glass business undertakes manufacturing of glass in an environment-friendly manner through efﬁ cient processes that have minimal impact on the environment. The ﬂ at glass business has a well-focused marketing network to promote the use of glass products matching the local trends and characteristics of geographic regions. ”Benchmarking” and “Sharing of Best Practices” are the regular features that are being promoted in the pursuit of “Continuous Improvement” across the Group. The automotive glass business operates production in 14 countries, and has R&D centers in three regions: Japan, the United States and Europe. Through its global network, high-quality products and services are provided in a timely manner to the global production bases of automakers. In 2007, the Automotive Global Training Center opened within the Group’s Aichi Plant. By raising awareness of the AGC Group’s unique approach to “monozukuri (quality manufacturing)” around the globe, through the automotive glass business, we endeavor to become “the most respected automotive parts supplier in the world.” Photovoltaic TCO*1 glass substrates P A Automotive Global Training Center *1 TCO: Transparent Conductive Oxide ﬁ lm TOPICS Sale of PairPlus™ Ecoglass*2 for remodeling begins “PairPlus™” is glass that incorporates an attachment frame into double glazing so that the unit can be installed in a single glazing sash used in an existing Coolverre™: contributing to improved energy-saving performance of automobiles via glass technology house. This new glass features high energy-saving performance, which helps Coolverre™ is an automotive glass that blocks infrared rays (IR) and ultraviolet improve the energy efﬁ ciency of air conditioning in both summer and winter. rays (UV). It substantially blocks the median infrared rays that cause the Compared to a single sheet of glass, its insulation property is three times as skin to sense frizzling heat from sunbeams, thus dramatically reducing good, while its heat-shielding is twice as good. PairPlus™ is available in various the heat and unpleasantness felt by drivers. As a result, time and energy sizes, including a slim type that ensures smooth operation of screen doors. All required to lower temperatures by air conditioning is reduced. Coolverre™ product variations meet a 3-star or higher level based on the Grading System is an innovative thermal insulating laminated glass that realizes less energy for Energy Saving Building Materials*3. consumption and improved driving environment in an automobile. The AGC Group will cater to the needs of the rapidly growing remodeling Coolverre™ is the ﬁ rst IR-blocking laminated glass in the world that market, and commit itself to the improvement of the living environment, also features radio wave transmission, and it can be utilized with sensor devices contributing to the global environment at the same time, by enhancing the that use antennas and radio waves. efﬁ ciency of glass through the development of various new products. *2 Ecoglass is the trade name for low-emissive double-glazing products approved by the Flat Glass Manufacturers Association of Japan (including AGC). *3 Grading System for Energy Saving Building Materials An indicator of providing product quality information in relation to thermal insulation of individual windows, glass and sashes, in accordance with the Grading System Glass for Energy Saving Building Materials under the Energy Conservation Act (Act on the Rational Use of Energy). Stars are used to rate glass energy- Glazing beads incorporated into the attachment saving materials based on their JIS Existing sash thermal insulation performance ratings. A greater number of stars indicates higher thermal insulation performance. Normal windshields Glass that blocks ultraviolet rays (UV) and infrared rays (IR) ™ UV Glass IR (causes the skin to sense frizzling heat) Interlayer ﬁ lm Interlayer ﬁ lm + IR absorbent The structure of “PairPlusTM” Comparison between normal windshields and CoolverreTM AGC Report 2009 23 Business Overview Electronics and Display Operations We supply materials that are indispensable in numerous industries, and support the advancement of displays and other devices. Electronics and Display Operations covers businesses with focus on G Global market ranking* “display” and “electronic materials.” The display business offers Glass substrates for TFT LCDs Glass substrates for PDPs glass for all major types of displays, including thin ﬁ lm transistor liquid crystal displays (TFT LCDs) and plasma display panels (PDPs), and enjoys a leading share of the global market in this area. The electronic materials business deals with the areas, such as the technologies supporting the information and communications industry and fuel cells, which are expected to grow remarkably in the years ahead. AGC No.2 AGC No.1 No.1 *AGC estimates Glass substrates for PDPs Glass substrates for TFT LCDs Synthetic quartz glass Optical planar devices LCD backlight tubes Micro glass lenses 24 AGC Report 2009 Display Electronic materials Providing high-added value products through production processes with reduced environmental burden The AGC Group manufactures glass substrates for various types of displays, including thin ﬁ lm transistor liquid crystal displays (TFT LCDs), the current mainstream elements for LCD televisions, and plasma display panels (PDPs), as well as display glass for cathode ray tubes (CRTs). The AGC Group will develop and offer products with high added value by responding to various market trends that include the shift from CRTs to ﬂ at panel displays (FPDs) in addition to increasingly larger-sized LCD panels. The Group will also continue to improve its production system and enhance the productivity of existing facilities, as well as develop new production facilities. Creation of new businesses through promotion of speedy development The AGC Group is targeting electronics and energy ﬁ elds, focusing on the sectors of “semiconductor process materials,” “display materials,” “photonics components,” “storage materials,” and “energy materials” to cultivate this business as next-generation growth pillars. The Group will endeavor to create new businesses by reinforcing its production technologies to provide high-added value products utilizing our strength of integrated production starting from raw materials and through the promotion of R&D in growth areas such as optical planar devices, micro glass lenses for digital cameras and mobile phones. T The structure of LCD T The structure of hard disk drive Backlight tubes Polarizer Color ﬁlter Liquid crystal Glass substrates Magnetic recording ﬁlm Magnetic head Swing arm Glass substrates for hard disk drive Magnetic disks used to record information on personal computers are made by forming a ﬁlm of magnetic material on a glass substrate. A high degree of precision is required for this glass substrate, as even a microscopic irregularity will affect the forming of the ﬁlm. TOPICS Acquisition of a Korean company engaged in polishing large glass substrates for TFT LCDs Development of a new photosensitive insulating ﬁ lm for manufacturing of semiconductor devices In 2008, the AGC Group acquired a wholly owned Korean subsidiary of The AGC Group successfully developed a new photosensitive insulating Germany’s SCHOTT AG that engaged in polishing large glass substrates for ﬁ lm that makes use of ﬂ uorine chemistry, one of AGC’s core technologies. TFT LCDs, and established a new company, AGC Display Glass Ochang Co., The main target application of the new photosensitive insulating ﬁ lm Ltd. As the new company offers an ideal location for the AGC Group to (product name: AL-Polymer X2000 Series) is for multilayer interconnection respond to the growing market demand for TFT LCD glass substrates, the of semiconductor devices, which are becoming increasingly fast and Group positions AGC Display Glass Ochang as the second production base in miniaturized. Korea, following Asahi Glass Fine Techno Korea Co., Ltd., and will establish a The new product satisﬁ es the required performances, such as low- more ﬂ exible production structure in the country. temperature curing, a very low dielectric constant and loss, as well as high The Group will continue to expand facilities as necessary, while giving full ﬂ exibility, and thus facilitates multilayer interconnection. consideration to trends in demand for glass substrates as well as an increase in production capacity at its existing manufacturing facilities in Japan, South Korea and Taiwan, and will also stably supply products that meet the needs of customers by leveraging its strengths to the utmost in the ﬂ oat production method and technologies for polishing large glass substrates. Passivation AL-X2000 Pad Circuit component Pin Metal wiring Rewiring layer AGC Report 2009 25 Business Overview Chemicals Operations and Other Operations We provide a wide selection of materials extending from basic chemicals to high-performance chemicals. Chemicals Operations conducts businesses with focus on G Global market ranking* “chlor-alkali & urethane” and “ﬂ uorochemicals & specialty Fluoropolymers (ETFE) chemicals,” and it enjoys a leading global share in ﬂ uoropolymers (ETFE) for highly functional ﬂ uoropolymer ﬁ lms and other essential applications. Other operations include ceramics, logistics and engineering businesses. No.1 AGC No.2 *AGC estimates CYTOP™ transparent ﬂ uoropolymers for pellicle Akashi Bridge treated with highly weather-resistant Asahi Guard™ ﬂ uorinated water and oil repellents coating in semiconductor applications Lumiﬂ on™ ﬂ uoropolymer coating for coating Flemion™ ion-exchange membranes AFLAS™ ﬂ uoroelastomers Ceramics sputtering target 26 AGC Report 2009 Chemicals Operations and Other Operations Fulﬁ lling the latest needs through chemical technologies: extensive operations in ceramics, logistics and engineering ■ Chemicals Operations The AGC Group’s Chemicals Operation was originally established to internally supply soda ash needed to manufacture ﬂ at glass. During the intervening years, the Group has utilized chlorine, a byproduct of the caustic soda production process, to develop numerous value-added products, including ﬂ uorinated products, which in turn has propelled the expansion of our business domains. The AGC Group carries out integrated manufacturing of products, ranging from basic chemicals to high-performance chemicals. From raw materials to end products, throughout the entire manufacturing process, the Group makes efforts to produce products in an environmentally-friendly manner. The AGC Group provides a broad range of products, from basic chemicals such as caustic soda to high-performance chemicals such as ﬂ uoropolymer ﬁ lms. The “chlor-alkali & urethane business” offers such chlor-alkali products as caustic soda and vinyl chloride monomer, as well as urethane-related products centering on polyols. Meanwhile, the “ﬂ uorochemicals & specialty chemicals business” offers ﬂ uorochemicals, mainly ﬂ uoropolymers, ﬂ uoropolymer ﬁ lms, ﬂ uorinated water and oil repellents, gases and solvents, as well as such specialty products as battery materials, liquid crystal materials and ﬁ ne silica. ■ Other Operations The Other Operations are composed of the ceramics business and a host of service-related businesses that include logistics and engineering. C Crude salt is the raw material of basic chemicals, which in turn b leads to the development of performance chemicals F-Clean™, a high-performance F ﬂ uoropolymer ﬁ lm with ﬂ additional functions for greenhouse coverings Roiceram™-C ﬁ ne ceramics R (silicon carbide) ( TOPICS Developing Fluon® PTFE E-SERIES without using PFOA as polymerization surfactant Polytetraﬂ uoroethylene (PTFE) products are used in various applications, including coating cooking pans as well as electric wires used for precision electronic devices. Traditionally, perﬂ uorooctanoic acid (PFOA) has been widely used worldwide as a polymerization surfactant for PTFE products, due to its high chemical stability and cost effectiveness. However, there have been concerns expressed about the persistence in the environment of some ﬂ uorochemicals, including PFOA. Therefore, in 2006, the US Environmental Protection Agency (USEPA) initiated a program to reduce PFOA contents in products by 95% by 2010 and to zero by 2015. Since then, the Agency has been asking manufacturers of ﬂ uorinated chemicals around the world to participate in the program. In response, AGC Chemicals Company embarked on the development of a surfactant that did not contain PFOA*, capitalizing on its proprietary ﬂ uorination technology. As a result, in September 2008, we released the Fluon® PTFE E-SERIES as a PFOA-free, environmentally friendly ﬂ uorinated resin. Within 2010, we will make all our PTFE products PFOA-free. * At or above the detection limit Products using Fluon® PTFE AGC Report 2009 27 AGC Group’s CSR For the AGC Group, the pursuit of its group vision represents the fulﬁ llment of its CSR. We regard it our mission to to make the world a brighter place. In accomplishing this mission, all employees of the AGC Group are encouraged to take action based on the Group’s shared values of “Innovation & Operational Excellence,” “Diversity,” “Environment,” and “Integrity.” We would thereby like to achieve sustainable growth as a socially trusted corporate group. As a declaration of our commitment to achieving this target, we have formulated the AGC Group Charter of Corporate Behavior, as shown below. AGC Group Charter of Corporate Behavior (Established on June 1, 2007) AGC Group Charter of Corporate Behavior The AGC Group strives to be a company trusted by all its stakeholders, a company that meets the expectations of the world business community to grow and develop responsibly, and a company that signiﬁcantly contributes to a healthier global society. We in the AGC Group will achieve these goals by practicing the following principles that are based on our shared values of . ■ Integrity: Sincere Behavior 1. The AGC Group will develop and provide useful goods and services of superior quality, while giving due consideration to safety and the environment, and will strive for customer satisfaction and loyalty. 2. The AGC Group will understand and comply with applicable laws and regulations in the countries in which it does business. 3. The AGC Group will promote fair trade and conduct its operations in accordance with the principle of fair competition and all applicable laws and regulations. The Group will support the development of appropriate competition laws. 4. The AGC Group will maintain sound relationships with government agencies and other responsible organizations. The Group will not support organizations that threaten the order and security of society. 5. The AGC Group will properly manage and safeguard its own proprietary information, intellectual property, and other assets and will respect the property rights and interests of its customers and other business partners. ■ Environment and Safety: With Due Consideration 6. The AGC Group regards environmental conservation as an essential responsibility of global citizens and will proactively contribute to the development of a sustainable society. 7. The AGC Group will seek to implement technological innovations and new product developments that reﬂect due consideration for the environment and will participate in ongoing activities to preserve the environment and safety and security at work. 8. The AGC Group will maintain its workplaces with a proper regard to occupational health and safety for the people related to the business activities of the Group. ■ Diversity: Respect for People 9. The AGC Group will respect cultural diversity in race, ethnicity, religion, language, gender, and background. 10. The AGC Group will respect people’s diverse capabilities and personal dignity in the Group’s business activities and will create fair and open environments at its workplaces without discrimination. 11. The AGC Group will not engage in forced labor or child labor and will not tolerate infringements of human rights. ■ Harmony with Society: From “Responsibility” to “Reliability” 12. The AGC Group will strive to be a trusted corporate citizen, fulﬁlling its responsibilities to the communities in which it does business. 13. The AGC Group will build productive and proper relationships with business partners and encourage them to adhere to business principles consistent with its own. 14. The AGC Group will communicate responsibly with customers, local citizens, shareholders, and other members of society by disclosing information in a fair and appropriate manner. The management of all AGC Group companies, recognizing that it is their responsibility to realize the spirit of this Charter, will take the initiative to achieve an understanding of the Charter within all Group companies and the companies with which they do business. We will pay attention to the voices of our stakeholders, both internal and external, and promote the development and implementation of systems that will enhance ethical corporate behavior under the vision . In the case of any behavior contrary to the principles of this Charter, we will work to identify the cause and prevent a recurrence, making it clear to those inside and outside Group companies that the situation is being addressed diligently. We will take appropriate corrective and disciplinary actions when necessary. 28 AGC Report 2009 CSR Activities based on “AGC Group Charter of Corporate Behavior” n Integrity: Sincere Behavior Compliance The AGC Group is committed to increasing the fairness and transparency of its business operations, regarding strict compliance as the basis for Our Shared Value, Integrity, and as a premise for its sustainability as a corporate citizen. Quality and Customer Satisfaction (CS) The AGC Group is committed to improving quality in every aspect of its business operations by implementing process reform to improve the quality of its products and services in order to increase customer satisfaction and by changing employee’s ways of thinking based on the idea of incorporating the concept of CS into each employee’s daily work processes. n Environment and Safety: With Due Consideration Environmental Activities The AGC Group, being fully aware of the high environmental impact of its operations, regards the environment as one of its most important management priorities, and all Group companies are committed to contributing to developing a sustainable society. Occupational Health & Safety Based on the management’s principle that “no production should be operated without assurance of safety,” the AGC Group is ensuring occupational health and safety at its production sites by applying its Occupational Health & Safety Management System (OHSMS) and securing the equipment’s safety. Industrial Safety & Security The AGC Group has been implementing measures to minimize the damage caused by accidents. Specifically, we are trying to prevent contingencies (accidents and natural disasters) and to promptly and appropriately take action in the case of actual occurrence. n Diversity: Respect for People Employee Satisfaction (ES): Employee Job Satisfaction and Pride in Accomplishment The AGC Group relies on the capabilities of its employees as a basis of increasing its corporate value and improves its work environment to enable all the employees to work with satisfaction and pride in their daily operations and to share mutual respect based on the value of diversity. n Harmony with Society: From “Responsibility” to “Reliability” Community Relations The AGC Group is engaged in a variety of community relations, including support of academic and research activities and education as well as community activities in Japan and overseas with the aim of contributing to further enhancing a healthier society as a responsible corporate citizen. Communication The AGC Group actively and appropriately discloses its corporate information in a timely manner so as to maintain sufficient communication with its stakeholders. Such frequent communication helps us incorporate their opinions and requests into our CSR- related activities and achieve their understanding and support of our activities. For more details, see AGC Group CSR Report 2009 Asahi Glass CSR Website http://www.agc.co.jp/english/csr/ AGC Report 2009 29 Corporate Governance, Internal Control and Risk Management ■ Corporate Governance As its basic policy on corporate governance, Asahi Glass clearly separates the functions of “oversight” and “execution” of management, aiming to reinforce the management oversight function while ensuring quick decision making in management execution. Under this basic policy, we have implemented various measures to improve our corporate governance system, including the appointment of outside directors, the adoption of an executive ofﬁ cer system, and the establishment of a non-statutory Nominating Committee and a Compensation Committee. As part of our efforts regarding corporate governance, we have decided to revise the directors’ compensation system in view of discussions by the Compensation Committee and the Board of Directors in March 2007. We abolished the retirement beneﬁ t program for directors and introduced stock compensation- type stock options to share the beneﬁ ts and risks related to stock price ﬂ uctuations with shareholders. Furthermore, regarding top management, we decided to establish the positions of “Chairman & CEO” and “President & COO” in 2008, together with reinforcing the Group’s strategic planning capabilities and enhancing efﬁ ciency and acceleration of all aspects of business execution. By implementing these measures, we continue to enhance our corporate governance. General meeting of shareholders Board of Directors: 7 directors (including 3 outside directors) Nominating Committee: 5 directors (including 3 outside directors) t n e m e g a n a M t h g i s r e v o n o i t u c e x e s s e n i s u B l a u t u M n o i t a r e p o o c Corporate Auditors: 4 auditors (including 3 outside corporate auditors) Independent Accountants Chairman & CEO President & COO CFO (Senior Executive Vice President) CTO (Senior Executive Officer) Executive Officers Management Committee CSR Committee Internal Audit Office Group Corporate Compensation Committee: 5 directors (including 3 outside directors) Compliance Committee Fair Trade Committee Information Management Council Export Compliance Control Directorate Corporate Environment & Safety Directorate p u o r G e t a r o p r o c n o i t c n u f s s e n i s u B s n o i t a r e p o n o i t c n u f In-House Companies/Strategic Business Units (SBUs)*1 *1 In-House Companies are business units that operate globally, generally with net sales of over 200 billion yen. Business units with smaller scales are categorized as Strategic Business Units (SBUs). ■ CSR Promotion System The AGC Group established its CSR Committee in 2005. This Committee, which serves as an in-house organization to fulﬁ ll CSR by the Group, is chaired by the President & COO and composed of the CFO, CTO, and the heads of the In-House Companies and SBUs. It discusses the Group’s CSR-related policies and issues. Moreover, we hold monthly meetings of the staff members actually engaged in CSR at each organization, where attendees discuss the measures needed to solve speciﬁ c issues. ■ Internal Control Asahi Glass decided on its basic policy over internal control at the Board of Directors meeting held in May 2006. Subsequently, we partially revised the policy reﬂ ecting the changes of our situation, including the establishment of the AGC Group Code of Conduct in October 2008. The items for basic policy for internal control (1) Compliance program (2) Information retention and management system (3) Risk management system (4) System to ensure efﬁ cient and effective business execution (5) System for management of group companies (6) Matters regarding auditors ■ Internal Control over Financial Reporting As for internal control over ﬁ nancial reporting, we have built up a mechanism to establish, operate, and assess internal controls pursuant to the Financial Instruments and Exchange Law, promulgated in June 2006. Using this mechanism, we started the full implementation of internal control over ﬁ nancial reporting in ﬁ scal 2009. ■ Risk Management Based on its basic corporate policy over internal control, the AGC Group makes it a rule to identify important risk factors and report and examine the state of risk management periodically at the meetings of the Management Committee and the Board of Directors. In identifying important risk factors, we conduct questionnaire surveys across the Group to create a risk map that indicates the impact and frequency of possible risks, which we use to evaluate the signiﬁ cance of the risk factors. Then the Management Committee and the Board of Directors discuss the factors at their meetings, and the related In-House Companies and SBUs formulate the action plans to implement the Plan, Do, Check, and Act (PDCA) cycle for the continuous improvement of their risk management levels. Formulation of a business continuity plan (BCP) Regarding important risk factors, we are implementing measures to formulate and operate business continuity plans (BCPs) for large-scale accidents and disasters. Speciﬁ cally, we are taking countermeasures against earthquakes in Japan (see Topic below) and new type of pandemic inﬂ uenza*2. *2 The new type of pandemic inﬂ uenza is a disease caused by ﬂ u viruses from animals, in particular from birds. The viruses do not usually infect humans, but some viruses mutate so that they can infect humans, grow in humans, and be efﬁ ciently passed from human to human. 30 AGC Report 2009 Board of Directors, Corporate Auditors and Executive Ofﬁ cers ■ Board of Directors Masahiro Kadomatsu Representative Director Chairman of the Board Chairman & CEO Kazuhiko Ishimura Representative Director President & COO Takashi Matsuzawa Representative Director Senior Executive Vice President & CFO Katsuhisa Kato Director Senior Executive Ofﬁ cer & CTO Kunihiro Matsuo Director (Outside) Attorney At Law, Kunihiro Matsuo Law Ofﬁ ce Hajime Sawabe Director (Outside) Representative Director Chairman, TDK Corporation ■ Executive Ofﬁ cers Masahiro Kadomatsu Chairman & CEO Shukichi Umemoto GM of Finance & Control Ofﬁ ce Yasutoshi Hirata GM of Human Resources & Administration Ofﬁ ce ■ Executive Ofﬁ cers Tetsuji Kakimoto Technical Director of Japan/Asia Paciﬁ c, Glass Company Masafumi Ohinata GM of Electronics General Div., Electronics Company Yasumasa Nakao Leader of Global Technology Promotion & Integration Project Marehisa Ishiko Regional President of Japan/Asia Paciﬁ c, Glass Company Yoshiaki Tamura GM of Display General Div., Electronics Company Jean-François Heris Regional President of Europe, Glass Company, and President & CEO of AGC Flat Glass Europe S.A. Toru Nagashima Director (Outside) Chairman of the Board, Teijin Limited ■ Corporate Auditors Takashi Terashima Izumi Tamai (Outside) Kozo Tsukagoshi (Outside) Koji Ogaki (Outside) Masayuki Kamiya Vice President, Planning and Coordination, Glass Company Shinichi Kawakami Deputy GM of Human Resources & Administration Ofﬁ ce Eiichi Kudo GM of CSR Ofﬁ ce Takashi Fujino GM of Corporate Planning Toru Kawatsura Assistant to President of Glass Company Nozomu Taguchi GM of Electronic Glass General Div., Electronics Company Takuya Shimamura GM of Planning & Coordination Ofﬁ ce, Chemicals Company Tetsuo Tatsuno Deputy GM of Finance & Control Ofﬁ ce Satoshi Kamata GM of Business Management General Div., Chemicals Company Tadayuki Oi Vice President, Technology, Glass Company (Abbreviation) “GM”: General Manager On July 21, 2009 AGC Report 2009 31 Kazuhiko Ishimura President & COO ■ Senior Executive Vice Presidents Takashi Wada President of Glass Company Takashi Matsuzawa CFO Yuji Nishimi President of Electronics Company ■ Executive Vice President Akio Endo Deputy President of Glass Company ■ Senior Executive Ofﬁ cers Michiyoshi Kaino President of Chemicals Company Kei Yonamoto Vice President, Automotive, Glass Company Katsuhisa Kato CTO Akira Toyama GM of Research Center AGC Milestones 1907–2009 1907 ■ Asahi Glass Company founded in Amagasaki, Hyogo Pref. 1954 1950 ■ Asahi Glass Company incorporated. 1925 ■ Shoko Glass Co., Ltd. established in China. ■ Asahi Special Glass Co. established to manufacture glass bulbs for TV CRTs. 1956 ■ Asahi Processed Glass Co. established and manufacture of automotive glass begins. ■ The Indo-Asahi Glass Co., Ltd. established in India. 1907-1949 The Early Years 1950-2001 Era of Growth and Expansion 1954 ■ Production of double-glazing units begins. 1938 ■ Production of tempered glass and laminated glass begins. 1933 ■ Caustic soda production using lime process begins. 1928 ■ Production of ordinary sheet glass using Fourcault process begins. 1917 ■ Japan’s ﬁrst soda ash produced using ammonium method. 1909 ■ Production of Belgian-type hand-blown sheet glass, the ﬁrst sheet glass successfully manufactured in Japan, begins. 32 AGC Report 2009 1966 ■ Production of ﬂoat glass begins. 1961 ■ Asahi Glass moves into organic chemicals, manufacturing propylene oxide and propylene glycol. 2002 ■ Glaverbel made into a wholly owned subsidiary. ■ AGC Group Vision formulated. Global In-House Company System introduced. 2004 ■ management policy introduced. 2005 ■ Electronics & Energy General Division newly established. 1981 ■ Asahi Glass acquires Glaverbel S.A. glass company in Belgium. 1991 ■ Asahi Glass Foundation creates the “Blue Planet Prize” to honor those who help solve environmental problems. 1992 ■ AFG Industries, Inc. of the U.S.A acquired. 2007 ■ Group brand uniﬁed as “AGC.” ■ Asahi Glass Company’s 100th anniversary 2008 ■ New management policy introduced. ■ New medium-term management plan started. (Renamed from in 2009) 2009 ■ Glass Company newly established. (on July 21, 2009) ■ Electronics Company newly established. (on July 21, 2009) 2002- Toward Global Management Scheme 1998 ■ Mass production of a new alkali-free glass for TFT LCDs commenced. 2006 ■ Fluon® highly functional ETFE ﬂuoropolymer ﬁlm selected for the main stadium and the venue for aquatics events at the Summer Games in Beijing. 1990 ■ “CYTOP™” transparent ﬂuoropolymer developed. 1996 ■ Production of “PD200” glass substrate for plasma display panels (PDPs) begins. 1985 ■ Production of alkali-free glass and synthetic quartz glass begins. 1980 ■ AZEC System of caustic soda manufacturing using ion-exchange membrane developed. 1975 ■ Production of “Asahi Guard™” ﬂuorinated water and oil repellents and “Aﬂon COP” ﬂuorinated resins begins. ■ Ion-exchange membrane method for manufacturing caustic soda developed. 2004 ■ Fluon® highly functional ETFE ﬂuoropolymer ﬁlm utilized at the Munich stadium, the venue for the opening match of the football (soccer) world competition in Germany. AGC Report 2009 33 A G C R e p o r t 2 0 0 9 ❹ ❷ ❸ ❺ ❶ ❻ About the photographs on the cover: ❶：Naberezhnaya Tower (Russia) ❷：Optical planar devices ❸：Fluon ® ETFE FILM ❹：Automotive glass ❺：TFT LCD glass substrates ❻：Avignon Station (France) ©AGC Flat Glass Europe AGC Report 2009 ASAHI GLASS CO., LTD. URL: http://www.agc-group.com Issued June 2009 *Soy ink is used for this Report Part of this report (from p. 1 to p. 32) is printed using “Morino Chonai-Kai Forest Thinning Support Paper,” realized by a partnership NPO supporting used paper recycling, and Iwaizumi city (Iwate pref., Japan), which is promoting forest restoration.

Continue reading text version or see original annual report in PDF format above